Shenzhen Stock Exchange, Share Listing Rules for the Growth Enterprise Market

- directors, supervisors, senior management personnel, controlling shareholders and de facto controllers (Part Three);

- sponsors (Part Four);

- listing of shares and convertible corporate bonds (Part Five);

- regular reports (Part Six);

- general provisions on interim reports (Part Seven);

- resolutions of board of directors, supervisory board and general shareholders' meetings (Part Eight);

- transactions required to be disclosed (Part Nine);

- affiliated transactions (Part Ten);

- other significant events such as advance notices and updates on business performance and profit forecast, profit distribution and conversion of capital common reserve into share capital, and equity incentive schemes (Part Eleven);

- suspension and resumption of trading (Part Twelve);

- handling of risk warnings (Part Thirteen);

- suspension, resumption and termination of listing (Part Fourteen);

- application for review of the decision to reject a listing application, or to suspend or terminate listing (Part Fifteen);

- domestic and overseas listing (Part Sixteen); and

- regulatory measures and penalty for violation of regulations (Part Seventeen).

Directors, supervisors and senior management personnel of listed companies shall state in the Declaration and Undertaking of Directors (Supervisors and Senior Management Personnel) the company shares they hold directly or indirectly (Article 3.1.2). If the issuer has increased its capital and shares within six months before its submission of the application for its initial public offering of shares (IPO) to the CSRC (the benchmark date shall be the official date of acceptance of the application by the CSRC), the holder of the new shares shall, at the time of the issuer's submission of the IPO application, undertake that it will not transfer more than 50% of the new shares it holds within 24 months of the date of listing of the issuer's shares (Article 5.1.7). Where a shareholder or de facto controller that has an interest in at least 5% of the outstanding shares of a listed company trade shares through the share trading system and thereby increases or reduces the percentage of shareholding by 1% or more of the total number of shares of the company, the relevant shareholder or de facto controller and other parties with an information disclosure obligation shall appoint the company to make an announcement of the said matter within two trading days of the occurrence thereof (Article 11.8.3).

The Rules specify three circumstances leading to the delisting of a company, which are not stipulated for the Main Board, including:

(1) an accounting firm has issued an adverse opinion or disclaimer of opinion on the financial accounting report of the listed company;

(2) the accounting statements of the listed company show that its net assets are negative; and

(3) the aggregate trading volume of the shares of the company listed on the Gem has been below 1 million shares for 120 consecutive trading days (Section Three, Part Fourteen).

Related legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21; PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p.31; and Constitution of the Shenzhen Stock Exchange, Jan 1 1991, CLP 1991 No.7 p.10