In This Issue
China Finalized the Amendments to the
Rules for Establishing Foreign Invested Securities
Companies
Notice of
the Ministry of Culture on Implementing Supplementary Provisions IX
to CEPA
Draft
Measures for the Administration of Registration of Social
Insurance
CSRC Opens
Doors to Unlisted Public Companies
MOFCOM Issues Draft Implementation Rules on
Mechanical and Electrical Products International Tendering and
Bidding for Comments
China Finalized the
Amendments to the Rules for Establishing Foreign Invested Securities
Companies
On October 11, 2012, the China
Securities Regulatory Commission (“CSRC”) issued the Decision on
Amending the Rules for the Establishment of Securities Companies
with Foreign Equity Participation, which took effect immediately. As
provided in the draft version of the amendments issued on August 24,
2012, the cap on the aggregate (direct and indirect) shareholding
ratio or ratio of rights and interests of foreign investors in a
Sino-foreign equity securities company is increased from 33% to 49%.
Among the domestic shareholders of a Sino-foreign securities joint
venture, there must be a domestic securities company which holds no
less than 49% equity or rights and interests of the joint venture.
In the case of a domestic securities company converted into a
Sino-foreign securities joint venture, there must be a domestic
shareholder which holds no less than 49% shares of the joint
venture.
The full Chinese text of the amendments is available
here.
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Notice of the Ministry of
Culture on Implementing Supplementary Provisions IX to
CEPA
On September 27, 2012, the Ministry of
Culture issued the Notice on Relevant Matters Concerning the
Implementation of the Supplementary Provisions IX to the Mainland
and Hong Kong Closer Economic Partnership Arrangement (“CEPA”) and
the Supplementary Provisions IX to the CEPA between the Mainland and
Macau. Under the notice, the Ministry of Culture allows Hong Kong
and Macau service providers to (1) establish wholly owned internet
access service business sites (such as an internet cafe) in the
Mainland; (2) establish wholly owned entertainment venues on a pilot
basis in Qianhai in Shenzhen municipality and Hengqin in Zhuhai
municipality; and (3) establish performance groups on an equity
joint venture basis in the Mainland, in which the Mainland party
must retain a majority shareholding position. The above provisions
will take effect on January 1, 2013.
The full Chinese text of
the notice is available here.
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Draft Measures for the
Administration of Registration of Social
Insurance
On September 20, 2012, the Ministry of
Human Resources and Social Security issued the draft Measures for
the Administration of Registration of Social Insurance. The public
was allowed to submit comments on the draft until October 20, 2012.
The draft measures, if implemented, will supersede the Interim
Measures for Administration of Registration of Social Insurance
issued in 1999. According to the draft measures, an employer shall
apply to the social insurance agency with jurisdiction over its
registered address to carry out a social insurance registration
within 30 days of the date of its establishment. The social
insurance agency shall issue a social insurance registration
certificate within 15 days of receipt of the application materials
if they are acceptable. In case any changes occur to the
registration information, the employer shall go through an amendment
registration with the social insurance agency. A de-registration
shall be performed when the employer is involved in a dissolution,
bankruptcy, or merger etc. Under the draft measures, an employer
shall also complete the social insurance registration of its
employees.
The full Chinese text of the notice is available
here.
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CSRC Opens Doors to
Unlisted Public Companies
On September 28,
2012, CSRC issued the Administrative Measures for the Supervision of
Unlisted Public Companies. According to the measures, unlisted
public companies refers to unlisted companies limited by shares: (1)
which have over 200 shareholders as a result of issuing or
transferring shares to specific targets; or (2) whose shares are
transferred to the general public. Public transfer of shares of
unlisted public companies shall be completed in a legally
established stock exchange. The measures provide that unlisted
public companies shall apply to CSRC for approval when they publicly
transfer their shares or when they transfer their shares to
specified targets privately and this results in them having over 200
shareholders (if the number of shareholders drops to less than 200
within three months, the application is not required). In addition,
for a private transfer of shares in unlisted public companies to
specific targets, the targets should comprise: (1) corporate
shareholders; (2) corporate directors, supervisors, senior managers
and key employees; and (3) natural person investors, corporate
investors and other economic organizations that conform to the
investor appropriateness management rules. Unlisted public companies
that apply for private issue of shares to specified targets are
entitled to apply for one-time approval and issue in stages.
However, the initial issue amount shall be not less than 50% of the
total issued shares amount.
The full Chinese text of the
measures is available here.
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MOFCOM Issues Draft
Implementation Rules on Mechanical and Electrical Products
International Tendering and Bidding for
Comments
On October 10, 2012, the Ministry of
Commerce (“MOFCOM”) issued the draft Implementation Rules on
Mechanical and Electrical Products International Tendering and
Bidding for comments. The public was allowed to submit comments on
the draft until October 20, 2012. The draft rules, if implemented,
will supersede the Implementation Rules on Mechanical and Electrical
Products International Tendering and Bidding issued in 2004 (the
“2004 rules”). Under the draft rules, in situations where
international bidding would otherwise apply, if it is specified that
the place of origin of the product to be procured is within the
customs territory of China, the procurement process may be exempted
from international bidding. However, several exemptions which were
included in the 2004 rules have been removed including: (1) the
import of mechanical and electrical products within the total
investment of a foreign invested enterprise; (2) mechanical and
electrical products required for specific products or industries
determined by the State Council and products required for major
unexpected contingencies; and (3) mechanical and electrical products
enjoying a discount of more than 50% of the estimated contract value
when the manufacturer offers discounts. The draft also provides that
mechanical and electrical products with a place of origin outside
the customs territory of China offered for sale after exhibition in
China may be exempted from international bidding.
The full
Chinese text of the draft rules is available here.
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