• SSE issued a number of business and self-regulation guidelines for listed companies.
• Follows SSE April 2024 proposed 7 rules to develop the capital market.

Reduction of Shareholdings

• SSE revised Notice by the SSE and China Securities Depository and Clearing Co., Ltd. on issuing business guidelines for reduction of shareholdings by transfer to specific institutional investors via solicitation of bids and by placement by shareholders of listed companies on the STAR market, to regulate transfer of shares by major shareholders.
• Clarifies procedures for handling abnormal situations during implementation of inquiry transfer, such as discrepancies in the number of transferred shares or transfer failures.
• Includes adaptive modifications to certain provisions to enhance clarity, effectiveness.

Inquiry Transfer and Placement

• SSE issued Guidelines no. 4 of SSE for the self-regulation of listed companies on the STAR market - inquiry transfer and placement; to enhance regulations governing the reduction of shareholdings by shareholders of STAR market-listed companies.
• Key revisions include strict regulations on controlling shareholders, actual controllers for inquiry transfer, in line with existing restrictions on share reduction methods.
• Measures to prevent circumvention, such as restrictions on lending or short selling acquired shares, requirements to settle margin contracts before acquiring shares.
• Optimization of transfer process in case of abnormalities, ensuring timely disclosure and re-evaluation of transfer results; align with regulations on trading prohibitions during designated window periods for directors, supervisors, senior management.

Management Shareholding

• SSE issued Guidelines no. 15 of SSE for the self-regulation of listed companies - shareholding reduction by shareholders, directors, supervisors, and officers of listed companies; integrates previous supplementary provisions to form clearer guidelines.
• Includes strict regulation of share reduction by major shareholders and management, including identification, adherence to rules, and prohibition during certain periods.
• Enhanced disclosure standards for share reduction plans, outlining both disclosure timelines and content criteria, while addressing measures to prevent circumvention through identity manipulation, transactional schemes, and financial tools.

Effectiveness

• All of the guidelines are effective from 24 May 2024.