Concrete Rules Guiding Non-public Offerings by Listed Companies

By Christophe Han and Baker Chen

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Since the implementation of the Measures for the Administration of the Issuance of Securities by Listed Companies (Issuance Measures) on May 8 2006, non-public offerings have become a popular refinancing method for Chinese listed companies. Moreover, under China¡¦s new M&A regulations, particularly the Measures for the Administration of the Takeover of Listed Companies, implemented on September 1 2006, and The Measures for Strategic Investment in Listed Companies by Foreign Investors, implemented on January 31 2006, non-public offering has proven to be an effective weapon during the course of foreign strategic investment into Chinese listed companies and major asset restructuring of Chinese listed companies. More concrete and operational rules regarding non-public offerings are expected to be formulated by the China Securities Regulatory Commission (CSRC). After a long period of consideration, the CSRC issued the Detailed Implementation Rules for the Non-public Issuance of Stocks by Listed Companies (Detailed Rules) on September 17 2007.