Determination of confidential info in material asset restructurings of listcos

To regulate information disclosures on acquisitions and restructurings of listed companies, the Standards for the Substance and Format of Information Disclosures by Companies that Issue Securities to the Public, No 26: Material Asset Restructurings of Listed Companies (Standards No 26) issued by the China Securities Regulatory Commission sets forth express provisions, such as basic information on the subject matter of a transaction and equity details (Article 16 of Standards No. 26), the main business relating to the subject matter of the transaction (Article 21 of Standards No 26), etc.

Provisions on exemptions from information disclosure relating to subject matter of transactions. Article 4 of Standards No.26 specifies that, “where the disclosure or provision of certain information or documents specified herein is genuinely inconvenient due to such special reasons as the same involving state secrets or trade secrets (e.g., confidential information on core technology, specific provisions of commercial contracts, etc.), a listed company may opt not to disclose or provide the same, but shall explain in detail in the relevant sections the reason for not disclosing or providing the same in accordance with the requirements hereof. If the CSRC deems the disclosure or provision thereof necessary, the listed company shall disclose or provide the same.”

The rules of the Shenzhen Stock Exchange for the listing of stocks specify that “where information that a listed company proposes to disclose constitutes a state secret or trade secrets, or another circumstance recognized by the stock exchange applies thereto and disclosure or performance of the related obligations pursuant hereto could result in the listed company violating state laws or administrative regulations on confidentiality or harming its own interests, it may apply to the stock exchange for an exemption from disclosure or performance of related obligations in accordance herewith”.

Tang Shi is a salary partner at Grandway Law Offices