Notice of Shanghai Stock Exchange on Amending Several Articles of Stock Listing Rules of the Shanghai Stock Exchange
· Document Number：No. 20  of the Shanghai Stock Exchange
· Area of Law： Securities
· Level of Authority： Industry Regulations
· Date issued：04-20-2018
· Effective Date：04-20-2018
· Status： Effective
· Issuing Authority： Shanghai Stock Exchange
Notice of the Shanghai Stock Exchange on Amending Several Articles of the Stock Listing Rules of the Shanghai Stock Exchange
(No. 20  of the Shanghai Stock Exchange)
All market participants:
To further regulate the governance of listed companies, the Shanghai Stock Exchange (hereinafter referred to as the “SSE”) has amended the Stock Listing Rules of the Shanghai Stock Exchange (2014 Revision) by adding relevant articles as follows:
I. One article is added as Article 3.1.6: “A listed company shall establish an audit committee under the board of directors, and the internal audit department shall be responsible to the audit committee and report the work to the audit committee. Independent directors in the audit committee shall account for more than half of the total number of directors and serve as conveners, and at least one independent director shall be accounting professionals.”
II. One article is added as Article 6.5: “An accounting firm hired by a listed company to provide accounting statement auditing, net asset verification and other relevant services shall be qualified for engaging in the relevant securities and futures business.”
The employment or dismissal of an accounting firm by a company must be subject to the decision of the shareholders' meeting, and the board of directors is not allowed to appoint any accounting firm before the shareholders' meeting makes a decision thereon.
To dismiss an accounting firm or not renew the employment thereof, a company shall notify the accounting firm in advance. When the dismissal of the accounting firm is being voted at a shareholders' meeting of the company, the accounting firm may state its opinion. If the accounting firm resigns, it shall explain to the shareholders' meeting regarding whether the company has any non-compliance.”
III. Other relevant articles are renumbered accordingly.
The amended Stock Listing Rules of the Shanghai Stock Exchange (revised in April 2018), as deliberated and adopted by the Board of Governors of the SSE and approved by the China Securities Regulatory Commission, are hereby issued, and shall come into force on the date of issuance. The full text is available for inquiry in the “Business Rules of the SSE” column under the “Rules” on the official website of the SSE (http://www.sse.com.cn). The Stock Listing Rules of the Shanghai Stock Exchange (2014 Revision) shall be repealed concurrently.
Shanghai Stock Exchange
April 20, 2018