The responsible commercial sections in all the provinces, autonomous regions, municipalities, separately listed cities, and Xinjiang Production and Construction Corps, all the local Securities Regulatory Bureaus of Securities Regulatory Commission of the PRC, Shanghai Stock Exchange, Shenzhen Stock Exchange, and China Securities Depository & Clearing Corporation Limited (CSDCC):

Relevant issues concerning the administration of foreign investment in the reform of tax incentives regarding non-tradable shares are notified as follows:

1. The change procedure in shareholding concerning reform of non-tradable shares of the A-share listed company with certificates authorized by foreign invested enterprises (hereinafter referred to as foreign invested listed company)
The foreign invested listed company shall submit and put on record, to the Ministry of Commerce, the plan on reform of non-tradable shares within 2 working days after issuing the notice on the open of relevant shareholders’ meeting.
After the approval of the plan on reform of non-tradable shares by the relevant shareholders’ meeting, board of directors of the foreign invested listed company shall report and deliver the related documents to the responsible commercial sections in all the provinces, autonomous regions, municipalities, separately listed cities, and Xinjiang Production and Construction Corps (here referred to as provincial responsible commercial sections).
1) Requisition
2) Vote result of the relevant shareholders’ meeting
3) Specification of reform of non-tradable shares
4) Position paper of institution that provide recommend and guarantee
5) Position paper on law
6) When concerning state shares and the state-run corporate shares, please submit the approval document on non-tradable shares.
7) If the shares for reform has been impawned, the agreement letter of the pawnee shall be provided
8) Other document required by law or regulations

2. Nature and treatment of the enterprises after the reform of non-tradable shares of foreign invested listed company

3. Strategic investment of the foreign investor to the listed company

4. A-share listed company, including H-share and B-share, with certificates authorized by foreign invested enterprises shall hold the certificates authorized by foreign invested enterprises after the reform of non-tradable shares.

5. After the reform of non-tradable shares, foreign invested listed company shall submit alteration situation of foreign share proportion to Ministry of Commerce, according to which China Securities Depository & Clearing Corporation Limited provides related data inquiry services.

6. Foreign invested listed company with no reform of non-tradable shares at present shall deal with the alteration of shareholding under present regulation.

7. Ministry of Commerce and China Securities Regulatory Commission reserve the right to the explanation.

8. This Circular shall take effect as of the date of promulgation.

Ministry of Commerce
China Securities Regulatory Commission
October 26, 2005

(All information published in this website is authentic in Chinese. English is provided for reference only. )