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To reinforce the supervision over the shares and the shareholding change of the directors, supervisors and senior management of listed companies, the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE) issued the "SSE Business Guidelines for Shares Management of Directors, Supervisors and Senior Management of Listed Companies" and the "SZSE Business Guidelines for Management of Shares and Shareholding Change of Directors, Supervisors and Senior Management of Listed Companies", respectively, on May 9.
The SSE Guidelines are to be implemented from June 1, 2007 while the SZSE Guidelines was effective from the issuance day, i.e., yesterday. Should any directors, supervisors and senior management of listed companies violate the regulations of the guidelines, the exchanges will impose punishment on them in light of the degree of the case.
As required by the SSE, the directors, supervisors and senior management of listed companies should entrust their companies with timely application or update of their basic individual information through the SSE website by use of the CA certificates from the SSE InfoNet Ltd. Based on their application data, the SSE will freeze all or some of their own companies' shares registered in their securities accounts. If the directors, supervisors and senior management leave their posts, the SSE will freeze all their current and additional shares for 6 months from their retiring days. After the expiration day, the SSE will unfreeze their shares without sales limit automatically.
On the first trading day of each year, the SSE will calculate the unfreezing limit, i.e., 25% of the listed A shares registered under the names of the listed companies' directors, supervisors and senior management on the last trading day of the year before. Meanwhile, the SSE will unfreeze their floating shares without sales limit within the unfreezing limit. For directors, supervisors and senior management suspected of irregular trading, the SSE has the right to freeze their current and additional shares of their own companies.
According to the SSE regulations, directors, supervisors and senior management of listed companies should report change of the shareholding of their own companies on the SSE website for timely information disclosure on the next day.
