· Document Number：No. 27 [2016] of the Shanghai Stock Exchange

· Area of Law： Securities

· Level of Authority： Industry Regulations

· Date issued：07-01-2016

· Effective Date：07-01-2016

· Status： Effective

· Issuing Authority： Shanghai Stock Exchange

Notice of the Shanghai Stock Exchange on Issuing the Guidelines for the Explanation Meetings of Listed Companies on Reorganization and Listing to Media
No. 27 [2016] of the Shanghai Stock Exchange
All listed companies:
For the purposes of regulating the issues on listed companies' holding of explanation meetings on reorganization and listing to media and protecting investors' lawful rights and interests, the Shanghai Stock Exchange has, in accordance with relevant laws and regulations, the Stock Listing Rules of the Shanghai Stock Exchange, and other provisions, developed the Guidelines of the Shanghai Stock Exchange for the Explanation Meetings of Listed Companies on Reorganization and Listing to Media (See Annex), which are hereby issued and shall come into force on the date of issuance.
Annex: Guidelines of the Shanghai Stock Exchange for the Explanation Meetings of Listed Companies on Reorganization and Listing to Media
Shanghai Stock Exchange
July 1, 2016
Guidelines of the Shanghai Stock Exchange for the Explanation Meetings of Listed Companies on Reorganization and Listing to Media
Chapter I General Provisions
Article 1 For the purposes of regulating the issues on listed companies' holding of explanation meetings on reorganization and listing to media (hereinafter referred to as “explanation meetings to media”) and protecting investors' lawful rights and interests, these Guidelines are developed, according to the Listing Rules of the Shanghai Stock Exchange and other provisions.
Article 2 According to the relevant provisions of the China Securities Regulatory Commission (“CSRC”) on the administration of material asset restructuring, a listed company whose reorganization transaction constitutes reorganization and listing shall hold an explanation meeting to media.
Where the material asset restructuring of a company does not constitute reorganization and listing, the CSRC or the Shanghai Stock Exchange (“SSE”) may, according to the needs, require the company to hold an explanation meeting to media.
Article 3 A listed company, a reorganization and listing transaction counterparty, an intermediary institution, and other related parties and personnel shall completely and sufficiently respond to the issues of market concerns and queries at the explanation meeting to media.
At explanation meetings to media, fact descriptive language shall be used, to ensure that the language is authentic and accurate, concise, plain, and understandable; false statements or misleading statements shall not be used; and explanation meetings shall not be utilized to conduct advertising, exaggerated, and other false publicity.
Article 4 Listed companies and intermediary institutions shall, under the principles of honesty and good faith, as well as due diligence and accountability, diligently and effectively complete various work of the explanation meetings to media.
Chapter II Meeting Notice
Article 5 A listed company that suspends trading and plans reorganization and listing shall hold an explanation meeting to media after disclosing the reorganization plan. A company that directly discloses its draft shall hold an explanation meeting to media after disclosing the reorganization draft. A company that fails to hold an explanation meeting to media shall not resume trading of its stocks.
A company that does not suspend trading shall hold an explanation meeting to media in a non-trading session.
Article 6 A listed company shall, while disclosing the reorganization draft or plan (hereinafter collectively referred to as the “plan”) or within 2 trading days of the receipt of the request of holding an explanation meeting to media, announce and disclose the specific arrangements for holding an explanation meeting to media.
In principle, a company shall, within 5 trading days of the aforesaid date of announcement and disclosure, hold an explanation meeting to media.
Article 7 A listed company shall, before an explanation meeting to media, collect issues through the “SSE SNS,” an interview column on the network platform, and other channels, sort out and summarize the issues of the concern of the media and investors in a timely manner, and offer uniform replies at the explanation meeting to media.
Article 8 The following persons shall attend an explanation meeting to media:
(1) related personnel of the listed company, including the actual controller, the main directors of the listed company, independent directors, supervisors, general manager, board secretary, and chief financial officer, among others;
(2) related personnel of the underlying assets, including the actual controller, the main directors, general manager, and chief financial officer, among others;
(3) related personnel of the intermediary institution, including the chief handling persons, and signatories, among others of financial consultants, accounting firms, law firms, and evaluation institutions, among others; and
(4) individuals or heads of institutions that obtain the equity of the underlying assets 6 months before the suspension of trading or during the period of suspension of trading.
Where a company or a related party of underlying assets considers it necessary, relevant industry experts, and securities analysts, among others may be invited to attend the meeting.
Article 9 A listed company shall invite information disclosure media designated by the CSRC to attend the meeting and ensure that no less than 3 designated media are invited to attend the meeting.
Representatives of China Securities Medium and Small Investors Service Center Co., Ltd. as well as news reporters and securities analysts that hold Press Cards issued by the State Administration of Press, Publication, Radio, Film and Television according to the law may attend the meeting.
Chapter III Holding of Meetings
Article 10 Listed companies shall hold explanation meetings to media in the trading hall of the SSE or other places approved by the SSE. Participants listed in Article 8 of these Guidelines shall attend the meetings from beginning to end.
A company shall make a live broadcasting of its explanation meeting to media through the roadshow center of the SSE and other network media.
Article 11 An explanation meeting to media shall include statements by all the reorganization and listing transaction parties, raising questions on site by the media, replying to questions on site, and other respects.
Article 12 Relevant personnel of a listed company for reorganization and listing transactions shall explain relevant matters in a concise manner at an explanation meeting to media, including:
(1) The actual controller of the listed company shall explain the necessity of the reorganization and listing transaction, the pricing principle for the transaction, and the rationality of the valuation of the underlying assets.
(2) Independent directors of the listed company shall issue specific opinions on the independence of the valuation institution or the assessment agency, the rationality of the evaluation or valuation assumption prerequisite, and the fairness of pricing for transactions.
(3) The actual controller of the underlying assets shall explain the industry conditions of the underlying assets, the information on the production and operation, the future development plan, the commitment to performance, the feasibility of the performance compensation commitment, and the guarantee measures, among others.
(4) Relevant personnel of the intermediary institution shall issue specific opinions on due diligence investigation, audit, evaluation, and other work within the scope of their respective functions.
Where a listed company or a reorganization subject is subject to the administrative penalty of the CSRC or self-regulatory measures of the exchange due to violation of laws and regulations within the most recent five years, relevant personnel shall explain the information on the rectification and the impact on the transaction.
Article 13 At an explanation meeting to media, sufficient time of raising questions shall be left for media and the issues of market concerns and queries shall be sufficiently answered.
Article 14 Participants shall reply to the questions of media on site and the questions sorted out and summarized before the meeting. A listed company that is unable to reply to questions on site shall explain the reasons for its inability to reply.
Where replies are unavailable on site, the listed company shall offer replies in the announcement for the explanation meeting to media.
Article 15 Under one of the following circumstances after a listed company holds an explanation meeting to media, the SSE may request the listed company to re-hold an explanation meeting to media:
(1) There are significant doubts or complaints on the explanation meeting to media.
(2) There are major adjustments to the reorganization plan.
(3) Reorganization is terminated.
(4) Other circumstances under which the SSE deems it necessary.
Chapter IV Information Disclosure
Article 16 A listed company shall, on the next trading day after the opening of the explanation meeting to media, announce and disclose the information on the holding of the explanation meeting to media, including the questions raised by the media at the meeting, the on-site replies of the company, the reasons for failure to reply (if any), and the additional notes of the company after the meeting.
A company that is not subject to suspension of trading and is unable to disclose the aforesaid announcement on the next trading day after the opening of the explanation meeting to media shall apply for suspension of trading.
Article 17 A listed company shall hire lawyers to witness the process of the explanation meeting to media, and disclose whether the notice of the lawyers on the explanation meeting to media, the holding process, the participants, and information disclosure, among others comply with the special opinions of these Guidelines.
Article 18 A listed company whose information issued at an explanation meeting to media is not disclosed in the reorganization plan shall accordingly amend the reorganization plan and disclose it in a timely manner.
Article 19 The financial consultant, accounting firm, law firm, evaluation institution, and other intermediary institutions shall issue opinions on whether the supplementary contents disclosed in the reorganization plan are consistent with the information announced at the explanation meeting to media and disclose them.
Chapter V Supplementary Provisions
Article 20 Relevant entities that violate the provisions of these Guidelines shall be subject to the regulatory measures taken or the disciplinary sanctions given by the SSE according to the seriousness of circumstances.
Article 21 These Guidelines shall come into force on the date of issuance.