JC Master Legal News Issue 1154

Key Takeaways for This Issue

The China Securities Regulatory Commission has revised the format guidelines for annual and semi-annual reports, refining the disclosure of key financial indicators.
The China Securities Regulatory Commission has issued “Guideline No. 2 on the Content and Format of Information Disclosure by Companies Issuing Securities to the Public—Content and Format of Annual Reports” and “Guideline No. 3 on the Content and Format of Information Disclosure by Companies Issuing Securities to the Public—Content and Format of Semi-Annual Reports,” both of which will take effect on July 1, 2025.
The China Securities Regulatory Commission has revised the information disclosure rules for listed companies, adding regulatory requirements governing the “outsourcing” of information disclosure activities.
The China Securities Regulatory Commission has issued the Measures for the Administration of Information Disclosure by Listed Companies, which will take effect on July 1, 2025.
The China Securities Regulatory Commission and the stock exchanges have jointly revised and repealed certain regulations that serve as supporting measures for the new Company Law.
The China Securities Regulatory Commission has issued the “Decision on Amending Certain Securities and Futures Regulations” and the “Decision on Amending or Repealing Certain Securities and Futures Normative Documents,” undertaking a comprehensive, package‑style revision and repeal of 88 regulations and normative documents, effective March 27, 2025.
Finance & Capital Markets
The China Securities Regulatory Commission has revised the format guidelines for annual and semi-annual reports, refining the disclosure of key financial indicators.
The China Securities Regulatory Commission has issued “Guideline No. 2 on the Content and Format of Information Disclosure by Companies Issuing Securities to the Public—Content and Format of Annual Reports” and “Guideline No. 3 on the Content and Format of Information Disclosure by Companies Issuing Securities to the Public—Content and Format of Semi-Annual Reports,” both of which will take effect on July 1, 2025.
Among these, the revised No. 2 Accounting Standard has refined the disclosure of key financial metrics. First, it has clarified the requirements for “revenue deductions” by adding a provision stipulating that, when disclosing revenue deductions related to non‑core business income and income lacking commercial substance, companies must present the details in tabular form, itemizing each deduction and providing comparative figures for the same period of the prior year. Second, it explicitly permits companies with equity incentive plans or employee stock ownership schemes to disclose net profit figures after excluding the impact of share‑based compensation. Third, it has further specified the disclosure requirements for retrospective adjustments to accounting data, adding to the existing obligation to disclose “the reasons for changes in accounting policies and corrections of accounting errors” the requirement to “simultaneously list the accounting accounts and financial data affected before and after the adjustment, along with a brief description of the adjustment process.”
The China Securities Regulatory Commission has revised the information disclosure rules for listed companies, adding regulatory requirements governing the “outsourcing” of information disclosure activities.
The China Securities Regulatory Commission has issued the Measures for the Administration of Information Disclosure by Listed Companies, which will take effect on July 1, 2025.
This revision, first, draws on recent practical experience in information‑disclosure regulation, strengthens risk‑disclosure requirements, clarifies industry‑specific operational‑information‑disclosure obligations, specifies the requirements for releasing information outside trading hours, establishes mechanisms for deferring or exempting disclosure, and mandates that listed companies issue sustainability reports in accordance with stock‑exchange rules. Second, it reinforces oversight of certain key matters by introducing additional regulatory requirements for the “outsourcing” of information‑disclosure activities by listed companies, optimizing the timing of disclosures for material events, expanding the scope of entities required to make public commitments to fulfill disclosure obligations, and adding acquirers, counterparties in asset transactions, bankruptcy‑restructuring investors, and other relevant parties as subjects of such public commitments. Third, in alignment with the new Company Law, it revises provisions related to the supervisory boards and supervisors of listed companies, including the removal of regulations pertaining to supervisors and the clarification of the audit committee’s oversight mechanisms for the preparation of periodic reports. In addition, this revision raises the maximum penalty amount to RMB 100,000.

Commercial & Corporate
The Ministry of Public Security has released five typical cases of criminal offenses involving listed companies.
Recently, the Ministry of Public Security released five typical cases involving crimes committed by listed companies. These cases involve illegal acts such as unlawful disclosure, failure to disclose material information, providing false certification documents, and breaching trust to harm the interests of listed companies.
In Case One, a certain joint-stock company in Beijing, which is a publicly listed entity, was preparing to issue convertible corporate bonds totaling RMB 2 billion between 2018 and 2019. To meet the performance requirements for bond issuance, the then-chairman, Song, along with other senior executives, engaged in financial fraud by entering into fictitious contracts to recognize revenue prematurely, fabricating cash receipts to conceal losses, and inflating goodwill. These fraudulent practices were disclosed in the company’s 2018 annual report, resulting in an overstatement of goodwill by more than RMB 214 million, revenue by over RMB 467 million, assets by over RMB 648 million, and profits by over RMB 658 million. Furthermore, investigations revealed that auditors Zhu Jun and Liu Jun, despite identifying obvious irregularities during the audit of the aforementioned annual report, nevertheless instructed the listed company to execute fictitious contracts and destroyed conofficeation letters to cover up the contractual fraud, thereby allegedly committing the crime of providing false certification documents. The court convicted Song and others of the crime of illegally disclosing or failing to disclose material information; in November, it also convicted Zhu Jun and Liu Jun of the crime of providing false certification.

The State Council has issued a document to strengthen the long-term regulatory mechanism for enterprise-related fees, while the State Administration for Market Regulation has revised the regulations governing inspections of enterprises.
Recently, the Chinese Government Website published the “Guiding Opinions of the General Office of the State Council on Establishing and Improving a Long-Term Regulatory Mechanism for Enterprise‑Related Fees.” In addition, the State Administration for Market Regulation issued Order No. 101, “Decision of the State Administration for Market Regulation on Abolishing and Amending Certain Departmental Regulations,” which abolishes one regulation and amends 16 others, strengthens requirements related to enterprise inspections, clarifies relevant licensing and approval authorities, and adjusts certain penalty provisions.
The Opinions clearly establish a catalog‑based system for enterprise‑related fees, emphasize the need to strengthen the assessment and review of new fee policies, and prohibit the unauthorized introduction of new fee items. They also stipulate that no new intermediary services may be added in violation of regulations, nor may government‑provided services be reclassified as intermediary services. For commissioned services that fall within the purview of government administration, the associated costs shall be borne by the administrative approval authorities and may not be passed on to enterprises. Furthermore, unreasonable market access restrictions on intermediary services must be eliminated.
The Decision revises the Interim Measures for Random Inspections of Enterprise Public Information, stipulating that “market supervision and administration departments at all levels shall strengthen the coordinated planning of inspections to effectively prevent arbitrary, overlapping, and redundant inspections”; it also revises the Implementing Measures for the Regulations of the People’s Republic of China on the Administration of Industrial Product Production Licenses, clarifying that the approval authorities related to industrial product production licenses under the jurisdiction of provincial market supervision and administration departments may not be delegated, among other provisions.

A national first! Jiangsu Province has introduced a special policy at the provincial level to foster and strengthen data‑related enterprises.
The Jiangsu Provincial Data Bureau, together with 11 other departments, has jointly issued the “Jiangsu Province Action Plan for Fostering and Strengthening Data Enterprises (2025–2027),” which sets a target to attract and cultivate 1,000 large-scale data enterprises across the province by 2027.
The Plan supports traditional third-party institutions in expanding their data‑services offerings. It encourages these service providers to engage in activities such as data consulting, data insurance, compliance certification, security auditing, asset valuation, and risk assessment, thereby fostering new business models for data circulation and trading. Furthermore, it calls for legal, accounting, auditing, and asset‑valuation offices to align with the needs of data assetization and enhance their professional service capabilities.
The Plan calls for intensifying efforts to attract data‑related enterprises. It focuses on cutting‑edge areas such as advanced storage, large‑scale models, and intelligent algorithms to draw a cohort of industry‑leading data‑technology offices; accelerates the recruitment of data‑application companies specializing in niche sectors like smart manufacturing, new energy, and greater health; and, in light of the needs of digital networks and data‑space development, seeks to attract leading players in the data‑infrastructure space.

The State Administration for Market Regulation has issued the “Regulations on the Supervision and Administration of Food Production and Operation Enterprises’ Fulfillment of Their Principal Responsibility for Food Safety.”
Recently, the State Administration for Market Regulation revised the “Regulations on the Supervision and Administration of Enterprises’ Fulfillment of Their Principal Responsibility for Food Safety,” resulting in the “Regulations on the Supervision and Administration of Food Production and Operation Enterprises’ Fulfillment of Their Principal Responsibility for Food Safety,” which will take effect on April 15, 2025.
The revised Regulations explicitly apply to food production and operation enterprises and their relevant personnel, requiring enterprises to immediately suspend related activities and report upon identifying potential risks of food safety incidents. At the same time, the “daily control, weekly inspection, monthly coordination” system has been streamlined to prevent redundant efforts. The new rules further clarify the responsibilities of food safety management personnel, stipulating that the chief food safety officer must be a member of senior management and mandating no less than 40 hours of annual training. In addition, entities that are not directly involved in production or operation—such as food storage facilities and online trading platforms—are required to comply by analogy.

The State Administration for Market Regulation has issued the Interim Measures for the Management of Compliance Data Reporting in Online Transactions.
On April 2, the website of the State Administration for Market Regulation published the “Notice on Issuing the Provisional Measures for the Management of Compliance Data Reporting in Online Transactions.”
The Measures consist of twenty-one articles and primarily set forth the scope, deadlines, and hierarchical levels for submitting compliance data on online transactions, as well as provisions governing the use and management of such data. Specifically, identity information of online transaction operators shall be reported to the provincial market regulation authority at the platform’s place of domicile in January and July each year; leads regarding illegal activities shall be reported to the county-level or higher market regulation authority at the platform’s place of domicile within five working days from the date the platform renders its relevant decision; administrative enforcement assistance‑related data shall be submitted in accordance with the requirements of the Interim Measures on Administrative Enforcement Assistance in Online Transactions; and transaction data pertaining to specific goods or services shall be reported as prescribed by the State Administration for Market Regulation and by provincial market regulation authorities authorized by it. Market regulation authorities at all levels may, in accordance with the law, utilize online transaction compliance data for regulatory enforcement and comprehensive big‑data analysis, and may require platform operators to correct or supplement such data.

Five departments have clarified the requirements for the list of integrated circuit and software enterprises eligible for tax preferential policies in 2025.
The “Notice of the National Development and Reform Commission and Other Departments on Carrying Out the Preparation of the 2025 List of Integrated Circuit Enterprises or Projects and Software Enterprises Eligible for Tax Preferential Policies” was publicly released on April 1.
The “list” referred to in the Notice denotes the relevant lists specified in the State Council’s Notice on Issuing Several Policies for Promoting the High-Quality Development of the Integrated Circuit and Software Industries in the New Era, as well as in Cai Guan Shui [2021] No. 4 and Cai Guan Shui [2021] No. 5.
The Notice states that enterprises already included on the list for 2024, if they wish to continue benefiting from the new year’s tax preferential policies (excluding the installment‑payment policy for import‑stage value‑added tax), must reapply in 2025. Enterprises seeking inclusion on the list shall submit their applications through the information‑filing system between March 31 and April 18, 2025, and prepare a hard copy of the application stamped with the enterprise’s official seal, which, together with the required supporting documents, must be submitted to the competent authority. Upon being listed, such enterprises may independently determine whether they meet the eligibility criteria when filing their provisional corporate income tax returns for the following year. If eligible, they may apply the preferential treatment in advance during the provisional filing; at the annual final settlement, should they not be retained on the list for the subsequent year, they shall remit any outstanding taxes as prescribed, without incurring late‑payment penalties in accordance with the law.

The China Securities Regulatory Commission and the stock exchanges have jointly revised and repealed certain regulations that serve as supporting measures for the new Company Law.
The China Securities Regulatory Commission has issued the “Decision on Amending Certain Securities and Futures Regulations” and the “Decision on Amending or Repealing Certain Securities and Futures Normative Documents,” undertaking a comprehensive, package‑style revision and repeal of 88 regulations and normative documents, effective March 27, 2025.
The main contents of this round of centralized amendments and repeals are as follows: In line with the new Company Law and the relevant provisions of the State Council’s Regulations on the Implementation of the Registered Capital Registration System under the Company Law of the People’s Republic of China, provisions pertaining to the supervisory boards and supervisors of listed companies have been deleted, while it has been clarified that non‑listed public companies, fund management companies, and other entities may, in accordance with the law, designate an audit committee or a supervisory board as their internal oversight body.
In addition, the CSRC has concurrently issued the revised “Guidelines on Articles of Association of Listed Companies” and “Rules of Procedure for Shareholders’ Meetings of Listed Companies,” which will take effect as of March 28, 2025.

The China Securities Regulatory Commission convened a plenary meeting of the interdepartmental coordination mechanism for the filing and administration of overseas listings.
Recently, the China Securities Regulatory Commission convened a plenary meeting of the inter‑departmental coordination mechanism for the filing and administration of overseas listings, summarizing the mechanism’s operational achievements and lessons learned, analyzing the current landscape facing overseas listings, and deliberating on and deploying measures to further optimize and refine the mechanism in the next phase.
The meeting noted that, in the next phase, efforts will continue to balance development with security and regulation with vitality; strengthen the summarization and evaluation of experience in operating coordination mechanisms; refine institutional frameworks; streamline work processes; and further enhance policy alignment, regulatory coordination, and information sharing across departments. This will better leverage the role of coordination mechanisms, providing a more transparent, efficient, and predictable regulatory environment for companies seeking overseas listings, while intensifying efforts to use openness to drive reform and development. Additionally, work will proceed to ensure the effective implementation of the “Five Measures to Benefit Hong Kong” for the capital market, supporting Hong Kong in consolidating and enhancing its status as an international financial center.

The CPC Central Committee and the State Council have announced that, once listed on the List of Seriously Dishonest Entities, individuals and entities will face restrictions or prohibitions on accessing tax incentives and other preferential policies.
The “Opinions of the General Office of the CPC Central Committee and the General Office of the State Council on Improving the Social Credit System” were publicly released on March 31, outlining seven key areas.
The Opinions emphasize that sanctions against untrustworthy entities must be implemented in accordance with the law and relevant regulations. The design of such sanctions should be standardized, with the scope and severity of penalties determined reasonably and in compliance with legal requirements. Competent industry authorities shall, through departmental rules, clearly specify the criteria and procedures for inclusion on and removal from the list of seriously untrustworthy entities. Entities listed as seriously untrustworthy shall, in accordance with the law and relevant regulations, face restrictions or prohibitions when applying for government funding, accessing tax incentives, or issuing stocks and bonds. Furthermore, additional lists of seriously untrustworthy entities will be established in sectors including the real estate market, the internet, the human resources market, and the medium- to long-term energy contract field.

Taxation
The Law on the Administration of Tax Collection Has Undergone a Major Revision: Late Payment Penalties Have Been Renamed “Late Payment Interest on Taxes,” and Tax Evasion Has Been Reclassified as “Tax Fraud.”
The State Taxation Administration and the Ministry of Finance have launched a public consultation on the “Draft Amendment to the Law of the People’s Republic of China on the Administration of Tax Collection,” with a deadline for submissions set for April 27, 2025.
The Draft for Soliciting Opinions comprises 106 articles, maintaining the basic structure of the current Tax Collection and Administration Law while adding 16 new articles, deleting 4, and revising 69. The revisions focus primarily on general provisions, tax administration, tax collection, tax inspections, and legal liabilities. In the area of tax administration, it clarifies that the state implements a taxpayer identification number system and a real-name tax‑filing regime, and introduces provisions on the comprehensive digitalization of electronic invoicing and tax supervision in the platform economy. Regarding tax collection, the scope of application for related‑party transactions has been expanded from inter‑enterprise relationships to include transactions between enterprises and individuals, as well as between individuals; it also adds general anti‑avoidance rules and reclassifies the term “late payment penalty” in the Tax Collection and Administration Law as “tax late‑payment interest.” With respect to legal liability, new provisions establish accountability for certain violations; the term “tax evasion” is replaced with “tax avoidance,” with specific examples of false tax returns and failure to file listed; and the maximum penalties for offenses such as issuing false invoices and damaging tax control devices have been increased.

State Taxation Administration: Will Issue the “Guidance on Tax Services Throughout the Entire Lifecycle of Key Foreign-Invested Projects”
On April 1, the State Taxation Administration publicly released the “Opinions of the State Taxation Administration on Launching the 2025 ‘Spring Breeze Action for Convenient Tax Services,’” outlining nine specific measures across four key areas.
The “Opinions” state that industry-specific tax policies and risk‑alert services will be provided to large enterprises to help them better apply tax regulations and operate in compliance. A “Guidance on Tax Services Throughout the Entire Lifecycle of Key Foreign‑Invested Projects” has been issued to further refine the tax‑service framework for foreign investment. Efforts to restore the credit standing of entities with serious tax violations or breaches of trust have been strengthened: taxpayers who, within three days of the statutory deadline, rectify failures to file tax returns, pay taxes, or submit supporting documentation may have the corresponding tax‑credit rating scores restored at a 100% bonus rate. In addition, mechanisms for incentivizing and constraining tax‑related professional services have been improved, with increased enforcement against illegal and non‑compliant conduct by such service providers and greater public disclosure of high‑profile cases to serve as warnings, thereby guiding compliant practice.

Five departments have clarified the requirements for the list of integrated circuit and software enterprises eligible for tax preferential policies in 2025.
The “Notice of the National Development and Reform Commission and Other Departments on Carrying Out the Preparation of the 2025 List of Integrated Circuit Enterprises or Projects and Software Enterprises Eligible for Tax Preferential Policies” was publicly released on April 1.
The “list” referred to in the Notice denotes the relevant lists specified in the State Council’s Notice on Issuing Several Policies for Promoting the High-Quality Development of the Integrated Circuit and Software Industries in the New Era, as well as in Cai Guan Shui [2021] No. 4 and Cai Guan Shui [2021] No. 5.
The Notice states that enterprises already included on the list for 2024, if they wish to continue benefiting from the new year’s tax preferential policies (excluding the installment‑payment policy for import‑stage value‑added tax), must reapply in 2025. Enterprises seeking inclusion on the list shall submit their applications through the information‑filing system between March 31 and April 18, 2025, and prepare a hard copy of the application stamped with the enterprise’s official seal, which, together with the required supporting documents, must be submitted to the competent authority. Upon being listed, such enterprises may independently determine whether they meet the eligibility criteria when filing their provisional corporate income tax returns for the following year. If eligible, they may apply the preferential treatment in advance during the provisional filing; at the annual final settlement, should they not be retained on the list for the subsequent year, they shall remit any outstanding taxes as prescribed, without incurring late‑payment penalties in accordance with the law.

Litigation & Arbitration
Two departments have jointly issued regulations to strengthen the referral of criminal cases involving the banking and insurance sectors.
Recently, the website of the National Administration of Financial Regulation published the “Regulations on Strengthening the Transfer of Cases Involving Suspected Criminal Activities in the Banking and Insurance Sectors.”
The Regulations comprise six chapters and 36 articles, aiming to standardize the referral mechanism for suspected criminal cases in the banking and insurance sectors. Financial regulatory authorities are responsible for referring suspected criminal cases to public security organs and for handling cases that do not warrant criminal prosecution but require administrative penalties. Public security organs, in turn, are tasked with accepting and reviewing referred cases and, where the conditions for initiating a case are met, legally filing a case and launching an investigation. The Regulations mandate enhanced cooperation between the two agencies, establishing mechanisms for information sharing, coordinated case handling, and oversight and management, thereby improving the efficiency and effectiveness of efforts to combat financial crime.

The Ministry of Justice has launched the “Notarization Standardization and Quality” campaign.
On April 1, the Ministry of Justice website published the “Notice on Launching the ‘Notarization Standardization and Quality Enhancement’ Campaign.”
The Notice sets forth 14 key tasks across four areas, calling for the optimization of notarization service delivery, the promotion of “inter‑provincial one‑stop” notarization services to enhance efficiency, and the expansion of notarization practice into new fields, including participation in judicial support activities and dispute resolution. It also emphasizes strengthening professional oversight and standardizing notarization procedures. The initiative further underscores preferential services for vulnerable groups such as the elderly and persons with disabilities, while advancing Party building within the notary sector and enhancing training for practitioners.

The Supreme People’s Court has released four typical cases of “agricultural input counterfeiting,” imposing severe penalties on “deceptive fraud rings” and “illegal online retailers.”
On March 31, the Supreme People’s Court website released a batch of typical cases involving the crackdown on counterfeit agricultural inputs, covering three key categories—seeds, pesticides, and fertilizers—and highlighting such criminal schemes as sales through online e‑commerce platforms and the use of “agricultural input fraud rings” that canvass villages.
The case illustrates criminal schemes such as selling substandard pesticides through online e‑commerce platforms and passing off nitrogen fertilizer as compound fertilizer, perpetrated by “agricultural‑input fraud rings.” The principal offenders, including Zhang and Si, were sentenced to severe penalties and hefty fines, underscoring the need for farmers to purchase agricultural inputs through legitimate channels and to carefully identify counterfeit products.

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