Legislation roundup: Securities Law, Lingang dispute resolution and electronic evidence

When an issuer is to make an initial public offering of shares, the amended Law now requires:

• the issuer to have the capacity as a going concern instead of having the capacity for sustained profitability;
• the issuer to have unqualified audit reports issued for the financial accounting reports of the last three years instead of not having fraudulent entries in its financial accounting documents for the most recent three years or committed another major violation of the law; and
• the issuer, its controlling shareholder and de facto controller not having committed the crime of embezzlement, bribery, appropriation of property, diversion of property or undermining the order of the socialist market economy during the last three years.

Further reading

The Outlook for the Mainland and Hong Kong Capital Markets in 2019

Third Draft of the Amendment to Securities Law: Delisting Made Easier?

Dispute Resolution

Supreme People's Court, Opinions on the Provision of Judicial Services and Assurance by People's Courts for the Development of the Lingang New Area in the China (Shanghai) Pilot Free Trade Zone

最高人民法院关于人民法院为中国（上海）自由贸易试验区临港新片区建设提供司法服务和保障的意见

The Opinions put forward the exploration in the Lingang New Area the service by persons from Hong Kong, Macao and Taiwan as people's assessors and their exercising of mediation functions; exploration in permitting foreign parties to use English when participating in litigation activities; accurate application of PRC and foreign laws, international treaties and international practice, and respect of internationally accepted trade rules. The Opinions also encourage the appointment of expert members to participate in diverse mechanisms for the resolution of international commercial disputes and suggest to fully exploit the use of experts in the process of ascertaining extraterritorial laws

Further reading

State Council, General Plan for the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone

China Expands Shanghai FTZ to Attract More Hi-Tech Firms

Supreme People's Court, Several Provisions on Evidence in Civil Procedures

最高人民法院关于民事诉讼证据的若干规定

Where a party presents audio-visual materials as evidence, such party shall provide the original medium on which such materials are stored.

Where a party presents electronic data as evidence, the original thereof shall be provided.  A copy conforming with the original produced by the producer of the electronic data, or a printout or other displayable and identifiable output medium directly sourced from the electronic data shall be deemed an original of the electronic data.

Further reading

PRC Civil Procedure Law (2nd Revision)

China defines rules for e-evidence in criminal cases