China 20/20 - Legal & Regulatory Developments - November 2012

by Orrick, Herrington & Sutcliffe LLP
Contact

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.

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.

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

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.

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.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick, Herrington & Sutcliffe LLP | Attorney Advertising

Written by:

Orrick, Herrington & Sutcliffe LLP
Contact
more
less

Orrick, Herrington & Sutcliffe LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!