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Zheng Jian Fa [2004] No. 67 -- Notice of the China Securities Regulatory Commission on Several Issues Concerning Regulation of Overseas Listing of Companies Affiliated to Domestic Listed Companies

证监发[2004]67号《关于规范境内上市公司所属企业到境外上市有关问题的通知》

Issued: August 10, 2004

Effective: August 10, 2004

Issuing Authority: China Securities Regulatory Commission (CSRC)

The following are conditions to be met for the overseas listing of an affiliate company:

1) The listed company should show profits in the three consecutive years prior to listing;

2) The listed company's business and assets funded by way of issuing shares and fundraising in the previous three accounting years shall not be used as its contribution to the affiliate company for the application of overseas listing;

3) The percentage of the net profits that the listed company enjoyed by equity percentage in the affiliate company shall not exceed 50 percent of the net profits in the consolidated reports of the listed company;

4) The percentage of the net assets that the listed company enjoyed by equity percentage in the affiliate company shall not exceed 30 percent of the net assets in the consolidated reports of the listed company;

5) There shall be no competition between the listed company and the affiliate company for the same business;

6) The listed company's funds and assets cannot be taken up by any individual, legal person, or any other organization or its associate who has actual control power, nor should there exist other major relevant transactions that would damage the company's interests; and

7) The listed company shall not have committed any major acts in violation of laws and/or regulations in the past three years.

In order to maintain its ongoing listing status, the listed company should also employ a CSRC-registered securities dealer, which is listed as a guaranteed and recommended institution, to hold the position of financial advisor. A financial advisor shall, during the rest of the year in which the affiliate company lists itself overseas, and, throughout the following accounting year, continuously supervise the listed company in maintaining its independent listing status.