China: New Rules on Foreign Investment Through Merger or Acquisition
|
|
- Mabel Robinson
- 8 years ago
- Views:
Transcription
1 China: New Rules on Foreign Investment Through Merger or Acquisition The new Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "New M&A Rules") were promulgated on August 8, 2006 and became effective on September 8, Though potentially an opportunity to encourage M&A in the People's Republic of China ("China" or the "PRC"), the revisions to the previous Interim Provisions on Mergers and Acquisitions for Domestic Enterprises by Foreign Investors (the "Old M&A Rules") focus primarily on controlling and monitoring round-trip investment and strengthening the regulatory authority of certain agencies. Significant questions are raised as to the intent and procedural implementation of new provisions that attempt to strengthen government regulation of cross border M&A transactions. Highlights The basic approval requirements remain. Acquisitions of equity of non-foreign-invested enterprises in the PRC and assets of PRC enterprises by foreign acquirors must be approved by the Ministry of Commerce ("MOFCOM") or its provincial delegate authority. The acquisition value must be appraised by an independent Chinese appraisal organization. Expansion of MOFCOM's authority. MOFCOM is now given broad authority to unwind transactions resulting in foreign "control" of a company in a "key industry", an industry that affects economic security or a company owning a wellknown trademark or established Chinese brand. Transactions that may result in such control must be reported to MOFCOM. A definition of "control" is not included, and the concepts and procedures for the exercise of this power remain very unclear. Piercing the Corporate Veil. Popular structures allowing Chinese investors to hold shares in PRC companies through offshore vehicles become subject to new disclosure requirements. Structures that avoid investment or foreign exchange controls are explicitly prohibited. No Preferential Treatment for Round-Trip Foreign Investment. When overseas companies with PRC shareholders carry out acquisitions in the PRC under the New M&A Rules, the target company qualifies for the benefits of foreign-invested enterprises only if non-prc shareholders make new capital contributions equal to at least 25% of the enlarged capital of the target company. Authorization of Share Swaps. The New M&A Rules enable acquisitions through share swaps between foreign acquiror and PRC target. However, the foreign party must be a listed company or a special purpose vehicle established by PRC shareholders for the purpose of listing PRC assets.
2 Timing for Share Swap. A share swap must be completed within 6 months after MOFCOM approval if the foreign party is a listed company. If the foreign party is a special purpose vehicle, it must complete the share swap and its overseas listing within one year after approval. If the deadline is not met, the MOFCOM approval becomes void. CSRC's Approval. The overseas listing of the special purpose vehicle involved in the share swap must be approved by the China Securities Regulatory Commission ("CSRC"). Areas of Continuity The basic scope of the New M&A Rules remains the same as before. The New M&A Rules apply to the acquisition of, or subscription for, equity interests in nonforeign invested enterprises ("Domestic Companies") and the purchase of assets of Domestic Companies or the acquisition by foreign investors of assets of PRC enterprises that are injected into a foreign invested enterprise. The New M&A Rules also preserve the anti-trust provisions of the Old M&A Rules without modification, but it is expected that this regime will be revised to comply with the PRC Anti- Monopoly Law, after this law is adopted. Like the Old M&A Rules, the New M&A Rules were issued by MOFCOM, the State Administration for Industry and Commerce ("SAIC"), the State Administration of Foreign Exchange ("SAFE") and the State Administration of Taxation. In addition, the State-Owned Assets Supervision and Administration Commission and CSRC were added to the list of promulgating authorities, signalling a greater role for these agencies in M&A transactions. Additional Controls and Standards for Foreign Acquirors with PRC Shareholders Disclosure Obligation Article 15 of the New M&A Rules requires that the parties to a merger or acquisition must affirmatively state whether there is an affiliate relationship 1 between them. If two parties to the transaction are actually controlled by the same person 2, the 1 2 The New M&A Rules do not define "affiliate relationship". Section 217 (4) of the Company Law provides that an "affiliate relationship" is the relationship between a controlling shareholder, actual controlling person, director, supervisor or senior management personnel of a company and an enterprise directly or indirectly controlled by such person, or any other relationship which may result in the transfer of the interests of the company. The New M&A Rules do not define "actual control". Section 217(3) of the Company Law defines "actual controlling person" as a person who is not a shareholder but is able to dominate a company through an investment relationship, agreement or other arrangement. There is a much broader definition of "control" under SAFE Notice 75. According to Notice 75, a domestic resident has "control" when it acquires the operating rights, profit rights or the decision-making rights 2
3 identity of the actual controlling shareholder, the purpose of the transaction and whether the appraisal value represents fair market value must also be disclosed. Article 15 specifically prohibits attempts to avoid the disclosure requirement through the use of trusts, nominees or other methods. This information will allow SAFE to enforce compliance with Notice 75 3, which requires PRC investors to register with SAFE the establishment of overseas companies established with PRC assets or equity interests in order to obtain overseas equity financing, as well as inbound investments made by such companies. Post-Acquisition Qualifications of FIEs Like the Old M&A Rules, the New M&A Rules require that, post acquisition, a Domestic Company must have at least 25% foreign investment to qualify for the favorable treatment reserved to foreign-invested enterprises ("FIEs"). Now, however, Article 9 adopts a "look-through" principle for determining whether the postacquisition company reaches this threshold. If a Domestic Company is acquired by an offshore company that is actually controlled by a Domestic Company or PRC enterprises or individuals ("Domestic Shareholders"), the acquired company will not be treated as a FIE unless (1) the offshore company subscribes to an increase in capital, (2) the additional capital contribution by the offshore company represents 25% or more of the increased registered capital of the PRC company and (3) the shareholding of foreign investors other than the actual controlling shareholder represents at least 25% of the registered capital of the PRC company. Thus, MOFCOM (as approval authority), SAIC (as company registration authority), SAFE (with regard to the foreign exchange treatment of FIEs) and the State Administration of Taxation (with regard to the tax treatment of FIEs) will "look through" the offshore company to determine the FIE status of the PRC company. Note that this look-through principle applies to all offshore companies "established by" Domestic Shareholders, even if the Domestic Shareholders do not "actually control" the offshore company. Also, the New M&A Rules do not clarify whether the minimum 25% shareholding of other foreign investors is determined by aggregating both direct and indirect equity holdings of non-domestic Shareholders, and whether such indirect holdings are verified on an ongoing basis. MOFCOM Approval for Acquisitions of Affiliates of Domestic Shareholders If an offshore company established or controlled by a Domestic Shareholder acquires a Domestic Company affiliated with such Domestic Shareholder, the through acquisition, trust, voting rights, re-purchase or convertible bonds. It is not yet clear which definition MOFCOM and SAFE will apply going forward. 3 Notice Huifa [2005] No. 75 regarding the Relevant Issues on Foreign Exchange Control relating to Corporate Financing and Inbound Investment by Domestic Residents through Their Offshore Special Purpose Companies dated October 21,
4 acquisition must be approved by MOFCOM. Unlike M&A transactions in general, there is no specific delegation of this approval authority to local authorities under MOFCOM. If central government approval is required, this will lengthen the time within which a transaction can be completed. It is specifically stated that the approval requirement for such affiliate transactions cannot be avoided by using a foreign invested company as the acquiror or through other methods. How this anti-avoidance provision will be enforced is unclear. Except in certain industries, acquisition of equity interests by FIEs do not require MOFCOM approval. The New M&A Rules stop short of instituting a special approval procedure for such onshore acquisitions. Potentially, investments by Domestic Shareholder controlled overseas companies in FIEs will have to be submitted under the New M&A Rules, even though they do not fall under the scope of the New M&A Rules, if a subsequent onshore acquisition is intended. Share Swaps Chapter 4 of the New M&A Rules carefully regulates the conditions under which onshore investors can exchange or "swap" equity in PRC companies for equity in offshore companies. Companies Eligible for Share Swaps Article 29 sets forth the types of overseas companies that qualify to swap their shares with PRC companies. Such companies must be legally established in a jurisdiction with a comprehensive securities exchange system, and the shares exchanged in the transaction must be freely transferable, free from encumbrances, listed on a securities exchange and "steadily" traded during the last 12 months. There is no guidance as to what is meant by "steadily traded". Companies traded on overthe-counter markets are not permitted to use their shares as consideration. The listed securities and steady trading requirements do not apply to special purpose vehicles ("SPVs"). Article 39 defines an SPV as an offshore company that is formed by Domestic Companies or PRC individuals for the purpose of listing a Domestic Company that they actually own on an overseas stock exchange. Foreign companies that are neither listed on a securities exchange nor controlled by a Domestic Company or PRC individual are not referred to in the New M&A Rules and do not seem to qualify for share swaps. Minimum Valuation for SPVs Article 43 requires that the overseas listing price for the shares of the SPV cannot be less than the valuation of the onshore equity interest determined by a PRC asset appraisal company in the share swap that preceded the listing. Although the remit of the asset appraisal company is limited to valuing onshore assets only, its valuation will thus effectively set a floor for the listing price of the SPV's shares. This requirement will distort the pricing process for initial public offerings ("IPOs") of SPVs and may cause IPOs to fail if the market values the SPV at less than the asset appraisal agency's valuation of the underlying Domestic Company. The 4
5 New M&A Rules provide no mechanism for conducting a new valuation of the Domestic Company in such case, even if between the initial valuation and the IPO, events occurred that could reduce the value of the Domestic Company. Mandatory Appointment of M&A Consultant In any share swap transaction, the Domestic Company or its shareholders must engage a PRC registered professional organization as "M&A Consultant". The M&A Consultant is tasked with conducting due diligence on the application documents for the transaction and the financial standing of the offshore company, as well as reviewing the transaction application documents for compliance with certain provisions of the New M&A Rules. The M&A Consultant's report must be submitted to MOFCOM as part of the application for approval of the share swap. In addition, in a share swap transaction with an SPV, the M&A Consultant must produce its own separate appraisal of the price at which shares of the SPV will be issued in the IPO. The rationale for these requirements seems to be that Domestic Companies in share swaps should obtain investment banking advice and regulatory guidance similar to that provided by an M&A adviser or IPO sponsor, and which is separate from the advice on which the foreign party to the share swap relies. The New M&A Rules are silent on who qualifies to be an M&A Consultant. The primary qualification for becoming an M&A Consultant is to have the ability to analyze the legal systems of the jurisdiction of listing and incorporation of an SPV. Apart from that requirement, it is unclear whether a licensing system will established to designate M&A Consultants and whether foreign participation will be permitted. Control Over Transactions by Parties to Share Swaps During the period between MOFCOM approval of the share swap and completion of the share swap or the listing of the SPV, the Domestic Company is prohibited from distributing profits to shareholders, granting security to affiliates or making payments in connection with share transfers, capital reductions or liquidations. The proceeds from the listing of the SPV fall under SAFE supervision. They must be remitted into China in the form of debt, equity or payment of consideration for acquisitions according to a remittance plan filed with SAFE. Completion Deadlines for Share Swaps The New M&A Rules also grant MOFCOM and SAIC broad authority to unwind share swaps if completion deadlines and procedural requirements are not met. Share swaps are approved by MOFCOM and registered with SAIC as the government authorities with oversight over the Domestic Company involved, before they can be completed by the issuance of shares in the relevant overseas company. However, the MOFCOM approval and SAIC registration are only temporary. In a share swap with an overseas listed company, overseas investment procedures under separate MOFCOM and SAFE rules (including Notice 75) must be carried out and the transaction completed within six months after MOFCOM approval of the share swap; otherwise the MOFCOM approval becomes void, and the SAIC registration must revert to the original registered capital and shareholding. 5
6 If the share swap involves an SPV, the overseas listing of the SPV must be completed within one year after MOFCOM approval of the share swap and reported to MOFCOM for issuance of a definitive approval certificate. If the listing is not completed and the definitive MOFCOM approval not obtained within this one-year period, the initial MOFCOM approval becomes void and the SAIC registration must revert to the original registered capital and shareholding. For this purpose, Articles 34 and 46 require Domestic Companies to execute in advance documents required to restore the pre-acquisition share structure, including equity interest transfers, amendments to the articles of association of the Domestic Company and the necessary application for the transfer of equity interest. What is not clear from these provisions is whether these "restorative" documents are selfexecuting or whether SAIC and MOFCOM must actually make a determination to restore the pre-transaction structure. The time limits under the New M&A Rules heavily constrain share swap transactions. Six months for completion of a share swap with a listed company may be insufficient if, in addition to PRC requirements, complex overseas approval procedures apply or if the transaction involves a complex restructuring. The one-year time frame for listing the SPV involved in the share swap means that such transactions are only available for investments shortly before IPO, but not for early stage investments. If the IPO fails or is delayed, the transaction cannot be completed on the basis of the existing MOFCOM approval, but must be completed unwound. These constraints will incite investors to avoid share swaps. Alternatively, Domestic Shareholders can obtain shares in overseas companies for consideration other than equity in Domestic Companies, or Domestic Shareholders will hold shares only in the PRC investee companies of the offshore company, followed by a share swap once a firm IPO plan has been adopted. CSRC Authority over SPV Listing Article 40 provides that CSRC approval is now required to list any SPV on an overseas stock exchange, whereas previously, since 2003, no PRC government approval was required to list an overseas company with PRC assets. CSRC has begun to assert its authority over SPV listings, with reference to not only the New M&A Rules, but also the 1997 State Council Circular on Further Strengthening Administration of the Issue and Listing of Shares Outside China (which require CSRC approval for overseas IPOs by all Chinese-controlled issuers). On its website, CSRC has posted a detailed list of documents to be submitted to CSRC for approval of overseas listing of SPVs, including the following major documents that are not required for MOFCOM approval of the share swap: an application report which contains, inter alia, a risk analysis and business development objectives; an analysis and report by an overseas investment bank; and a PRC legal opinion. 6
7 Authority to Unwind Transactions in Strategic Industries and Companies Whereas MOFCOM always had the right to not approve a transaction, the New M&A Rules now provide that MOFCOM also has the authority to unwind certain transactions. Similar to the requirements of the U.S. Exon-Florio amendment to the Defense Production Act of 1950 (the "Exon-Florio Amendment"), the new Article 12 creates a voluntary reporting requirement for transactions in which foreign investors acquire actual control of a company in a "key industry" or industry that may affect the economic security or a well-known trademark or established Chinese brand. However, the New M&A Rules provide very little guidance as to what industries are deemed "key" or what constitutes an established Chinese brand. Unlike the Exon-Florio Amendment, which applies prior to the consummation of a merger, the New M&A Rules grant MOFCOM the authority to unwind a transaction in the event MOFCOM discovers the completion of a transaction that should have been, but was not, reported. In the event the parties fail to report an Article 12 transaction to MOFCOM, MOFCOM has the authority to request that the parties terminate the transaction, unwind the transaction after it has been completed or take any steps necessary to mitigate the effects of the transaction on the economic security of the State. This provision creates a significant incentive for acquirors to report any transaction that may be deemed to fall under Article 12, as there is no safe harbor for parties who reasonably believed they had no obligation to report. Despite the broad scope of transactions that could be affected by Article 12, and recent controversies over foreign private equity investments in machinery and financial services industries, MOFCOM may not be eager to aggressively exercise this new-found power. Like the anti-trust review mechanism under both the Old and New M&A Rules, MOFCOM has imported a regulatory tool from foreign jurisdictions, but is not yet sure how to handle it, and may not want to apply it except in particularly flagrant cases. * * * This memorandum is not intended to provide legal advice with respect to any particular situation and no legal or business decision should be based solely on its content. Questions concerning issues addressed in this memorandum should be directed to any member of the Paul Weiss China Practice Group, including: Jeanette K. Chan jchan@paulweiss.com (852) or (86-10) John E. Lange jlange@paulweiss.com (852) Marcia Ellis mellis@paulweiss.com (852) Hans-Günther Herrmann hherrmann@paulweiss.com (852) Corinna Yu cyu@paulweiss.com (86-10) Paul, Weiss, Rifkind, Wharton & Garrison LLP 7
Ship finance leasing in China
Ship finance leasing in China FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES Jonathan Silver Of Counsel, Norton
More informationUtilising British Virgin Islands and Cayman Islands entities for Private Equity Investment into China
Utilising British Virgin Islands and Cayman Islands entities for Private Equity Investment into China Hong Kong/Investment Funds/525578 As offshore legal counsel based in Hong Kong, we commonly deal with
More informationChina s New Foreign Exchange Rule Expands Scope and Streamlines Registration Process
August 2014 China s New Foreign Exchange Rule Expands Scope and Streamlines Registration Process By Steven Xiang, Anthony Wang and Yi Chen A frequently asked due diligence question for private equity or
More informationREGULATORY OVERVIEW. PRC Laws and Regulations Relating to the Product Liability
Although our Company was incorporated in the Cayman Islands, a substantial part of our Group s operations are conducted in the PRC and are governed by PRC Laws and Regulations. This section sets out summaries
More informationWal-Mart Acquisition Shows China E-Commerce Is Opening Up
Portfolio Media. Inc. 860 Broadway, 6th Floor New York, NY 10003 www.law360.com Phone: +1 646 783 7100 Fax: +1 646 783 7161 customerservice@law360.com Wal-Mart Acquisition Shows China E-Commerce Is Opening
More informationCHINA UPDATE: CHINA (SHANGHAI) PILOT FREE TRADE ZONE SPECIAL EDITION November - December 2013
CHINA UPDATE: CHINA (SHANGHAI) PILOT FREE TRADE ZONE SPECIAL EDITION November - December 2013 China (Shanghai) Pilot Free Trade Zone Framework Released... 1 Tax and Customs Policies in the Zone... 3 Reformation
More informationRelaxation of PRC regulatory restrictions on cross-border security and guarantees
May 2014 Relaxation of PRC regulatory restrictions on cross-border security and guarantees 1 Introduction After much anticipation 1, SAFE has finally published the Regulation on Foreign Exchange Administration
More informationInvestment Management Alert
Investment Management Alert May 29, 2015 The CSRC and the SFC Announces Launch of the Mainland-Hong Kong Mutual Recognition of Funds Scheme Introduction On May 22, 2015, the Hong Kong Securities and Futures
More informationE-ALERT China Practice
E-ALERT China Practice February 18, 2011 CHINA ISSUES NATIONAL SECURITY REVIEW RULES FOR FOREIGN INVESTMENT China has established a new process for reviewing the national security implications of foreign
More informationA 360-Degree look at Secondment tax issues: China and the United States Corporate China Alert - 19 August 2013
A 360-Degree look at Secondment tax issues: China and the United States Corporate China Alert - 19 August 2013 In this article, Roberta Chang discusses the recent guidance issued by the Chinese State Administration
More informationThe China Stock Exchange IPO Overview 1
The China Stock Exchange IPO Overview 1 1. Regulatory Background 1.1 Overview of Regulatory In China, there are two public stock exchange markets, i.e., Shanghai Stock Exchange (the SSE ) and Shenzhen
More informationForeign Investor s Chance to Invest in RMB EIE/EIFs by Means of RFDI
Llinks Corporate Bulletin April 2012 New Means for Foreign Investors to Invest in RMB Equity Investment Funds: By David Yu, Nicholas Lou and Kevin Huang Ever since the promulgation of the Administrative
More informationMergers and Acquisitions in China
Mergers and Acquisitions in China In the past 20 years, since the adoption of the Open Door policy, most foreign investments have been Greenfield projects in the form of WFOE s or JV s. Whilst the structure
More informationThe introduction of a new filing and registration regime for foreign debt management in China
The introduction of a new filing and registration regime for foreign debt management in China 1 Briefing note November 2015 The introduction of a new filing and registration regime for foreign debt management
More informationPrivate Equity and Strategic Mergers & Acquisitions Working Group
Private Equity and Strategic Mergers & Acquisitions Working Group Key Recommendations I. Clarify the Status of Foreign Private Equity (PE) Firms in China and Create a Level Playing Field (NDRC, CSRC, SAFE)
More informationForm II-OC&F. - 1-2010.08.01 Version
(Translation for Reference Only) Illustration of Application for Initial Investment in Newly Established or Existing Domestic Companies Example of a case featuring inward remittance and foreign exchange
More informationTAXATION AND FOREIGN EXCHANGE
TAXATION OF EQUITY HOLDERS The following is a summary of certain PRC and Hong Kong tax consequences of the ownership of H Shares by an investor that purchases such H Shares in the Global Offering and holds
More informationTopicsinChineseLaw AN O'MELVENY & MYERS LLP RESEARCH REPORT. China's Regulation of "Round Trip Investments" * by Howard Chao and Kaichen Xu **
TopicsinChineseLaw AN O'MELVENY & MYERS LLP RESEARCH REPORT January 2008 China's Regulation of "Round Trip Investments" * by Howard Chao and Kaichen Xu ** During the past couple of years, China has been
More informationGlobal Stock Options. COLOMBIA Brigard & Urrutia Abogados
Global Stock Options COLOMBIA Brigard & Urrutia Abogados CONTACT INFORMATION: Pilar Lopez Brigard & Urrutia Abogados Calle 70A No. 4-41 Bogota, D.C. Colombia 571. 346 2011 plopezb@bu.com.co To understand
More informationRevised May 2007. Corporate Governance Guideline
Revised May 2007 Corporate Governance Guideline Table of Contents 1. INTRODUCTION 1 2. PURPOSES OF GUIDELINE 1 3. APPLICATION AND SCOPE 2 4. DEFINITIONS OF KEY TERMS 2 5. FRAMEWORK USED BY CENTRAL BANK
More informationCatalogue of Major Existing Laws and Regulations in Effect on Foreign Exchange Administration (as of June 30, 2015) 1
Catalogue of Major Existing Laws and Regulations in Effect on Foreign Exchange Administration (as of June 30, 2015) 1 I. General (24 Items) 1- Basic Rules 1. Regulations of the People's Republic of China
More informationDoing Deals in Asia - Pacific
Doing Deals in Asia - Pacific By Richard Andersen, C.E.O., ShareVault Based on a webinar given by: Charles Comey, Partner, Morrison & Foerster & Co-chair of the China Private Equity Group Introduction
More informationMODEL SCHEDULE OF WTO COMMITMENTS FOR INVESTMENT BANKING, TRADING, AND ASSET MANAGEMENT Explanatory Memorandum
March 8, 2005 MODEL SCHEDULE OF WTO COMMITMENTS FOR INVESTMENT BANKING, TRADING, AND ASSET MANAGEMENT Explanatory Memorandum I. INTRODUCTION Internationally active securities companies are working together
More informationLEGAL FLASH I SHANGHAI OFFICE
LEGAL FLASH I SHANGHAI OFFICE Special edition 2013 INDEX UPDATE ON TAX REGULATIONS 2013 2 INTERIM PROVISIONS ON LABOR DISPATCH 5 UPDATE ON TAX REGULATIONS 2013 We started our special edition updates last
More informationCorporate Finance and Mergers &
Corporate Finance and Mergers & Acquisitions 25 Corporate Finance and Mergers & Acquisitions Canada has well-developed and sophisticated capital markets. The main sources of capital are Canadian chartered
More informationPOLICY 5.6 NORMAL COURSE ISSUER BIDS
Scope of Policy POLICY 5.6 NORMAL COURSE ISSUER BIDS This Policy sets out the procedures and policies of the Exchange with respect to normal course issuer bids made through its facilities. In general,
More informationCABLE TV: WHAT DO THE NEW PROCEDURES OFFER?
P A U L, W E I S S, R I F K I N D, W H A R T O N & G A R R I S O N CABLE TV: WHAT DO THE NEW PROCEDURES OFFER? JEANETTE CHAN MARCIA ELLIS - ANTHONY ZHAO PUBLISHED IN CHINA LAW & PRACTICE JUNE 2000 PAUL,
More informationCayman Islands Companies: The Asia Connection
BERMUDA BRITISH VIRGIN ISLANDS CAYMAN ISLANDS CYPRUS DUBAI HONG KONG LONDON MAURITIUS MOSCOW SÃO PAULO SINGAPORE conyersdill.com December 2010 Cayman Islands Companies: The Asia Connection The Cayman Islands
More informationDECEMBER 8, 2010 FINANCIAL MARKETS UPDATE. SEC Proposes Rules Exempting Certain Private Fund Advisers from Investment Adviser Registration.
December 8, 2010 FINANCIAL MARKETS UPDATE SEC Proposes Rules Exempting Certain Private Fund Advisers from Investment Adviser Registration The Securities and Exchange Commission (the SEC ) has published
More informationEngland and Wales Treasury Shares Guide IBA Corporate and M&A Law Committee [2014]
England and Wales Treasury Shares Guide IBA Corporate and M&A Law Committee [2014] Contact Greg Scott, Partner Memery Crystal LLP gscott@memercrystal.com 1 Contents Page SCOPE OF THIS REPORT... 3 GENERAL
More informationSEC Adopts Final Rules for Crowdfunding
November 4, 2015 SEC Adopts Final Rules for Crowdfunding On October 30, 2015, the Securities and Exchange Commission (the SEC ) adopted final rules under Title III of the Jumpstart Our Business Startups
More informationThe Bermuda Stock Exchange
The Bermuda Stock Exchange Foreword This Memorandum has been prepared for the assistance of anyone who requires information about the Bermuda Stock Exchange. It deals in broad terms with the Bermuda Stock
More informationDodd-Frank Act Changes Affecting Private Fund Managers and Other Investment Advisers By Adam Gale and Garrett Lynam
Dodd-Frank Act Changes Affecting Private Fund Managers and Other Investment Advisers By Adam Gale and Garrett Lynam I. Introduction The Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd-Frank
More informationANGEL FINANCING: ANNOTATED TERM SHEET
ANGEL FINANCING: ANNOTATED TERM SHEET Perkins Coie LLP This term sheet has been prepared assuming a fairly standard preferred stock financing by angel investors for an Oregon corporation. The specific
More informationDoing Business in China
Doing Business in China Cover image provided by Jenny Chan, Baker & McKenzie This publication is copyright. Apart from any fair dealing for the purposes of private study or research permitted under applicable
More informationChapter 7 GENERAL ACCOUNTANTS REPORTS AND PRO FORMA FINANCIAL INFORMATION. When required
Chapter 7 GENERAL ACCOUNTANTS REPORTS AND PRO FORMA FINANCIAL INFORMATION When required 7.01 This Chapter sets out the detailed requirements for accountants reports on the profits and losses, assets and
More informationHong Kong s Proposed Exemption For Private Equity Funds: A Step in The Right Direction
Volume 74, Number 5 May 5, 2014 Hong Kong s Proposed Exemption For Private Equity s: A Step in The Right Direction by Patrick Yip, Agnes Cheung, Finsen Chan, and Roy Phan Reprinted from Tax Notes Int l,
More informationUPDATE. Equity Compensation New Ground Rules For Shareholder Approval. II. New Shareholder Approval Requirements for NYSE and Nasdaq Companies 1
October 2003 Intellectual Corporate Department Property & Technology Law kramerlevin.com Equity Compensation New Ground Rules For Shareholder Approval I. Introduction The New York Stock Exchange, Nasdaq
More informationCommercial Banks to Launch Fund Management Companies
Commercial Banks to Launch Fund Management Companies Christophe Han and Charles Qin Following an extended period of solicitation of opinions and a heated debate on the issues of commercial bank's incorporation
More informationThe Federal Reserve s Final Rule on Merchant Banking and Revised Capital Proposal for Investment Activities
MEMORANDUM May 4, 2001 RE: The Federal Reserve s Final Rule on Merchant Banking and Revised Capital Proposal for Investment Activities The Federal Reserve Board (the FRB ) has taken two important steps
More informationSection 162(m): Limit on Compensation Regina Olshan, Skadden, Arps, Slate, Meagher & Flom LLP and Paula Todd, Towers Watson
Section 162(m): Limit on Compensation Regina Olshan, Skadden, Arps, Slate, Meagher & Flom LLP and Paula Todd, Towers Watson This Practice Note is published by Practical Law Company on its PLC Employee
More informationSUMMARY OF CONTENTS. Economic Cooperation
SUMMARY OF CONTENTS Economic Cooperation The Chinese central government and the government of the Hong Kong SAR have signed a Supplement IV to the Mainland and Hong Kong Closer Economic Partnership Arrangement
More informationChina opens up its bank card payment clearing market
June 2015 China opens up its bank card payment clearing market The Decision to Implement Market Access Administration for Bank Card Clearing Institutions (the Decision ) of the State Council, which came
More informationCFIUS and Network Security Agreements 1
CFIUS and Network Security Agreements 1 Mark E. Plotkin 2 David M. Marchick 3 David N. Fagan 4 This memorandum provides an overview of the principal U.S. government national security considerations and
More informationTAXATION AND FOREIGN EXCHANGE
This appendix contains a summary of laws and regulations in respect of taxation and foreign exchange in Hong Kong and the PRC. I. TAXATION IN THE PRC 1. Taxes Applicable to Joint-Stock Limited Companies
More informationTemporary Measures on Overseas Use of Foreign Exchange Insurance Funds 保 险 外 汇 资 金 境 外 运 用 管 理 暂 行 办 法
Temporary Measures on Overseas Use of Foreign Exchange Insurance Funds 保 险 外 汇 资 金 境 外 运 用 管 理 暂 行 办 法 Chapter I General Provisions Article 1 These Measures are formulated in accordance with the Insurance
More informationAudit and Permitted Non-Audit Services Pre-Approval Policy (Pertaining to the Company s Independent Auditor)
Audit and Permitted Non-Audit Services Pre-Approval Policy (Pertaining to the Company s Independent Auditor) Statement of Principles Pursuant to the Sarbanes-Oxley Act of 2002 (the Act ) and in accordance
More informationRecognition of Funds (MRF) A new era for asset management in China and Hong Kong
www.pwchk.com Mainland and Hong Kong Mutual Recognition of Funds (MRF) A new era for asset management in China and Hong Kong Getting ready to access the China and Hong Kong asset management markets Foreword
More informationArticles. SEC Adopts Rules to Allow Crowdfunding Beginning May 16, 2016. Alan Bickerstaff, Jeff C. Dodd and Ted Gilman December 2, 2015
SEC Adopts Rules to Allow Crowdfunding Beginning May 16, 2016 Alan Bickerstaff, Jeff C. Dodd and Ted Gilman December 2, 2015 Over two years after proposing rules, the Securities and Exchange Commission
More informationOnshore Financial Investing in China
Onshore Financial Investing in China White Paper by Howard Chao, Partner, O Melveny & Myers LLP Beijing and Silicon Valley Offices Walker Wallace, Partner, O Melveny & Myers LLP Shanghai Office and Yi
More informationFinal Foreign Private Adviser and Private Fund Adviser Rules Issued by the U.S. Securities and Exchange Commission.
July 2011 Final Foreign Private Adviser and Private Fund Adviser Rules Issued by the U.S. Securities and Exchange Commission. Contents Implications for Non-U.S. Investment Advisers On June 22, 2011, the
More informationBuyback of equity and debt securities in Switzerland
Seite 1 von 11 Buyback of equity and debt securities in Switzerland Resource type: Articles: know-how Status: Law stated as at 01-Nov-2009 Markus Pfenninger and Lukas Wyss, Walder Wyss & Partners Ltd A
More informationCROSS-BORDER LEGAL AND TAX CONSIDERATIONS FOR U.S. ISSUERS GUIDE
CROSS-BORDER LEGAL AND TAX CONSIDERATIONS FOR U.S. ISSUERS GUIDE Introduction Through a well-charted growth strategy, U.S. companies can list on TSX Venture Exchange, or Toronto Stock Exchange, and then
More informationREED SMITH LLP INVESTMENT ADVISER NEWS QUARTERLY UPDATE
4th Quarter 2004 REED SMITH LLP INVESTMENT ADVISER NEWS QUARTERLY UPDATE The Investment Adviser News features regulatory and other news items of interest to the investment management industry and investment
More informationDECISION NO (94/R) OF 2005 CONCERNING THE LISTING OF DEBT SECURITIES
DECISION NO (94/R) OF 2005 CONCERNING THE LISTING OF DEBT SECURITIES The Chairman of the Board of Directors of the Stocks and Commodities Authority has, After pursuing the provisions of Federal Law No.
More informationThe Revised Canadian Take-Over Bid and Issuer Bid Regime. February 2008
The Revised Canadian Take-Over Bid and Issuer Bid Regime Table of Contents INTRODUCTION...1 TAKE-OVER BIDS...2 WHAT IS A TAKE-OVER BID?...2 ACTING JOINTLY OR IN CONCERT...2 EQUAL TREATMENT OF TARGET'S
More informationACQUISITIONS IN CHINA : ASSET OR SHARE DEAL?
The opportunities offered to foreign investors by the Chinese mergers and acquisitions market are increasing every year: in 2010, transactions involving foreign companies came to 60.1 billion euros, an
More informationChapter 1 GENERAL INTERPRETATION
Chapter 1 GENERAL CHAPTER 1 INTERPRETATION For the avoidance of doubt, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited apply only to matters related to those securities
More informationCHAPTER I GENERAL PROVISIONS
China Securities Depository and Clearing Corporation Ltd. Implementing Rules for Registration, Depository and Clearing Services under the Shanghai-Hong Kong Stock Connect Pilot Program Declaimer: For the
More informationFrance Takeover Guide
France Takeover Guide Contact Youssef Djehane BDGS Associés djehane@bdgs-associes.com Contents Page INTRODUCTION 1 PUBLIC OFFERS IN FRANCE: GENERAL OVERVIEW 1 PUBLIC OFFERS: KEY HIGHLIGHTS 1 PUBLIC OFFERS:
More informationShare with a colleague. 16 July 2012 Hong Kong. Awards. Background. International TMT Team of the Year China Law & Practice Awards, 2011
Page 1 of 2 Breaking news: PRC telecoms market finally open for private domestic and foreign investments? On 27 June 2012, the Ministry of Industry and Information Technology released a ground-breaking
More informationThe Bank of Nova Scotia Shareholder Dividend and Share Purchase Plan
The Bank of Nova Scotia Shareholder Dividend and Share Purchase Plan Offering Circular Effective November 6, 2013 The description contained in this Offering Circular of the Canadian and U.S. income tax
More informationRevised Partnership Enterprise Law: An Impetus for Onshore Private Equity
Llinks Corporate Finance Bulletin November 2007 Revised Partnership Enterprise Law: An Impetus for Onshore Private Equity By Christophe Han and James Weng With the revision of the Partnership Enterprise
More informationUnited Arab Emirates
United Arab Emirates Afridi & Angell Amjad Ali Khan BASIC INFORMATION ON THE TYPES OF LIMITED LIABILITY COMPANIES AND ON THE RIGHTS OF SHAREHOLDERS 1. What types of companies enjoy limited liability? If
More informationPRC REGULATORY OVERVIEW
Our business is mainly conducted in China. The key laws and regulations regulating our business operations in China include the following: Measures on the Administration of Foreign Investment in the Leasing
More informationUnited States of America Takeover Guide
United States of America Takeover Guide Contact Richard Hall Cravath, Swaine & Moore LLP rhall@cravath.com Contents Page INTRODUCTION 1 TENDER OFFERS VERSUS MERGERS 1 IN THE BEGINNING 2 REGULATION OF TENDER
More informationIPOs for China-based companies Structures and Approaches
IPOs for China-based companies Structures and Approaches Thomas M. Shoesmith Pillsbury Winthrop Shaw Pittman LLP - Shanghai Pillsbury Winthrop Shaw Pittman LLP Agenda Everybody wants to go IPO What does
More informationProvisional Regulations on Administration of Stock Investment0020of Insurance Institutional Investors 保 险 机 构 投 资 者 股 票 投 资 管 理 暂 行 办 法
Provisional Regulations on Administration of Stock Investment0020of Insurance Institutional Investors 保 险 机 构 投 资 者 股 票 投 资 管 理 暂 行 办 法 Chapter 1 General Provisions Article 1 These Regulations are formulated
More informationArticles of Association of [ ] Company Limited
This Document has been issued in the Chinese language with a separate English language translation. If there is any conflict between the meaning of English words or terms in the English language version
More informationVCR PRODUCED BY THE NATIONAL VENTURE CAPITAL ASSOCIATION AND ERNST & YOUNG LLP VENTURE CAPITAL REVIEW ISSUE 18 WINTER 2007
VCR VENTURE CAPITAL REVIEW ISSUE 18 WINTER 2007 PRODUCED BY THE NATIONAL VENTURE CAPITAL ASSOCIATION AND ERNST & YOUNG LLP Private Equity Investments In China: Impact Of Recent Legal Reforms BY DAVID PATRICK
More informationOrder No. 4 of the China Insurance Regulatory Commission
PWRW&G Translation May 29, 2004 Order No. 4 of the China Insurance Regulatory Commission The Implementing Rules on the Regulations of the People's Republic of China for the Administration of Foreign-Invested
More informationCampus Recruiting. Tax. kpmgcampus.com
Campus Recruiting Tax kpmgcampus.com EVS KPMG s Economic and Valuation Services (EVS) professionals offer a wide range of advanced analytical services that help clients make forward-thinking decisions
More informationNew UAE Commercial Companies Law: Legal reforms to strengthen the legal and regulatory landscape of doing business in the UAE
from Legal Middle East New UAE Commercial Companies Law: Legal reforms to strengthen the legal and regulatory landscape of doing business in the UAE May 2015 In brief After years of speculation regarding
More informationCommon Questions About Pennsylvania Stock Options
Global Stock Options Survey Eckert Seamans Cherin & Mellott, LLC Pennsylvania, U.S.A. CONTACT INFORMATION: Paul M. Yenerall Eckert Seamans Cherin & Mellott, LLC U.S. Steel Tower 600 Grant Street, 44th
More informationSEC Grants No-Action Relief Permitting Five Business Day Debt Tender Offers
January 24, 2015 SEC Grants No-Action Relief Permitting Five Business Day Debt Tender Offers On January 23, 2015, the Staff of the Division of Corporation Finance (the Staff ) of the U.S. Securities and
More informationTHE CROATIAN PARLIAMENT DECISION PROMULGATING THE ACT ON INVESTMENT FUNDS WITH A PUBLIC OFFERING
THE CROATIAN PARLIAMENT Pursuant to Article 89 of the Constitution of the Republic of Croatia, I hereby pass the DECISION PROMULGATING THE ACT ON INVESTMENT FUNDS WITH A PUBLIC OFFERING I hereby promulgate
More informationARTICLES OF ASSOCIATION OF CRCC HIGH-TECH EQUIPMENT CORPORATION LIMITED (the Company )
ARTICLES OF ASSOCIATION OF CRCC HIGH-TECH EQUIPMENT CORPORATION LIMITED (the Company ) (a joint stock company incorporated in the People s Republic of China with limited liability) (Considered and passed
More informationo The filing and timing requirements are summarized on Exhibit A. Other Securities Law Issues
MORRISON & FOERSTER LLP CHECKPOINTS: THE CONSEQUENCES OF CROSSING VARIOUS OWNERSHIP THRESHOLDS WHEN INVESTING B. JEFFERY BELL * This memorandum outlines certain considerations associated with the acquisition
More informationChina Streamlines Foreign Exchange Administrative Procedures to Facilitate Cross-border Investments
China Streamlines Foreign Exchange Administrative Procedures to Facilitate Cross-border Investments March 2013 Further information If you would like further information on any aspect of the alert please
More informationHong Kong Expands Existing Offshore Funds Tax Exemption to Benefit Private Equity Funds
Hong Kong Expands Existing Offshore Funds Tax Exemption to Benefit Private Equity Funds By Jeremy Leifer, Partner, Proskauer Rose, Hong Kong Introduction On 17 July, 2015 Hong Kong enacted legislation
More informationTitle VII: Derivatives (Wall Street Transparency and Accountability Act of 2010)
Title VII: Derivatives (Wall Street Transparency and Accountability Act of 2010) Summary: Regulates the previously unregulated, over-the-counter (OTC) derivatives market Requires registration of swap dealers,
More informationraising capital in the united states under the multijurisdictional disclosure system
raising capital in the united states under the multijurisdictional disclosure system Torys covers the essentials of accessing and making the most of cross-border opportunities under this unique regulatory
More informationDefinition of a Public Business Entity
No. 2013-12 December 2013 Definition of a Public Business Entity An Addition to the Master Glossary An Amendment of the FASB Accounting Standards Codification The FASB Accounting Standards Codification
More informationRupiah requirement on transactions in Indonesia update
Client Update Rupiah requirement on transactions in Indonesia update Revised June 2015 On 31 March 2015, the Indonesian central bank (Bank Indonesia) issued Bank Indonesia Regulation No. 17/3/PBI/2015
More informationSTANDARD LIFE INVESTMENTS PROPERTY INCOME TRUST LIMITED
This document is issued by Standard Life Investments Property Income Trust Limited (the "Company") and is made available by Standard Life Investments (Corporate Funds) Limited (the AIFM ) solely in order
More informationLegal Updates. 6th Edition of 2015
6th Edition of 2015 Legal Updates 1. China s Business Registration System Further Reformed 2. China s SAT Releases New Tax Policies on Preferential Income Tax Treatment for M&A Transactions Legal Updates
More informationHow do the final FATCA regulations affect asset managers?
How do the final FATCA regulations affect asset managers? February 6, 2013 In brief The long-awaited final Foreign Account Tax Compliance Act (FATCA) regulations have arrived and, while much analysis still
More informationTransatlantic Management: Establishing and Managing American Israeli Companies
Transatlantic Management: Establishing and Managing American Israeli Companies Edward Best May 2007 BERLIN BRUSSELS CHARLOTTE CHICAGO COLOGNE FRANKFURT HONG KONG HOUSTON LONDON LOS ANGELES NEW YORK PALO
More informationAccounting in China. I. Legal Framework
With the founding of the PRC in 1949, all resources of production in the country came under State ownership, and basically the only form of economic entity was the state-owned enterprise (SOE). The accounting
More informationBIOSENSORS INTERNATIONAL GROUP, LTD. (Incorporated in Bermuda with limited liability) (Company Registration Number: EC 24983)
BIOSENSORS INTERNATIONAL GROUP, LTD. (Incorporated in Bermuda with limited liability) (Company Registration Number: EC 24983) PLACEMENT OF 216,325,800 NEW ORDINARY SHARES ( PLACEMENT SHARES ) IN THE CAPITAL
More informationwww.pwc.com/ua/capital-markets
www.pwc.com/ua/capital-markets Which market? An overview of London, New York and Hong Kong stock exchanges Capital Markets The process of selecting the most appropriate exchange for your business to list
More informationSEC ADOPTS FINAL RULES TO THE INVESTMENT ADVISERS ACT OF 1940 IMPLEMENTING PROVISIONS OF THE DODD FRANK ACT
SEC ADOPTS FINAL RULES TO THE INVESTMENT ADVISERS ACT OF 1940 IMPLEMENTING PROVISIONS OF THE DODD FRANK ACT 1. INTRODUCTION On 22 June 2011, the Securities and Exchange Commission ("SEC") adopted final
More informationDESCRIPTION OF THE PLAN
DESCRIPTION OF THE PLAN PURPOSE 1. What is the purpose of the Plan? The purpose of the Plan is to provide eligible record owners of common stock of the Company with a simple and convenient means of investing
More informationCROWDFUNDING WHAT IS CROWDFUNDING?
CROWDFUNDING PBI Business Lawyers Institute 5 November 2015 G. Philip Rutledge, Partner Bybel Rutledge LLP, Lemoyne, PA 17043 rutledge@bybelrutledge.com WHAT IS CROWDFUNDING? Much over used term to describe
More informationEstablishing a Business in China. Special Report. A guide for international business 2010. www.minterellison.com MELBOURNE SHANGHAI SYDNEY ADELAIDE
Special Report Establishing a Business in China A guide for international business 2010 ADELAIDE AUCKLAND BEIJING BRISBANE CANBERRA DARWIN GOLD COAST HONG KONG LONDON MELBOURNE PERTH SHANGHAI SYDNEY WELLINGTON
More informationBUSINESS LAW SECTION
BUSINESS LAW SECTION CORPORATIONS COMMITTEE T HE STATE BAR OF CALIFORNIA 180 Howard Street San Francisco, CA 94105-1639 http://www.calbar.org/buslaw/corporations STATUTORY CLOSE CORPORATIONS LEGISLATIVE
More informationSTATEMENT OF POLICY REGARDING CORPORATE SECURITIES DEFINITIONS
STATEMENT OF POLICY REGARDING CORPORATE SECURITIES DEFINITIONS Adopted April 27, 1997; Amended September 28, 1999 & March 31, 2008 I. INTRODUCTION This Statement of Policy Regarding Definitions applies
More informationRegulatory Environment and Practice Concerning Offshore Securities Finance of QDII Funds
Llinks Asset Management Bulletin October 2008 Regulatory Environment and Practice Concerning Offshore Securities Finance of QDII Funds By Leo wang In a broad term, securities finance refers to the act
More informationInternal Code of Conduct on Matters Relating to the Stock Market and Policy on the Use of Relevant Information
Internal Code of Conduct on Matters Relating to the Stock Market and Policy on the Use of Relevant Information 1. Objective This "Internal Code of Conduct on Matters Relating to the Stock Market and Policy
More informationSUMMARY OF ARTICLES OF ASSOCIATION
Set out below is a summary of the Articles of Association, the principal objective of which is to provide potential investors with an overview of the Articles of Association. As this appendix is a summary,
More information