JC Master Legal News Issue 934

Key Takeaways for This Issue

The China Securities Regulatory Commission is soliciting public comments on the “Measures for Ordering the Repurchase of Shares Issued in Violation of Laws and Regulations (Trial) (Draft for Comments).”

To implement the provisions of Article 24 of the Securities Law of the People’s Republic of China (hereinafter referred to as the “Securities Law”) concerning orders for share repurchases, protect the legitimate rights and interests of investors, increase the costs of unlawful conduct, and uphold the order of the securities market, the China Securities Regulatory Commission, after thorough research and consultation with all relevant parties, has drafted the “Measures for the Implementation of Orders for Share Repurchases in Cases of Fraudulent Issuance and Listing (Trial) (Draft for Public Comment)” (hereinafter referred to as the “Implementation Measures”).

The China Securities Regulatory Commission has issued “Regulatory Guidance No. 6 for Non-Listed Public Companies: Regulatory Requirements for Equity Incentive and Employee Stock Ownership Plans (Trial).”

To deepen the reform of the New Third Board, support and encourage innovation and development in the private sector and among small and medium-sized enterprises, standardize the implementation of equity incentive and employee stock ownership plans by listed companies, and further enhance the New Third Board’s role in serving the real economy, the China Securities Regulatory Commission has issued the “Regulatory Guidance No. 6 for Non-Listed Public Companies—Regulatory Requirements for Equity Incentives and Employee Stock Ownership Plans (Trial)” (hereinafter referred to as the “Regulatory Guidance”), which shall take effect from the date of its promulgation.

The State Taxation Administration has released five typical cases of cracking down on illegal “three‑fake” activities.

To safeguard the economic and tax order, and in accordance with the law, authorities have been rigorously cracking down on “fake enterprises” that engage in no actual business operations but issue fictitious invoices; “fake exports” that conduct no real export activities yet seek to fraudulently obtain tax refunds; and “fake declarations” by entities that lack the requisite conditions yet attempt to illicitly claim pandemic‑related tax incentives. Following directives from the State Taxation Administration, tax authorities across the country have coordinated with public security organs to intensify investigations into enterprises and individuals suspected of serious tax‑related violations. Recently, a series of landmark cases involving these three types of fraudulent practices have been successfully solved, delivering a strong deterrent effect.

The Supreme People’s Court has issued the “Several Opinions on Providing Judicial Safeguards for the Reform of the ChiNext Board and the Pilot Registration System.”

On August 18, 2020, the Supreme People’s Court issued the “Several Opinions on Providing Judicial Safeguards for the Reform of the ChiNext Board and the Pilot Registration System” (Fa Fa [2020] No. 28, hereinafter referred to as the “Opinions”). Following its earlier issuance of judicial safeguards for the establishment of the STAR Market and the pilot registration‑based reform, the “Opinions” represent another systematic and comprehensive judicial document specifically formulated by the Supreme People’s Court to support foundational institutional reforms in the capital market. The “Opinions” are of great significance in fully leveraging the adjudicative functions of the people’s courts, ensuring the smooth implementation of the ChiNext reform and the pilot registration system, and protecting the legitimate rights and interests of investors.