New Share Offerings by Publicly-listed Companies ("Measure")
The Notice and Measure (together called "the Regulation") provide comprehensive and detailed guidance for publicly listed companies intending to offer new shares. This includes filing and approval procedures, issues to be examined, information to be disclosed, civil liability etc. The two major equity financing methods used by publicly listed companies (rights issue and secondary offering) will now be governed by the same regulation. Under this new regulation, it is required that the securities companies, in their role as underwriters, shall recommend the companies to the CSRC, giving special regard and comment to the specified issues in the company's due diligence reports. As can be reasonably expected, the due diligence obligations imposed on securities companies will be enhanced.
Also, in fine-tuning some of the requirements for securities offerings, the Regulation has eliminated some that were previously contained in the Tentative Procedures for Public Share Offerings by Publicly listed Companies, and has added others. For example, although the Regulation has relaxed the performance requirements for listed companies in the case of rights issues, other performance requirements have been added with respect to secondary offerings.
The enacting of force of this new share offering regulation reflected healthy development of China securities market in a market-oriented manner.