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Shanghai Stock Exchange Listing Rule

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Submitted By wangze200
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a) What are the criteria that a company must satisfy in order to be eligible for listing its shares on the exchange?

Listing Criteria
The rules governing the listing of stocks on Shanghai Stock Exchange were first come into effective in January 1998. Later on, these rules experienced several revises--- first time in May 2000, second time in June 2001, third time in February 2002, then in December 2004 and May 2006, and the latest revise happened in September 2008.

General Rules
The objectives of Shanghai Stock Exchange are to maintaining an orderly securities market and protecting the legitimate rights and interests of investors. In accordance with these purposes, there are some general criteria for corporations who want to list their stocks in Shanghai Stock Exchange.
Firstly, the companies should follow the regulations and laws of the People’s Republic of China, such us the Company Law, the Securities Law, the Measures on the Administration of Stock Exchanges and some other applicable laws and administrative regulations. When China Securities Regulatory Commission (CSRC) or the Shanghai Stock Exchange has other provisions on the listing, such provisions shall prevail.
Secondly, apart from the companies, the companies’ directors, supervisors, senior officers and relevant persons should also comply with laws, administrative regulations, and other regulations of the Shanghai Stock Exchanges.
Thirdly, an application for listing stocks on the Exchange shall be subject to the examination and approval of the Exchange. Prior to listing, the issuer shall enter into a listing agreement with the exchange and specify therein the rights and obligations of both parties and other relevant matters.

Initial Public Offering and Listing of IPO Stocks
If companies want to gain a l successful listing, the General Rules are requirements that all of them should comply with. In addition, an issuer that applies to the Shanghai Stock Exchange for listing its IPO stocks shall also meet some specific requirements.
1) its stocks have been offered to the public with the approval of the CSRC;
2) its total share capital is not less than RMB 50 million;
3) the quantity of public offered stocks accounts for more than 25 percent of its total stocks. For an issuer whose total share capital exceeds RMB 400 million, such percentage is 10 percent;
4) in the most recent three years, it has not committed any major illegal acts and there has been no falsehood in its financial reports; and
5) other requirements as may be imposed by the exchange.
These five provisions give the corporations a clear idea about whether they are

1.2
After the issuer launches its IPO upon the CSRC’s approval of its IPO application, it shall file with the Exchange a listing application in a timely manner along with the following documents:
1) listing application
2) the approval document issued by the CSRC for the IPO;
3) the resolutions of the board of the directors and the shareholders’ general meeting in respect of the IPO and listing;
4) photocopy of the company’s business license;
5) the articles of association of the company;
6) the financial reports of the company for the most recent three years audited by a CPA firm with the qualification for practice in securities- and futures – related business;
7) document evidencing the custody of all its IPO stocks with China Securities Depository and Clearing Corporation Limited Shanghai Branch(hereinafter, the Registration Company);
8) capital verification report produced by a CPA firm with the qualification for practice in securities- and futures- related business upon completing the IPO;
9) particulars on the shareholdings of directors, supervisors and senior officers and the Declaration and Undertaking with regard to Directors(Supervisors or Senior Officers);
10) relevant materials of the person who is intended to be appointed or has been appointed as the board secretary by the issuer;
11) the financial materials newly added during the period from the IPO to the listing pursuant to relevant regulations, and a statement on relevant material matters, if applicable;
12) document evidencing the post-listing one-year lock-up of the stocks issued and held before the IPO;
13) the undertaking as prescribed in Section 5.15 hereof;
14) the latest prospectus as well as the full set of IPO application documents as reviewed by the CSRA;
15) listing announcement prepared pursuant to relevant regulations;
16) sponsorship agreement and the letter of listing sponsorship produced by a sponser;
17) legal opinion issued by a law firm;
18) other documents as required by the exchange.

1.3 The issuer and its directors, supervisors and senior officers shall guarantee that the listing application documents submitted to the Exchange are truthful, accurate and complete…...

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