Raising the Bar for Securities and Shareholders

1. What have been some of the key legislative changes affecting China's capital markets in the past 12 months? 

The China Securities Regulatory Commission (CSRC) has issued and revised numerous rules and regulations, as well as regulatory documents, over the past 12 months that have impacted the capital markets. These include:

1. the revised Measures for the Administration of Material Asset Restructurings by Listed Companies, promulgated and implemented in September 2016, which redefine the criteria for what comprises a “backdoor listing” transaction, greatly increasing the difficulty of using relevant arrangements to bypass backdoor listings. They also curb market phenomenon such as “speculation in shells”, for instance, by outlining the negative conditions of “shell companies” and abolishing complementary backdoor listing financing;
2. the amended Implementing Rules for the Private Offering of Shares by Listed Companies, promulgated and implemented in February 2017, which set further restrictions on the pricing reference date for private offerings, the scale of the share capital offered, and financing intervals, aimed at preventing listed companies from taking advantage of private placements and excessive financing; and
3. the Several Provisions on the Reduction of Their Shareholdings by the Shareholders, Directors, Supervisors and Senior Management Personnel of Listed Companies, promulgated in May 2017, which place a number of restrictions on shareholding reductions by parties including the controlling shareholder, major shareholders, and pre-IPO shareholders, as well as the director, supervisor, and senior management shareholders of listed companies.

2. How does the Mainland-Hong Kong Bond Connect benefit investors, following the Shanghai- and Shenzhen-Hong Kong Stock Connects?