In order to carry out Guidance on Trial of Employee Stock Ownership Plan of Public Companies (hereinafter referred as Guidance) issued by China Securities Regulatory Commission, propel and guide the public companies to carry out employee stock ownership plan in compliance with law effectively, and standardize the information disclosure of the public companies and relevant parties, Shenzhen Stock Exchange (SZSE) recently issued Memo of Information Disclosure on Employee Stock Ownership Plan (hereinafter referred as Memo).
Adhering to the philosophy of deregulation, strengthening supervision, convenient operation, combing with the employee stock ownership plan launched by companies listed on Shenzhen Market, Memo, on the basis of major principles and crucial requirement of Guidance, further refined the requirement on information disclosure of scheming, examination and review, implementation of employee stock ownership plan. Major contents and features of Memo are reflected on the following aspects:
Firstly, the standard requirement on similar employee stock ownership plan is explicitly defined. Memo is not only applicable for the employee stock ownership plan stipulated in the Guidance, but also applicable for similar employee stock ownership plan implemented by directors, supervisors and senior management or other employee of the public company via launching asset management plan, trust plan, etc..
Secondly, guidance on operation of insider information management is strengthened. Memo guides public companies to strengthen insider information management, prevent the advance leakage of insider information, and protect the interests of small-and-medium investors via issuing reminder announcement or applying for trading suspension; meanwhile Memo standardizes the disclosure content of reminder announcement, guiding public companies to resolve the risk of leakage of insider information through disclosing information in stages.
Thirdly, the requirement on draft of plan and disclosure on major alteration in the follow-up stage is refined. Memo enhances the transparency of information disclosure on employee stock ownership plan in two major aspects: first, the requirement on disclosure on the draft of employee stock ownership plan is further refined. For example, arrangement of lock-up period, procedure of duration extension, classified disclosure of the shareholding by directors, supervisors, senior management and ordinary employee who participated the plan, and risk separation arrangement under the self-management pattern, etc. should be disclosed; second, requirement on ad hoc information disclosure is increased when major impact occurs to the plan, for example, alteration, advance termination of the employee stock ownership plan occur, or a third person puts forward proposition regarding the stock and capital of the employee stock ownership plan, etc..
Fourthly, lawyer’s responsibility of checking the law compliance of the plan is explicitly stipulated. Memo, on the basis of the Guidance, refined the requirement on the legal opinion document, requiring lawyer to issue their opinion on the law compliance of the participants, source of capital, source, duration, scale and management pattern of the stock in the legal opinion documents, supervising and urging lawyers to shoulder the duty of checking the law compliance of the plan to ensure that the employee stock ownership plan is implemented in compliance with law effectively