Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies

Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies

Order of the China Securities Regulatory Commission
(No. 224)

The Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies, as deliberated and adopted at the 1st executive meeting of the China Securities Regulatory Commission in 2024 on May 23, 2024, are hereby issued, and shall come into force on the date of issuance.

Wu Qing, Chairman of the China Securities Regulatory Commission
May 24, 2024

Annex 1: Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies
Annex 2: Explanation on the Legislation of the Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies

Interim Measures for the Administration of Shareholding Reduction by Shareholders of Listed Companies
(Deliberated and adopted at the 1st executive meeting of the China Securities Regulatory Commission on May 23, 2024)

Article 1 These Measures are developed in accordance with the Company Law of the People's Republic of China (“Company Law”), the Securities Law of the People's Republic of China (“Securities Law”), and other applicable laws and administrative regulations for the purposes of regulating shareholding reduction by the shareholders of listed companies, protecting the lawful rights and interests of investors, maintaining the order of the securities market, and promoting the long-term stable and sound development of the securities market.
Article 2 These Measures shall apply to shareholding reduction by shareholders holding 5% or more of the shares of a listed company or the actual controller (hereinafter collectively referred to as “principal shareholders”), directors, supervisors, or senior executives of the listed company and the reduction of pre-IPO shares by other shareholders of the listed company.
A principal shareholder's reduction of shares held in a listed company that were purchased through call auction trading on a stock exchange shall only be governed by the provisions of Articles 4 through 8, Article 18, and Articles 28 through 30 of these Measures.
A principal shareholder's reduction of shares held in a listed company obtained through participation in an IPO or a listed company's public offering of shares to unspecific or specific parties shall only be governed by the provisions of Articles 4 through 8, Articles 10, 11, 18, and Articles 28 through 30 of these Measures.
Article 3 A shareholder of a listed company may reduce shareholding by selling securities through a stock exchange, by agreement-based transfer, and in other methods permitted by laws and administrative regulations.
Article 4 The shareholders of a listed company shall comply with the restrictive provisions on share transfer specified in the Company Law, the Securities Law, and other relevant laws and administrative regulations, rules and regulatory documents of the China Securities Regulatory Commission (CSRC), and rules of the stock exchange.
The shareholders of a listed company shall strictly comply with the undertakings they make on the restricted transfer of their shares.
Article 5 A shareholder of a listed company that reduces shareholding shall fulfill the information disclosure obligation in accordance with laws, administrative regulations, these Measures, and rules of the stock exchange, to ensure that the information disclosed is truthful, accurate, and complete.
Article 6 The reduction of shareholdings by principal shareholders shall be standardized, rational, and orderly, with full consideration of the interests of the listed company and minority shareholders.
A listed company shall promptly obtain the information on its shareholders' reduction of shares held in the company and take the initiative to give reminders on the rules. The secretary of the board of directors of a listed company shall check principal shareholders' reduction of shares held in the company on a quarterly basis. Any violation of law or regulation discovered shall be promptly reported to the CSRC and the stock exchange.
Article 7 A principal shareholder shall not reduce shares held in the company under any of the following circumstances:
(1) The shareholder is under investigation by the CSRC or criminal investigation by a judicial authority for being suspected of any illegal act or crime involving securities and futures relating to the listed company, or it has been less than six months after the imposition of an administrative penalty or a criminal sentence.
(2) It has been less than three months after a stock exchange issued a public censure of the shareholder for the involvement in any violation of law or regulation related to the listed company.
(3) If the shareholder has received an administrative penalty from the CSRC due to any violation of law involving securities and futures and has not paid the fine or confiscated amount in full, except as otherwise prescribed by any law or administrative regulation, or the funds from the reduction of shareholding are used to pay the fine or confiscated amount.
(4) Other circumstances prescribed by the CSRC.
Article 8 The controlling shareholder or actual controller of a listed company shall not reduce the shares held in the company under any of the following circumstances:
(1) The listed company is under investigation by the CSRC or criminal investigation by a judicial authority due to the suspicion of involvement in any illegal act or crime involving securities and futures, or it has been less than six months after the imposition of an administrative penalty or a criminal sentence.
(2) It has been less than three months after a stock exchange issued a public censure of the listed company.
(3) The listed company may trigger compulsory d......