Shenzhen Stock Exchange, Rules on the Administration of Proceeds of Companies Listed on the Small and Medium-sized Enterprise Board (2007 Revision)

Promulgated: April 26 2007
Effective: as of date of promulgation
Interpreting Authority: Shenzhen Stock Exchange

Applicability: The term "proceeds" refers to funds raised from investors for specific purposes by companies listed on the Small and Medium-sized Enterprise Board of the Shenzhen Stock Exchange (Listed Companies) by way of offering of securities to the public (including initial public offering of shares, rights offering, subsequent offering and offering of convertible bonds) or non-public share offering (Article 3).

Main Contents: The board of directors of a Listed Company shall be responsible for establishing a sound management system for proceeds to set forth provisions for fund deposit, use, changes, supervision and accountability in relation to the designated account for proceeds (Article 4). When a circumstance that seriously affects the normal operation of the investment plans of proceeds arises, the Listed Company shall report the same to the Shenzhen Stock Exchange and make a public announcement (Article 10). Where idle funds that account for at least 10% of the amount of proceeds raised are used to make up for liquid capital, deliberation and approval of the shareholders' general meeting shall be required and online voting shall be available (Article 19).