China Securities Regulatory Commission, Several Provisions on the Reduction by the Shareholders, Directors, Supervisors and Senior Management Personnel of Listed Companies of Their Shareholdings
中国证券监督管理委员会上市公司股东、董监高减持股份的若干规定
September 16, 2017 | BY
Susan Mok &clp articles &Major shareholders not allowed to reduce their shareholdings through block trades.
Promulgated: May 26 2017
Effective: as of date of promulgation
Main contents: These Provisions shall apply to share reductions by shareholders who hold at least 5% of the shares and controlling shareholders (hereinafter collectively referred to as “Major Shareholders”) and the directors, supervisors and senior management personnel of listed companies, and reductions by shareholders of their holdings of those shares held by them before a company's initial public offering and of those shares of the listed company that were offered in a private offering.
These Provisions shall not apply to reductions by Major Shareholders of their holdings of the shares of a listed company acquired through centralized trading at competing prices on a stock exchange (Article 2).
The shareholders, directors, supervisors and senior management personnel of a listed company may reduce their holdings of shares by sale on a stock exchange or, alternatively, by means of negotiated transfer or other means permitted by laws and regulations.
A reduction of a shareholding by means of judicial enforcement, performance of an equity pledge agreement, gift, conversion of exchangeable bonds into shares, exchange of interests in stocks, etc. shall be handled in accordance herewith (Article 4).
The total number of shares by which a Major Shareholder of a listed company can reduce its shareholding by means of centralized trading at competing prices on a stock exchange during a three month period may not exceed 1% of the total shares of the company.
The reduction by a shareholder of its holding of those shares held by it before the company's initial public offering or of those shares of the listed company that were offered in a private offering by means of centralized trading at competing prices on a stock exchange shall comply with the percentage restriction specified in the preceding paragraph.
If a shareholder holds shares of the listed company that were offered in a private offering and reduces its holding of the same by means of centralized trading at competing prices on a stock exchange within the 12 months after the expiration of the lockup period, the same shall additionally comply with the percentage restrictions specified by the stock exchange.
When the provisions of any of the preceding paragraphs is applied, the shares held by the listed company's Major Shareholder and the parties acting in concert therewith shall be counted together (Article 9).
If a major shareholder of a listed company reduces its shareholding by means of a block trade, or, through such a block trade, it reduces its holding of those shares that it held before the company's initial public offering or of shares of the listed company that were offered in a private offering, the transferor and transferee of the shares shall comply with the provisions of the stock exchange on the number of shares that may be involved in a shareholding reduction, the length of time the shares are held, etc (Article 11).
Related legislation: PRC Securities Law (Revised in 2014) and PRC Company Law (2013 Revision)
Repealed legislation: Several Provisions on the Reduction of Their Shareholdings by the Major Shareholders, Directors, Supervisors and Senior Management Personnel of Listed Companies, 2016
clp reference:3710/17.05.26 promulgated:2017-05-26 effective:2017-05-26This premium content is reserved for
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