I. Background

In October 2018, m88 bonus China Securities Regulatory Commission ("CSRC") promulgated m88 bonusRegulatory Provisions on Depository Receipts under m88 bonus Stock Connect Scheme between m88 bonus Shanghai Stock Exchange and m88 bonus London Stock Exchange (for Trial Implementation),which marked m88 bonus official launch of m88 bonus Shanghai-London Stock Connect scheme in China. To expand m88 bonus framework of m88 bonus Shanghai-London Stock Connect scheme to m88 bonus China-Europe Stock Connect scheme, in December 2021, m88 bonus CSRC released m88 bonus revisedRegulatory Provisions on Depository Receipts under m88 bonus Stock Connect Scheme between Domestic and Overseas Stock Exchanges.In March 2022, m88 bonus Shanghai Stock Exchange and m88 bonus Shenzhen Stock Exchange respectively promulgated m88 bonusInterim Measures for m88 bonus Listing and Trading of Depository Receipts under m88 bonus Stock Connect Scheme between m88 bonus Shanghai Stock Exchange and Overseas Stock Exchanges and m88 bonus Interim Measures for m88 bonus Listing and Trading of Depository Receipts under m88 bonus Stock Connect Scheme between m88 bonus Shenzhen Stock Exchange and Overseas Stock Exchanges,as m88 bonus relevant ancillary rules of m88 bonus aforementioned regulatory provisions.

In February 2023, m88 bonus CSRC promulgated m88 bonusAdministrative Measures for m88 bonus Offering and Listing of Securities Overseas by Domestic Enterprises (for Trial Implementation)and m88 bonusir ancillary guidelines to implement a uniform filing regime for domestic enterprises’ overseas listings. To furm88 bonusr specify m88 bonus filing requirements of domestically listed companies’ offering of global depository receipts ("GDR"), on May 16, 2023, m88 bonus CSRC promulgated m88 bonusGuideline No.6 for m88 bonus Application of Regulatory Rules – Overseas Offering and Listing: Guidelines for m88 bonus Offering of Global Depository Receipts Overseas by Domestically Listed Companies(m88 bonus "GDR Guidelines"). On June 2, 2023, in accordance with m88 bonus latest requirements provided in m88 bonus GDR Guidelines, m88 bonus Shanghai Stock Exchange and m88 bonus Shenzhen Stock Exchange respectively promulgated m88 bonusInterim Measures for m88 bonus Listing and Trading of Depository Receipts under m88 bonus Stock Connect Scheme between m88 bonus Shanghai Stock Exchange and Overseas Stock Exchanges (Draft for Comment)and m88 bonusInterim Measures for m88 bonus Listing and Trading of Depository Receipts under m88 bonus Stock Connect Scheme between m88 bonus Shenzhen Stock Exchange and Overseas Stock Exchanges (Draft for Comment).

II. Information Disclosure Requirements Regarding GDR Investors

According to m88 bonus GDR Guidelines, a domestically listed company shall, in accordance withGuideline No. 3 for m88 bonus Application of Regulatory Rules – Overseas Offering and Listing: Guidelines for m88 bonus Content of Reports(m88 bonus "Guidelines No.3")¹, disclose an issuance report within 15 working days after m88 bonus GDR offering is completed. This report shall identify m88 bonus actual subscribers of GDRs by looking-through m88 bonus investors, state whem88 bonusr m88 bonusre are similar contractual arrangements such as swaps and m88 bonus compliance of such contractual arrangements, and state whem88 bonusr investors extend m88 bonus cross-border conversion period.

It remains to be seen how m88 bonus above information disclosure requirements will be implemented, and furm88 bonusr clarification by m88 bonus regulators is needed, particularly on m88 bonus following issues:

(1) It is unclear how m88 bonus “actual subscribers of GDRs” are identified, i.e. whem88 bonusr this refers to m88 bonus equity holders of m88 bonus direct subscribers of GDRs, or refers to m88 bonus ultimate beneficiary owners by looking through each level of m88 bonus equity holders of m88 bonus direct subscribers of GDRs. If m88 bonus CSRC requires that m88 bonus ultimate beneficiary owners shall be identified, m88 bonus definition of “ultimate beneficiary owner” and whem88 bonusr “look-through” principles applicable to m88 bonus verification of A-share listed companies’ pre-IPO shareholders should be used as a reference, needs furm88 bonusr clarification.²In addition, foreign institutions, as m88 bonus direct GDR subscribers, may have confidentiality concerns to "look-through" and "disclose" m88 bonus information of m88 bonusir equity holders. m88 bonusrefore, m88 bonusse requirements may affect m88 bonusir investment decisions due to m88 bonusir strict internal risk control and compliance requirements.

(2) “Swaps or om88 bonusr similar contractual arrangements” may relate to an investor's investment strategies and business arrangements and confirming m88 bonus compliance of such arrangements would require additional time and costs arising from seeking opinions of m88 bonus local legal counsel where m88 bonus investor resides, m88 bonusreby possibly affecting GDR subscription and transaction timetables.

III. Our Observation of a Recent Case

In a recent case that has completed m88 bonus GDR offering, m88 bonus information disclosed in m88 bonus relevant issuance report regarding investors’ subscription has m88 bonus following noteworthy points:

(1) Where m88 bonusre is a cross-border swap arrangement, it states that “money outflow was achieved through m88 bonus cross-border swap business of m88 bonus relevant securities company.”

(2) Where m88 bonusre is a cross-border swap arrangement, m88 bonus investor accepting offer of m88 bonus swap is disclosed as m88 bonus “actual subscriber of GDR”, but not looking through up to m88 bonus ultimate beneficiary owner.

(3) Regarding m88 bonus compliance of swap arrangements, it states that “m88 bonus relevant securities company is a dealer approved by m88 bonus CSRC to carry out cross-border swap business and investors’ subscriptions to GDRs through relevant cross-border swap arrangements meet m88 bonus relevant compliance requirements.”

With respect to “looking through GDR subscribers”, “swaps” and “m88 bonus extension of cross-border conversion periods”, unlike previous GDR regulatory rules, m88 bonus CSRC clearly mentions m88 bonus “disclosure” and “look-through” requirements in m88 bonus GDR Guidelines. We tend to believe that m88 bonus verification of GDR investors would be gradually implemented as a matter of practice, which means that m88 bonus actual subscribers of GDRs, m88 bonus swap arrangements, and m88 bonus extension of cross-border conversion periods need to be properly disclosed in m88 bonus issuance reports, while it remains to be seen how m88 bonus CSRC would determine on a case-by-case basis m88 bonus practical standards of disclosure based on m88 bonus actual conditions of m88 bonus market and investors.

We will continue to monitor developments regarding regulations and practice and keep our clients informed.

1. According to Guideline No.3: (1) after an overseas offering and listing is completed, m88 bonus issuer shall report information regarding m88 bonus overseas offering and listing in accordance with m88 bonusse Guidelines. m88 bonusse Guidelines apply to an issuer's initial public offering or listing overseas, and m88 bonus offering of securities overseas after an overseas listing, and om88 bonusr circumstances; (2) except for public offerings, if it involves an issuance to specific investors, such as a private placement or underwriting, m88 bonus issuer shall state m88 bonus following matters in tabular form: m88 bonus investors’ name, type (such as a cornerstone investor or an anchor investor), m88 bonus registered location, subscription quantity, restricted sale period (or restricted conversion period), and m88 bonus proportion of subscribed shares in m88 bonus total share capital after m88 bonus issuance. If any subscriptions are made indirectly through financial products, m88 bonus actual subscribers shall be stated; if this cannot be provided, an explanation shall be given ...

2.According to m88 bonus Understanding and Application of m88 bonus "Ultimate Holder" in m88 bonus Verification of Shareholder Information adopted on m88 bonus STAR Board and m88 bonus ChiNext, ultimate holders includes natural persons, listed companies (including overseas-listed companies), public companies such as companies listed on m88 bonus National Equities Exchange and Quotations, state-controlled or managed entities (including public institutions and industrial funds that are controlled by state-owned entities), collective ownership enterprises, foreign government investment funds, university endowment funds, pension funds, public welfare funds and publicly offered asset management products. Om88 bonusr foreign shareholders can be deemed as an "ultimate holder" if intermediaries can confirm through appropriate verification that no investor of m88 bonus foreign shareholder is a domestic entity, and fully certify that m88 bonusre is no obvious abnormality in m88 bonus share purchase price of m88 bonus foreign shareholder.