Notice of Shanghai on Matters concerning Voluntary Exercise of the Stock Options in Equity Incentive Plans

 2018-06-27  6


· Document Number:No. 38 [2016] of the Shanghai Stock Exchange

· Area of Law: Securities

· Level of Authority: Industry Regulations

· Date issued:08-12-2016

· Effective Date:08-12-2016

· Status: Effective

· Issuing Authority: Shanghai Stock Exchange

 

Notice of the Shanghai Stock Exchange on Matters concerning Voluntary Exercise of the Stock Options in Equity Incentive Plans
(No. 38 [2016] of the Shanghai Stock Exchange)
All listed companies:
For purposes of regulating listed companies in processing the voluntary exercise of the stock options in equity incentive plans, and improving the efficiency of the recipients of stock option incentives in exercising such stock options, the relevant matters and requirements are hereby announced by the Shanghai Stock Exchange ("SSE") as follows:
I. A listed company that intends to apply to the China Securities Depository and Clearing Corporation Limited ("CSDC") for voluntary exercise of the stock options in equity incentive plans to enable the recipients of its stock option incentives to choose the time and quantity for exercising stock options on their own via the systems of designated securities companies within the vesting period shall, in accordance with the Guidelines of the Shanghai Branch of the China Securities Depository and Clearing Corporation Limited on the Depository and Clearing of Equity Incentive Plans, provide relevant materials and properly make the following preparations:
(1) It shall engage a securities company that meets the prescribed requirements as the sponsoring broker-dealer to provide services for voluntary exercise of stock options.
(2) It shall sign service agreements on voluntary exercise of stock options jointly with the recipients of stock option incentives in its equity incentive plan and the sponsoring broker-dealer to specify the rights and obligations of all parties.
(3) It shall convene a meeting of the board of directors to deliberate the satisfaction of conditions for exercising stock options, the list of equity incentive recipients, the period for exercising stock options, the models adopted for voluntary exercise of stock options and other matters to ensure their compliance, and shall promptly disclose the resolution of the board of directors and the announcement on the exercise of stock options.
(4) Other matters required by the SSE.
II. A listed company that applies for voluntary exercise of the stock options in equity incentive plans shall, before the announcement on the implementation of voluntary exercise of stock options, complete business communications and technical preparations under the requirements of the business guidelines of the Shanghai Branch of the CSDC, and release the announcement on the implementation of voluntary exercise of the stock options in equity incentive plans at least three trading days (R-3 day) prior to the starting date of voluntary exercise of stock options (R day).
III. Where an incentive recipient of a listed company applies for exercising stock options via the system of the relevant sponsoring broker-dealer (T day) within the period for exercising the stock options in the equity incentive plan, the Shanghai Branch of the CSDC shall process liquidation, delivery and registration of new shares on the next trading day (T+1 day). The shares newly added by the exercise of stock options shall be listed for trading on the trading day immediately following the delivery day (T+2 day).
IV. During the period for exercising stock options in equity incentive plans, a listed company shall, within two trading days following the end of each quarter, disclose an announcement on the results of the exercise of stock options in the preceding quarter and the changes in its share capital structure.
V. During the period for exercising stock options in equity incentive plans, where a listed company falls within any of the circumstances of distribution of equity, allotment of shares, and deregistration of stock options, among others, which results in changes in the parameters of relevant elements for exercising stock options in equity incentive plans, the listed company shall apply to the Shanghai Branch of the CSDC for adjusting the parameters for voluntary exercise of stock options, and perform information disclosure obligations in a timely manner. The listed company shall bear corresponding consequences and liabilities on its own if there are abnormalities in the voluntary exercise of stock options due to its failure to promptly apply for adjusting parameters or for other reasons.
VI. The directors and senior executives of a listed company shall, after applying for the voluntary exercise of the stock options in the equity incentive plan granted thereto, report in a timely manner relevant information to the listed company and issue announcements via SSE's website in accordance with the requirements of the Memorandum No. 8 on the Routine Information Disclosure Work of Listed Companies—Operating Guidelines for the Management of the Shareholding by the Directors, Supervisors, Senior Executives and Shareholders of Listed Companies of the SSE.
VII. The directors and senior executives of listed companies that trade the shares obtained after applying for voluntary exercise of the stock options in equity incentive plans shall not violate the provisions on the reduction of shareholding by directors and senior executives under laws and regulations, the Stock Listing Rules of the Shanghai Stock Exchange and other normative documents.
VIII. This Notice shall come into force on the date of issuance.

Shanghai Stock Exchange
August 12, 2016