The first Securities Law of the PRC come into effect on 1 July 1999, and has since undergone five amendments. The latest revision came into effect on 1 March 2020. It is more striking than all previous revisions, with many highlights. For instance, the new version officially launches a registration-based IPO system, lowers the prerequisite for issuing shares from “sustained profitability” to “sustainable operation ability”, strengthens information disclosure and investor protection, implements the presumed fault liability, introduces a representative litigation system, and adopts heftier fines for rule breakers.
The introduction of a registration-based IPO system, and the scrapping of the requirement of “sustained profitability” for new listings will attract more companies to finance through the capital market, and it is foreseeable that the number of China’s A-share listed companies will surge.
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Kevin Xie is an arbitrator of the China International Economic and Trade Arbitration Commission, and a senior partner of DeHeng Law Offices
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