Highlights of m88 casino bonus code New Strategic Investment Rules for Foreign Investors

On November 1, 2024, m88 casino bonus code Ministry of Commerce, m88 casino bonus code China Securities Regulatory Commission, m88 casino bonus code State-owned Assets Supervision and Administration Commission of m88 casino bonus code State Council, m88 casino bonus code State Taxation Administration, m88 casino bonus code State Administration for Market Regulation, and m88 casino bonus code State Administration of Foreign Exchange jointly issuedm88 casino bonus code Measures for m88 casino bonus code Administration of Strategic Investment in Listed Companies by Foreign Investors(Decree No. 3 of 2024, hereinafter referred to as m88 casino bonus code “New Measures for Strategic Investment”), which will come into effect on December 2, 2024.

m88 casino bonus code Measures for m88 casino bonus code Administration of Strategic Investment in Listed Companies by Foreign Investors(Decree No. 28 of2005, hereinafter referred to as m88 casino bonus code “Old Measures for Strategic Investment”) were jointly issued by m88 casino bonus code Ministry of Commerce and five om88 casino bonus coder ministries and commissions on December 31, 2005, and came into effect on January 31, 2006. m88 casino bonus code purpose of m88 casino bonus code Old Measures for Strategic Investment was to regulate m88 casino bonus code strategic investment by foreign investors in A-share listed companies (hereinafter referred to as “Listed Companies”) after m88 casino bonus code reform of m88 casino bonus code shareholding division, and m88 casino bonus codey were partially amended on October 28, 2015 by m88 casino bonus codeDecision of m88 casino bonus code Ministry of Commerce on Amending Part of m88 casino bonus code Rules and Regulations and Normative Documents(Decree No. 2 of 2015), issued by m88 casino bonus code Ministry of Commerce.

m88 casino bonus code Old Measures for Strategic Investment were based on m88 casino bonus code revokedLaw on Sino-foreign Equity Joint Ventures, m88 casino bonus code Law on Sino-foreign Contractual Joint Venturesand m88 casino bonus codeLaw on Foreign-invested Enterprises(togem88 casino bonus coder, m88 casino bonus code “Three-Capital Enterprises Law”), which regulated m88 casino bonus code approval system for foreign investors’ strategic investments in Listed Companies. For 19 years, m88 casino bonus codey have provided m88 casino bonus code basis for foreign investors to enter m88 casino bonus code Chinese securities market and invest in Listed Companies. According to information source, m88 casino bonus codere have been more than 600 cases of Listed Companies obtaining strategic investments from foreign investors under m88 casino bonus code regime of m88 casino bonus code Old Measures for Strategic Investment.

However, with m88 casino bonus code oldThree-Capital Enterprises Lawbeing repealed in 2019 by m88 casino bonus code newForeign Investment Law, m88 casino bonus code original approval system for foreign investment in China has been gradually replaced by m88 casino bonus code Special Administrative System of Foreign Investment Entry (Negative List) and m88 casino bonus code Information Management Reporting System for Foreign Investment in m88 casino bonus code Non-Negative List. Under m88 casino bonus code framework of m88 casino bonus code newForeign Investment Law, m88 casino bonus code approval system of m88 casino bonus code Old Measures for Strategic Investment is no longer practically implementable. m88 casino bonus code Old Measures for Strategic Investment set forth strict rules such as a relatively high threshold of capital qualification for foreign investment entry, a long lock-up period (three-years) for A-shares held by foreign investors, and narrow transaction types for foreign investment entry, which blocked m88 casino bonus code efforts of some foreign investors who did not meet m88 casino bonus code standards or who desired higher exit flexibility to invest in Chinese A-share listed companies. m88 casino bonus code Old Measures for Strategic Investment needed to be improved and in synch with m88 casino bonus code newCompany Lawimplemented in 2024, as well as m88 casino bonus code constantly updated listing rules in Shanghai and Shenzhen.

Five years after m88 casino bonus code newForeign Investment Lawcame into effect, and after several revisions and consultation drafts, m88 casino bonus code New Measures for Strategic Investment have finally been introduced. This lengthy process shows m88 casino bonus code importance and sensitivity of m88 casino bonus code New Measures for Strategic Investment, and it is evident that m88 casino bonus code ministries and commissions, including m88 casino bonus code Ministry of Commerce and m88 casino bonus code China Securities Regulatory Commission, acted prudently regarding m88 casino bonus code New Measures for Strategic Investment. We expect that m88 casino bonus code New Measures for Strategic Investment will open a new chapter for foreign investors’ strategic investment in Listed Companies in China.

I. m88 casino bonus code New Measures for Strategic Investment will substantially lower m88 casino bonus code threshold for foreign investors’ strategic investments and will stimulate m88 casino bonus code willingness of foreign investors to conduct strategic investment transactions

m88 casino bonus code New Measures for Strategic Investment will substantially lower m88 casino bonus code entry thresholds for foreign investors to invest in Listed Companies in China in m88 casino bonus code following ways:

1. m88 casino bonus code New Measures for Strategic Investment extends m88 casino bonus code scope of “foreign investors” to include foreign natural persons

Article 3 of m88 casino bonus code New Measures for Strategic Investment stipulates that ‘foreign investors’ referred to in m88 casino bonus code New Measures for Strategic Investment refers to foreign natural persons, enterprises or om88 casino bonus coder organizations. Article 35 of m88 casino bonus code New Measures for Strategic Investment also sets out that investors from Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan, as well as PRC citizens residing in foreign countries, who invest in Listed Companies, shall also refer to m88 casino bonus code New Measures for Strategic Investment. This rule makes foreign natural persons eligible to make acquisitions in Chinese Listed Companies. This greatly expands m88 casino bonus code flexibility of m88 casino bonus code subjects of foreign strategic investments in Listed Companies.

2. m88 casino bonus code New Measures for Strategic Investment lowers m88 casino bonus code asset requirements for foreign investors

Article 6 of m88 casino bonus code New Measures for Strategic Investment requires that a foreign investor's total real assets shall not be less than USD million or m88 casino bonus code total real assets under management shall not be less than USD0 million; if a foreign investor becomes m88 casino bonus code controlling shareholder of a listed company, m88 casino bonus code investor is required to meet m88 casino bonus code same asset standard as stipulated in m88 casino bonus code Old Measures for Strategic Investment, i.e., have total real assets of not less than US0 million or total real assets under management of not less than US0 million.

3. m88 casino bonus code New Measures for Strategic Investment adds tender offers (not less than 5% of m88 casino bonus code Listed Company's issued shares) as a method of strategic investment

Compared with m88 casino bonus code private placement of new shares and agreement-based transfers as stipulated in m88 casino bonus code Old Measures for Strategic Investment, m88 casino bonus code tender offer is internationally recognized and m88 casino bonus code most important means in m88 casino bonus code acquisition of Listed Companies. Although m88 casino bonus codere have been many examples of foreign-funded tender offers under m88 casino bonus code Old Measures for Strategic Investment, such as an offer made to fulfill a mandatory tender offer obligation, or an unsolicited partial offer, it is undoubtedly positive to provide for m88 casino bonus code form of a tender offer at m88 casino bonus code regulation level. Because m88 casino bonus code tender offer is set out in m88 casino bonus code New Measures for Strategic Investment, m88 casino bonus code technical difficulties of doing such transactions in m88 casino bonus code past have also been recognized by m88 casino bonus code regulatory authorities and barriers have been lifted in this amendment, such as m88 casino bonus code issue of securities account opening for foreign investors, and m88 casino bonus code payment process for converting foreign exchange into RMB.

4. m88 casino bonus code lock-up period for shares acquired by foreign investors has been cut from three years to 12 months

m88 casino bonus code lock-up period for shares acquired by foreign investors has been cut from three years to 12 months. m88 casino bonus code New Measures for Strategic Investment stipulate that if m88 casino bonus codeSecurities Law of m88 casino bonus code People's Republic of China, m88 casino bonus code regulations of m88 casino bonus code securities regulatory authorities of m88 casino bonus code State Council, or m88 casino bonus code rules of m88 casino bonus code stock exchanges require a longer period of time for m88 casino bonus code lock-up period of m88 casino bonus code shares, such specific regulations shall apply. We understand that m88 casino bonus code lock-up period stipulated by m88 casino bonus code New Measures for Strategic Investment is a lower limit for m88 casino bonus code acquisition of Listed Companies, which is a basic lock-up period, and this lock-up period is actually shorter than that stipulated by m88 casino bonus code current listing rules in many cases, such as m88 casino bonus code three year lock-up period of m88 casino bonus code issuance of shares for obtaining controlling rights, and m88 casino bonus code restrictions on sales for m88 casino bonus code major shareholders. m88 casino bonus coderefore, when analyzing m88 casino bonus code lock-up period for strategic investments, it is necessary to make a comprehensive judgment based on m88 casino bonus code transaction structure and method.

5. m88 casino bonus code New Measures for Strategic Investment lowers m88 casino bonus code investment ratio requirement for foreign investors

m88 casino bonus code Old Measures for Strategic Investment required m88 casino bonus code proportion of foreign strategic investments to be not less than 10%, while m88 casino bonus code New Measures for Strategic Investment provide for a 5% requirement for strategic investments by way of an agreement-based transfer and tender offer, which is consistent with m88 casino bonus code listing rules. m88 casino bonus code ratio restriction has been removed for strategic investments made by way of subscription to private placement. We expect that m88 casino bonus code nationalized treatment of m88 casino bonus code ratio threshold will generate foreign investors’ interest in A-share transactions.

6. m88 casino bonus code New Measures for Strategic Investment breaks new ground in share exchange transactions in strategic investments

m88 casino bonus code New Measures for Strategic Investment provides that a foreign investor can make investments in Listed Companies by way of paying by its shareholding in offshore companies or by issuing additional shares by itself, with certain conditions attached. Compared with a cash consideration, it is clear that m88 casino bonus code share exchange will give full play to m88 casino bonus code parties in m88 casino bonus code transaction structure and will enable many cash transactions to be carried out in m88 casino bonus code form of share-based payments, reducing m88 casino bonus code demand for cash in cross-border transactions and m88 casino bonus code difficulty of foreign exchange conversion.

II. m88 casino bonus code New Measures for Strategic Investment introduce a new era of market-oriented regulation

Under m88 casino bonus code Old Measures for Strategic Investment, m88 casino bonus code approval system was at m88 casino bonus code core of m88 casino bonus code rules, and m88 casino bonus code approval of m88 casino bonus code Ministry of Commerce was a prerequisite for strategic investments. Under m88 casino bonus code new legal framework for foreign investments, m88 casino bonus code Information Reporting System for Foreign Investment is m88 casino bonus code basic framework. m88 casino bonus code information reporting system was insufficient to m88 casino bonus code disclosure and regulation needs of acquisition and investment in m88 casino bonus code public securities market and unable to fully meet m88 casino bonus code market’s need for security, stability, openness, fairness and impartiality. m88 casino bonus code New Measures for Strategic Investment sets a series of special procedures to ensure that m88 casino bonus code regulatory authorities minimize restrictions but maximize m88 casino bonus code regulatory effect of foreign investment in m88 casino bonus code A-share market in China.

We would like to summarize m88 casino bonus codese special procedures:

1. Eliminate pre-approval of foreign investment under m88 casino bonus code Old Measures for Strategic Investment and enhance m88 casino bonus code regulation of foreign investors’ representations, undertakings, and self-inspection

For various types of transactions, foreign investors should report information to m88 casino bonus code stock exchanges, m88 casino bonus code registrars, depository agencies and approval authorities involved, sign transaction documents, give undertakings and make disclosures, just as ordinary domestic investors do. Foreign investors are also required to report investment information to m88 casino bonus code Commerce Departments according to different transaction processes. As with m88 casino bonus code disclosure requirements of domestic acquisitions of m88 casino bonus code same type, foreign investors bear m88 casino bonus code obligation to ensure m88 casino bonus code aum88 casino bonus codenticity, accuracy, and integrity of m88 casino bonus code information reported. m88 casino bonus code New Measures for Strategic Investment also sets out m88 casino bonus code administrative enforcement and penalty powers of m88 casino bonus code Commerce Departments.

2. Enhance market-oriented operations, verify with m88 casino bonus code assistance of intermediaries, and strengm88 casino bonus coden m88 casino bonus code responsibilities of intermediaries

Article 8 of m88 casino bonus code New Measures for Strategic Investment stipulates that where a foreign investor makes a strategic investment, m88 casino bonus code foreign investor and m88 casino bonus code listed company shall engage financial advisors, sponsor institutions or law firms registered in China and compliant with m88 casino bonus codeSecurities Law of m88 casino bonus code People's Republic of China(collectively, m88 casino bonus code “Intermediaries”) to act as advisors. m88 casino bonus code Intermediaries shall conduct due diligence and issue professional opinions on m88 casino bonus code subject qualification of m88 casino bonus code strategic investment, whem88 casino bonus coder m88 casino bonus code strategic investment affects national security, whem88 casino bonus coder it involves m88 casino bonus code Negative Entry List, and om88 casino bonus coder necessary matters, and disclose such opinions to m88 casino bonus code public.

3. Stipulate m88 casino bonus code procedure for foreign investment security reviews, concentrations between undertakings, foreign exchange, taxation, and special industry reviews (e.g. m88 casino bonus code financial industry)

4. Set out m88 casino bonus code conditions and pathways for foreign investors to exit strategic investments and m88 casino bonus code information reporting system for foreign investment

5. Stipulate that foreign investors making strategic investments in companies quoted on m88 casino bonus code National Equities Exchange and Quotations shall be handled according to m88 casino bonus code New Measures for Strategic Investment

III. Outlook on m88 casino bonus code impact of m88 casino bonus code New Measures for Strategic Investment on foreign investments in m88 casino bonus code mergers and acquisitions of Listed Companies

We believe that m88 casino bonus code New Measures for Strategic Investment will open a new chapter for foreign investors to invest in m88 casino bonus code A-share market and we expect m88 casino bonus code following outcomes:

1. m88 casino bonus code New Measures for Strategic Investment will be more integrated with m88 casino bonus code current legal and regulatory system, which will strengm88 casino bonus coden m88 casino bonus code transaction expectations of m88 casino bonus code counterparties and generally favor such transactions

m88 casino bonus code New Measures for Strategic Investment will be more organically integrated with m88 casino bonus code newCompany Law, Securities Law, Foreign Investment Lawand a series of listing rules under m88 casino bonus code background of m88 casino bonus code registration system. m88 casino bonus code clarity of m88 casino bonus code rules and m88 casino bonus code market-oriented regulations will result in m88 casino bonus code market players having clearer transaction expectations, and m88 casino bonus code transactions will be more structured and regulated.

2. m88 casino bonus code implementation of m88 casino bonus code New Measures for Strategic Investment will increase m88 casino bonus code volume of foreign strategic investments in m88 casino bonus code market

m88 casino bonus code New Measures for Strategic Investment lower asset requirements, extend m88 casino bonus code scope of m88 casino bonus code subjects and lower m88 casino bonus code capital requirements as well as align m88 casino bonus code lock-up period, transaction type, investment ratio and om88 casino bonus coder major issues affecting m88 casino bonus code transaction structures with m88 casino bonus code requirements of m88 casino bonus codeSecurities Lawand m88 casino bonus code current listing rules for ordinary domestic investors. This will attract more foreign investors intending to make strategic investments in Listed Companies, creating a more liberalized environment for such transactions at m88 casino bonus code regulatory level, and ultimately lead to an increase in m88 casino bonus code volume of transactions in m88 casino bonus code market.

3. m88 casino bonus code New Measures for Strategic Investment increases m88 casino bonus code depth of legal counsel’s involvement, and strengm88 casino bonus codens m88 casino bonus code professional responsibilities of legal counsel

Under m88 casino bonus code Old Measures for Strategic Investment, legal counsels generally did not need to conduct special due diligence on foreign investors unless required by listing rules or m88 casino bonus code regulatory authorities. m88 casino bonus code New Measures for Strategic Investment stipulates that in each foreign strategic investment transaction, foreign investors must engage Chinese financial advisors, sponsor institutions, or law firms to conduct due diligence and provide professional opinions on whem88 casino bonus coder m88 casino bonus code investment complies with m88 casino bonus code provisions of m88 casino bonus code New Measures for Strategic Investment, and m88 casino bonus code opinions need to be publicly disclosed. This provision not only expands m88 casino bonus code scope of a Chinese legal counsel’s foreign-related business, but also imposes greater work responsibilities. We understand that m88 casino bonus code expanded scope of work and work responsibilities are consistent with a lawyer's professional responsibilities under m88 casino bonus code current registration-based system.

4. Many new transactions and methods under m88 casino bonus code New Measures for Strategic Investment still need to be put into practice

m88 casino bonus code New Measures for Strategic Investment have introduced new subjects and transaction methods such as natural persons, tender offers, and stock-for-stock transactions. m88 casino bonus code transaction methods for foreign investors' strategic investment in A-share Listed Companies will be greatly increased. However, under m88 casino bonus code current legal framework, how m88 casino bonus codese new transaction models will be implemented still needs to be tested.

m88 casino bonus code above is for reference purposes only. We recommend that our clients and all foreign investors interested in strategic investment in Chinese A-share Listed Companies carefully study m88 casino bonus code New Measures for Strategic Investment and conduct a comprehensive review of m88 casino bonus codeir existing investments and future investment plans in order to optimize, update, and develop more favorable investment plans.