Article 1 These Regulations are hereby formulated in accordance with relevant stipulations in the Company Law of the People’s Republic of China (hereinafter referred to as the Company Law) for the purpose of standardizing the issuance and trading of foreign-oriented stocks for domestic listing by share-holding companies and safeguard the legitimate rights and interests of investors. Article 2 With approval from the Securities Committee of the State Council, share-holding companies (hereinafter referred to as the company) The foreign-oriented stocks to be issued by the company for domestic listing as referred to in the preceding clause shall include The total amount of foreign-oriented stocks for domestic listing to be issued with approval from the Securities Committee of the State Article 3 The foreign-oriented stocks to be issued by the company for domestic listing shall take the form of registered stocks, use the Renminbi The foreign-oriented stocks for domestic listing to be issued by the company to domestic investors (hereinafter referred to as domestic- Article 4 Investors in foreign-oriented stocks for domestic listing shall be limited to 1. Foreign natural persons, legal persons, and other organizations. 2. Natural persons, legal persons and other organizations in Hong Kong, Macao, and Taiwan. 3. Chinese citizens resided in foreign countries. 4. Other investors in foreign-oriented stocks for domestic listing specified by the Securities Committee of the State Council. Investors in foreign-oriented stocks for domestic listing shall produce valid documents certifying their identification and qualification Article 5 Shareholders of the same kind of foreign-oriented stocks for domestic listing shall enjoy equal rights and fulfil equal obligations The company can write into its articles of association specific stipulations on special matters concerning the exercise of rights Article 6 The company’s articles of association are binding to the company itself and its shareholders, directors, supervisors, managers, and The directors, supervisors, managers and other senior management personnel of the company shall be obliged to be loyal to and hardworking The other senior management personnel as mentioned in the two clauses preceding of this article include the financial leader of the Article 7 The Securities Committee of the State Council and its supervision and management organ-the China Securities Supervision and Management Article 8 The company set up through funding raising shall meet the following qualifications if it applies for issuance of foreign-oriented 1. Use of the funds it raises in line with State industrial policies. 2. Observance of relevant State regulations on the establishment of fixed asset investment projects. 3. Observance of relevant State regulations on the utilization of overseas capital. 4. Purchase of shares by the promoter no less than 35 per cent of the total amount of the capital stocks the company plans to issue. 5. Investment by the promoter of no less than 150 million Renminbi yuan. 6. Planned issuance to the society of stocks more than 25 per cent of the total amounts of the company’s stocks, or more than 15 per 7. Freedom from any major law-breaking behaviours in the last three years on the part of the original enterprise reorganized and transformed 8. Profitability for the past three years running on the part of the original enterprise reorganized and transformed into the company 9. Other conditions specified by the Securities Committee of the State Council. Article 9 The company that applies for issuance, through capital multiplication, of foreign-oriented stocks for domestic listing shall meet 1. Completion of sales of the stocks the company has issued last time, conformity of the use of the funds raised therefrom with that 2. Company possession of total net assets no less than 150 million Renminbi yuan in value. 3. Freedom on the part of the company from any major law-breaking behaviours during the time from the last issuance of stocks to the 4. Profitability on the part of the company for the last three years running (in case of a company reorganized from an existing enterprise 5. Other conditions specified by the Securities Committee of the State Council. The company that multiplies its capital for the first time by means of promotion shall also observe stipulations in Clause 6 of Article Article 10 Applications for the issuance of foreign-oriented stocks for domestic listing shall be handled through the following procedures: 1. Application by the promoter or the company to the people’s government of a province, autonomous region or municipality or the relevant 2. Selection by the Securities Committee of the State Council after consultation with relevant departments under the State Council 3. Submission by the chosen companies of the documents listed in articles 11 and 12 of these Regulations to the Supervision and Management 4. Report by the Supervision and Management Committee of qualified companies to the Securities Committee of the State Council for Article 11 The company set up through fund raising shall present the following documents to the Supervision and Management Committee if it applies 1. An application report. 2. The name of the promoter, the number of shares to be purchased by the promoter, the kind of investment, and certificate of capital 3. Resolutions of agreement reached at the meeting of the promoters on the open issuance of foreign-oriented stocks for domestic listing. 4. Documents issued by departments authorized by the State Council or the people’s government of a province, autonomous region or 5. Recommendations by the people’s government of a province, autonomous region or municipality or the relevant department under the 6. The Notice of Pre-verification of Enterprise post_title issued by a company registration department. 7. The draft of the articles of association of the company. 8. The prospectus. 9. Feasibility study report on the use of funds, and document of approval of the establishment of the fixed asset investment project 10. Financial statements of the original enterprise or of the State- owned enterprise who is the major promoter for the last three 11. Asset evaluation reports signed and sealed by more than two professional evaluators and the organs they work with, and documents 12. Legal opinions on relevant matters signed and sealed by more than two lawyers and their firms. 13. Plans and contracts on the underwriting of stocks. 14. Other documents required by the Supervision and Management Committee. Article 12 The company that applies for the issuance of foreign-oriented stocks for domestic listing by way of capital multiplication shall 1. An application report. 2. Resolutions of agreement reached at the meeting of the promoters on the open issuance of foreign-oriented stocks for domestic listing. 3. Documents issued by departments authorized by the State Council or the people’s government of a province, autonomous region or 4. Recommendations by the people’s government of a province, autonomous region or municipality or the relevant department under the 5. The business license of the company issued by a company registration department. 6. The articles of association of the company. 7. The prospectus. 8. Feasibility study report on the use of funds, and document of approval of the establishment of the fixed asset investment project 9. Financial statements of the company for the last three years that have been audited by chartered accountants or their accounting 10. Legal opinions on relevant matters signed and sealed by more than two lawyers and their firms. 11. Plans and contracts on the underwriting of stocks. 12. Other documents required by the Supervision and Management Committee. Article 13 The timing between the issuance by the company of foreign- oriented and domestic-oriented stocks for domestic listing can be shorter Article 14 The company shall invite registered accountants and their firm meeting State qualifications to carry out auditing or re- examination Article 15 The company shall carry out accounting and compile financial statements in line with relevant State regulations. If the financial statements released by the company to the investors in foreign-oriented stocks for domestic listing should be readjusted Article 16 The company that issues foreign-oriented stocks for domestic listing shall disclose information to the public and write into its Article 17 The information-disclosing documents of the company issuing foreign-oriented stocks for domestic listing shall be produced in the Article 18 The company that issues foreign-oriented stocks for domestic listing shall entrust a domestic securities organization set up with Article 19 The company that issues foreign-oriented stocks for domestic listing shall open a foreign exchange account with a domestic bank qualified The principal underwriter that underwrites foreign-oriented stocks for domestic listing shall transfer, with the time limit set in Article 20 Agency transactions of foreign-oriented stocks for domestic listing shall be handled by securities organizations set up with approval Article 21 Shareholders of foreign-oriented stocks for domestic listing can entrust agents to exercise their rights as shareholders. The agent Article 22 The equity holder of foreign-oriented stocks for domestic listing can register its shares in the name of a nominal holder. The equity holder of foreign-oriented stocks for domestic listing shall disclose information about changes in the ownership of its Article 23 The trading, custody, liquidation and settlement, transfer, and registration shall abide by laws, administrative decrees and relevant Article 24 With approval from the Securities Committee of the State Council, foreign-oriented stocks for domestic listing and their derivative The derivative forms as referred to in the previous clause refer to stock warrants and overseas stock deposits. Article 25 The company that issues foreign-oriented stocks for domestic listing shall use Renminbi to calculate and announce the dividends and If it is written into the company’s articles of association that other organizations shall be entrusted to exchange currencies for Article 26 The dividends and other incomes from the foreign-oriented stocks for domestic listing can be remitted abroad after payment of taxes Article 27 The Securities Committee of the State Council can work out implementing rules in line with these Regulations. Article 28 These Regulations shall take force on the date of their promulgation. The Rules of Shanghai Municipality on the Management of Special
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