China Securities Regulatory Commission, Measures for the Administration of Material Asset Restructuring of Listed Companies (Draft for Comments)

Issued: July 11 2014

Main contents: The Draft abolishes the requirement for the examination and approval of material purchases, sales and exchanges of assets of listed companies where the same do not constitute a backdoor listing. It abolishes the threshold requirements for the offering of shares to unaffiliated third parties to purchase assets and the corresponding mandatory provisions for profit forecast compensation, and encourages the parties to a transaction to conduct negotiations to execute a more flexible performance compensation agreement that is in line with their own particular characteristics. It improves the market-oriented pricing mechanism for the offering of shares to purchase assets, adding provisions that increase flexibility of the pricing of a share offering and provide for a price revision mechanism, and adds detailed requirements in respect of the disclosure of pricing reference information, such as the market comparative transaction price for the relevant assets, and the price-to-earning ratio and price-to-book ratio of companies in the industry; improves the definition of backdoor listings, specifies the implementation for backdoor listings of requirements equivalent to those for IPO reviews and specifies that backdoor listings are not permitted for companies listed on the Growth Enterprise Market.

Issued: July 11 2014