CHINA: SZSE Plans to Promulgate Memorandum for Trading Suspension and Resumption Business of Listed Companies

Monday November 2 2015

In order to further regulate trading suspension and resumption business of listed companies, maintain market efficiency and protect investors’ legal rights, such as trading right and right to know, based on regulatory practice summarization and new situations occurred in the market, Shenzhen Stock Exchange (“SZSE”) has formulated Memorandum for Trading Suspension and Resumption Business of Listed Companies and widely solicited opinions from listed companies through online business zone and symposium, etc., and will promulgate it in the near future.

The formulation of Memorandum for Trading Suspension and Resumption Business of Listed Companies is a result of full mobilization of initiatives of market participants, joint research, communication and negotiation, and also an important measure for stabilizing, repairing and constructing the stock market. During the opinions solicitation, 133 listed companies raised feedback opinions, SZSE discussed them one by one and fully accepted reasonable amendment suggestions, including arrangement for trading suspended companies during the transition period, trading suspension period of private placement shares, deliberation procedures for delayed trading resumption and investor presentation, etc.

The formulation of the Memorandum adheres to the philosophy of centering on information disclosure, strengthening responsibility and accountability and reinforcing regulation during and after the trading process, and also clearly defines the responsibilities and obligations of listed companies on protection of investors’ trading right and right to know. The Memorandum requires listed companies to do well information confidentiality and staged disclosure work whiling planning major events, so as to maintain the continuity of market transactions and prudently judge the suspension time. Considering that listed companies may have difficulties in staged and timely disclosure of planned events and need apply for trading suspension in practice, the Memorandum requires that listed companies should take effective measures to avoid long suspension period and shouldn’t abuse trading suspension to damage investors’ trading right and right to know, and stipulates corresponding suspension period and standards for common suspension matters. Meanwhile, as for violation of the Memorandum, abuse of trading suspension and unseasonable delay of resumption time, the Memorandum clearly defines that SZSE may explain related situations to the market by announcements and require the listed companies to resume stock trading.

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