JC Master Legal News Issue 1141

Release Date:

2024-12-30 13:32

Key Takeaways for This Issue

The regulatory provisions proposed for “package” amendment or repeal in this round are all being adapted to align with the new Company Law, the Implementing Regulations, and other relevant laws; no substantive changes are involved. The main contents include: First, in light of the new Company Law and the Implementing Regulations—specifically, the requirements that listed companies establish audit committees and may choose not to establish supervisory boards—the provisions pertaining to supervisory boards and supervisors in rules such as the Measures for the Registration Administration of Securities Issuance by Listed Companies have been deleted. At the same time, the Measures for the Supervision and Administration of Non‑Listed Public Companies and the Guidelines on Corporate Governance of Securities Offices explicitly stipulate that non‑listed public companies and securities offices shall, in accordance with the law, designate either an audit committee or a supervisory board as their internal oversight body. Second, relevant corporate governance provisions in rules such as the Guidelines on Corporate Governance of Listed Companies and the Measures for the Administration of Equity Incentives for Listed Companies have been supplemented and adjusted to ensure consistency with the new Company Law. Third, the provisions concerning independent directors in rules such as the Measures for the Administration of Takeovers of Listed Companies have been revised to implement the requirements of the reform of the independent director system for listed companies. Fourth, textual adjustments have been made, including changing “shareholders’ general meeting” to “shareholders’ meeting” and revising the numbering of cited articles of the Company Law. Fifth, in view of the fact that the Regulatory Guidance No. 1 for Listed Companies—“Regulatory Requirements for Situations Where Listed Companies Have Uncompensated Losses After Implementing Major Asset Restructuring”—and the Notice on Further Implementing Matters Related to Cash Dividends of Listed Companies conflict with the new Company Law or have already been superseded by newer regulations, it is proposed to repeal these two documents.

To ensure the steady and orderly advancement of adjustments to the internal oversight bodies of companies planning an IPO, listed companies, and securities, fund, and futures operating institutions, the China Securities Regulatory Commission has revised and formulated rules, including the “Guidelines on Articles of Association for Listed Companies (Draft for Public Comment),” which provide detailed provisions on the duties and composition of audit committees. At the same time, transitional arrangements have been put in place, granting relevant entities approximately one year to complete the restructuring of their internal oversight bodies. Following the entry into force of these rules, listed companies and securities, fund, and futures operating institutions may, based on their specific circumstances, complete the necessary adjustments by January 1, 2026.

On Transitional Arrangements for the Implementation of Supporting Systems and Rules under the New Company Law
On July 1, 2024, the new Company Law and the Regulations of the State Council on the Implementation of the Registered Capital Registration System under the Company Law of the People’s Republic of China (hereinafter referred to as the “Implementation Regulations”) officially came into force. To ensure the steady and orderly implementation of the new Company Law and the Implementation Regulations, the following transitional arrangements are hereby announced with respect to internal oversight body adjustments for enterprises applying for an initial public offering and listing, enterprises applying for a public offering of shares and listing on the Beijing Stock Exchange (hereinafter collectively referred to as “applicants for an IPO”), listed companies, and securities, fund, and futures operating institutions:
I. Transitional Arrangements for Enterprises Applying for an Initial Public Offering
(1) Effective January 1, 2026, enterprises applying for an initial public offering that still maintain a supervisory board or supervisors shall formulate a plan to adjust their internal oversight structure, ensuring that, prior to listing and in accordance with the Company Law and its Implementing Regulations, their articles of association provide for the establishment of an audit committee within the board of directors, which shall exercise the functions and powers of the supervisory board as prescribed by the Company Law, while abolishing the supervisory board or the position of supervisor.
If a company completes the restructuring of its internal oversight bodies prior to its public listing, the audit committee shall assume the functions and powers of the supervisory board and, in accordance with applicable regulations, review the application documents for issuance and listing and issue a revised written opinion. Intermediary institutions shall, as required, verify the qualifications and performance of the audit committee members and provide clear opinions on the completion of the restructuring, as well as on the compliance of internal controls before and after the adjustment and the effectiveness of the corporate governance structure. The applicant enterprise shall, at the time of its most recent update to the prospectus, revise the relevant content in sections such as “Basic Information of the Issuer.”
(2) For companies applying for an initial public offering, if their articles of association, in accordance with the Company Law and the Implementing Provisions, provide for the establishment of an audit committee within the board of directors and either the absence of a supervisory board or supervisors, the provisions of the issuance and listing rules pertaining to the supervisory board and supervisors shall no longer apply. However, any supervisory board that was established during the reporting period or any supervisors who were appointed during that period shall continue to bear the corresponding responsibilities for the application documents they previously signed off on. The requirements for information disclosure and verification shall remain subject to the relevant provisions of the issuance and listing rules concerning the supervisory board and supervisors, and intermediary institutions shall conduct due diligence and issue clear opinions.
II. Transitional Arrangements for Listed Companies
By January 1, 2026, listed companies shall, in accordance with the Company Law, the Implementing Provisions, and the relevant supporting regulatory rules of the China Securities Regulatory Commission, provide in their articles of association for the establishment of an audit committee within the board of directors, which shall exercise the functions and powers of the supervisory board as prescribed by the Company Law, and shall not establish a supervisory board or appoint supervisors. Prior to adjusting their internal oversight structure, listed companies shall ensure that the supervisory board or supervisors continue to comply with the existing regulatory provisions governing the supervisory board or supervisors under the CSRC’s prior rules.
For listed companies that apply for refinancing or issue securities to acquire assets before January 1, 2026, the following principles shall apply:
(1) For applications submitted before the adjustment of the company’s internal supervisory bodies has been completed, the relevant rules in effect prior to the amendment shall apply.
(2) Where the adjustment of the company’s internal supervisory body has been completed at the time of filing, the amended relevant rules shall apply.
(3) If the adjustment of the company’s internal oversight body is completed during the review period, the Audit Committee shall re-examine the application documents in accordance with the relevant provisions and issue a written opinion, after which the revised applicable rules shall be applied.
(4) For listed companies that have established a supervisory board or appointed supervisors during the reporting period and are applying for refinancing or issuing securities to acquire assets, such supervisory boards or supervisors shall continue to bear the corresponding responsibilities for the application documents they previously signed off on, and the verification requirements shall remain subject to the relevant rules in force prior to the amendment. Intermediary institutions shall conduct their reviews in accordance with those pre‑amendment rules and issue clear opinions.
III. Transitional Arrangements for Securities, Fund, and Futures Operating Institutions
(1) Where a securities, fund, or futures business entity has both an audit committee and a board of supervisors or supervisors, it shall, by January 1, 2026, clearly specify in its articles of association whether it will designate the board of supervisors or its supervisors, or the audit committee, as its internal oversight body. If the audit committee is designated as the internal oversight body, it shall exercise the powers and functions of the board of supervisors as prescribed by the Company Law, and no separate board of supervisors or supervisors shall be established. If the board of supervisors or supervisors is designated as the internal oversight body, no audit committee shall be established.
(2) Securities companies that engage in two or more of the following businesses—securities brokerage, securities asset management, margin trading and securities lending, and underwriting and sponsorship—shall, in accordance with the Regulations on the Supervision and Administration of Securities Companies, establish an audit committee within their board of directors. Furthermore, by January 1, 2026, they shall exercise the functions and powers of a supervisory board as prescribed by the Company Law, and shall not establish a supervisory board or appoint supervisors.
(3) Securities, fund, and futures operating institutions that are listed companies or state-owned enterprises shall, at the same time, comply with the internal oversight body‑establishment requirements applicable to such entities.

The China Securities Regulatory Commission is soliciting public comments on the draft revisions to the Measures for the Administration of Information Disclosure by Listed Companies, as well as the format guidelines for annual and semi-annual reports of listed companies.
To improve the information disclosure system for listed companies, refine disclosure content, and enhance the relevance and effectiveness of disclosures, the China Securities Regulatory Commission plans to revise the Measures for the Administration of Information Disclosure by Listed Companies, Guidelines on the Content and Format of Annual Reports—No. 2 for Companies Issuing Securities Publicly, and Guidelines on the Content and Format of Semi‑Annual Reports—No. 3 for Companies Issuing Securities Publicly. Public comments are now being solicited.
This revision: first, implements the requirements for robust regulation and risk prevention by strengthening disclosure obligations regarding key areas such as customers and suppliers, corporate governance, and the use of raised funds; second, optimizes the structure and content of periodic reports by reducing redundant information and highlighting priority matters; third, supplements provisions on sustainability‑related disclosure and on exemptions and deferrals from disclosure requirements; fourth, makes adjustments and refinements to certain sections in light of the latest laws, regulations, and regulatory practices; and fifth, aligns with the newly revised Company Law by revising the duties of supervisors and the supervisory board, as well as related wording pertaining to the shareholders’ meeting.

The China Securities Regulatory Commission is soliciting public comments on the “Administrative Provisions on the Temporary Suspension and Exemption of Information Disclosure by Listed Companies.”
To further strengthen oversight of the suspension and exemption of information disclosure, balance the principle of transparency with confidentiality requirements, enhance the systematic and comprehensive nature of the relevant rules, and safeguard the legitimate rights and interests of investors, the China Securities Regulatory Commission has formulated the “Administrative Provisions on the Suspension and Exemption of Information Disclosure by Listed Companies” (hereinafter referred to as the “Administrative Provisions”), which are now being made public for public comment.
The “Administrative Provisions” draw on and build upon existing regulatory rules governing the suspension or exemption of disclosure, while incorporating market feedback to enhance and refine these provisions. The key elements include: First, clarifying the modalities of exemption and upholding the principle of disclosure. Specifically, it delineates three forms of suspension or exemption: suspending the disclosure of interim reports; exempting the disclosure of interim reports; and exempting the disclosure of certain content in periodic reports or interim reports. At the same time, it mandates a prudent determination of the scope of matters eligible for suspension or exemption. Second, specifying the categories of exemptible matters to facilitate practical implementation. These are divided into two broad categories: information constituting state secrets or other information whose public disclosure might contravene national confidentiality requirements, and commercial secrets or confidential business information. Third, strengthening internal controls and reinforcing corporate accountability. Listed companies are required to establish exemption policies, define clear internal review procedures, and implement registration-based management. Fourth, bolstering external oversight to guard against the risk of abuse. It also sets out the corresponding legal liabilities for violations of these provisions.

The China Securities Regulatory Commission has issued five financial industry standards, including the “Elements of a Futures Brokerage Contract.”
Recently, the China Securities Regulatory Commission issued five financial industry standards—“Elements of a Futures Brokerage Contract,” “Specification for Backup Capabilities of Information Systems in the Securities and Futures Industry,” “Data Model for the Securities and Futures Industry—Part 5: Logical Model for Futures Companies,” “Technical Specification for Distributed Digital Identity in Regional Equity Markets,” and “Coding Specification for Enterprises, Products, and Investors in Regional Equity Markets”—which shall take effect from the date of their publication.
The financial industry standard “Elements of a Futures Brokerage Contract” was first issued in 2013. This revised edition, building on the 2013 version, clarifies and standardizes key provisions related to risk management, including the allocation of responsibility for trading outcomes when futures companies execute client orders, the secure custody of client margin funds, trading instruction procedures, notification requirements, margin call and forced liquidation measures, as well as delivery-related matters. The promulgation and implementation of this standard provide guidance for futures companies in drafting standardized, uniform brokerage contracts, thereby helping to safeguard investors’ legitimate rights and interests.
The “Specification for Backup Capabilities of Information Systems in the Securities and Futures Industry,” a financial industry standard, establishes a framework for building backup capabilities in securities and futures institutions. It specifies quantitative requirements for four types of backup capabilities—data backup, fault‑response, disaster‑response, and major‑disaster‑response—and provides industry best practices. The development and implementation of this standard will help securities and futures offices mitigate cybersecurity risks associated with information systems and enhance the industry’s disaster‑recovery capabilities.
“Data Model for the Securities and Futures Industry – Part 5: Logical Model for Futures Companies,” a financial industry standard, provides guidance on the principles and methodologies for developing logical models in futures companies. It offers detailed instructions and concrete examples regarding entity‑relationship diagrams, the English naming conventions and root‑word rules for data tables and data items, as well as business classification labels and data sensitivity labels. The formulation and implementation of this standard will help promote data standardization and centralized processing, providing securities and futures institutions with a practical and feasible framework for constructing logical models for futures companies.
The financial industry standard “Technical Specification for Distributed Digital Identity in Regional Equity Markets” defines the system architecture of a distributed digital identity system for regional equity markets, as well as the specifications for distributed digital identity identifiers and their attributes, verifiable credentials and their attributes, verifiable claims and their attributes, key business processes for distributed digital identity, and data‑exchange mechanisms based on distributed digital identity identifiers and verifiable credentials. This standard applies to regional equity markets, the enterprises and investors served by these markets, data providers, regulatory authorities, and other stakeholders involved in the development or deployment of distributed digital identity systems within regional equity markets. It facilitates cross‑domain identity authentication and trusted data exchange among market participants, thereby providing a solid foundation for building a distributed digital identity system for regional equity markets under a dual‑layer architecture comprising a “regulatory chain–business chain.”
The financial industry standard “Coding Specifications for Enterprises, Products, and Investors in Regional Equity Markets” sets forth the coding requirements and allocation rules for enterprises, products, and investors served by regional equity markets, and provides reference examples for enterprise codes, product codes, and investor codes. The development and implementation of this standard offer securities and futures institutions a unified coding framework for enterprises, products, and investors in regional equity markets. By registering, custodizing, and managing investors in accordance with this standardized coding system, enterprises, products, and investors can be subject to more rigorous oversight, thereby facilitating the alignment of investment and financing activities.

The Shanghai Stock Exchange has revised its guidelines for corporate bonds of specific categories, enhancing the quality and effectiveness of its support for national strategies.
On December 27, 2024, under the guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange revised and issued the “Shanghai Stock Exchange Guidelines on the Application of Rules for the Review of Corporate Bond Issuance and Listing, No. 2—Specialized Corporate Bonds (2024 Revision)” (hereinafter referred to as the “Guidelines on Specialized Corporate Bonds”). This revision represents an important measure by the Shanghai Stock Exchange to implement national strategies and support the real economy, helping to better channel capital toward key areas of national strategic importance and providing robust support to enterprises in sectors such as technological innovation and green development.
This revision of the “Guidelines for Special‑Purpose Corporate Bonds” has refined the financing frameworks for specialized bond categories, including science‑and‑technology bonds, green bonds, rural revitalization bonds, bonds supporting small and micro enterprises, and short‑term bonds. First, it strengthens targeted support for scientific and technological innovation, fostering the growth and development of new‑type productive forces. It introduces optimized review measures for “hard‑tech” enterprises engaged in tackling critical core technologies, appropriately broadens the scope of issuers eligible under the science‑and‑technology bond categories—covering both technology‑investment and incubation‑related entities—and refines the evaluation criteria for issuers in the science‑and‑technology bond segment. Second, it enhances the institutional adaptability and inclusiveness of green bonds and rural revitalization bonds. Specifically, it extends the period during which proceeds from green bonds may be used to replace a bond issuer’s own funds allocated to green projects to 12 months, and it permits enterprises registered in national demonstration counties for rural revitalization, as well as agriculture‑related offices, to issue rural revitalization bonds primarily to finance initiatives aligned with rural revitalization goals. Third, it increases the flexibility in the use of proceeds from bonds supporting small and micro enterprises. It expands the range of ways in which raised funds can be deployed to assist such enterprises, allowing the replacement of the issuer’s own expenditures on small and micro businesses incurred within three months prior to the bond issuance. Fourth, it addresses the working‑capital management needs of high‑quality listed companies by permitting publicly issued short‑term bonds by those whose information disclosure performance has been rated A for each of the past two years.
Going forward, the SSE will, in accordance with the CSRC’s strategic plan, uphold sound principles while fostering innovation, assume proactive responsibility, ensure the effective implementation of relevant guidelines, and strengthen policy communication and outreach. Moving ahead, the SSE will continue to refine its institutional framework for corporate bonds, facilitate the efficient use of bond financing by real‑economy enterprises, enhance the quality and effectiveness of its services to the real economy and national strategies, and promote the high‑quality development of the exchange‑traded bond market.

The Shanghai Stock Exchange has revised the Guidelines on Matters of Focus in REITs Review, aiming to promote the high-quality development of the REITs market.
On December 27, under the guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange issued the “Shanghai Stock Exchange Guidelines on the Application of Rules for Publicly Offered Infrastructure Real Estate Investment Trusts (REITs), No. 1—Matters Requiring Attention in the Review Process (Trial) (Revised in 2024)” (hereinafter referred to as the newly revised guidelines). The release of these revised guidelines represents a timely summary and refinement of REITs review practices in the infrastructure sector, helping to further improve the REITs regulatory framework, enhance the standardization, effectiveness, and relevance of REITs verification and information disclosure, encourage market participants to fulfill their respective responsibilities, effectively safeguard investors’ legitimate rights and interests, and promote the normalized issuance and high-quality development of the REITs market.
Optimize the text structure to further enhance its logical coherence and readability.
The newly revised guidelines, while refining the fundamental requirements for REITs verification and information disclosure, have also adjusted and optimized relevant content from the previous version, enhancing the logical coherence among chapters and improving the readability of the material. To facilitate access and use by market participants, the document is structured into two parts: the main text and the appendices. The main text has been reorganized into six chapters, with more detailed provisions addressing underlying assets. The appendices, taking into account the specific characteristics of mature asset‑type projects, set forth tailored verification and disclosure requirements for industrial parks, toll roads, rental housing, warehousing and logistics facilities, and consumer‑infrastructure projects.
Strengthen principal responsibility and further reinforce regulatory requirements for key matters.
The newly revised guidelines standardize key issues of broad concern to all market participants—such as due diligence and information disclosure, asset valuation, and operational management—while urging market participants to earnestly fulfill their obligations in these areas. The guidelines further clarify the准入 requirements for business participants and underlying assets, as well as the disclosure requirements for project operations and financial performance. They also guide valuation agencies to prudently determine valuation outcomes by taking into account both the market environment and the characteristics of the underlying assets, thereby effectively enhancing the quality of valuations. Moreover, the guidelines require fund managers to conduct independent verification of valuation parameters and methodologies, and they specify a tiered decision-making framework, incentive‑and‑constraint arrangements, and emergency response protocols for REITs. These measures aim to help funds achieve their objectives of aligning incentives with constraints through appropriately structured operational management fees and oversight mechanisms, thus striking an effective balance between value creation and the protection of investors’ legitimate rights and interests.
Highlight the characteristics of major asset classes and further enhance the relevance of information disclosure.
The newly revised guidelines fully take into account the characteristics of different asset classes, clearly delineate differentiated requirements for each major asset category, and enhance the specificity of due diligence and information disclosure. For industrial parks and warehousing‑logistics projects, the disclosure requirements have been further refined with respect to compliance, operational and financial conditions, and property management. For toll‑road projects, the disclosure obligations pertaining to key operating‑income metrics—such as traffic volume and toll revenues—have been clarified. For rental‑housing projects, additional due‑diligence and information‑disclosure requirements have been introduced for market‑oriented rental housing as well as for rental housing specifically designed to provide ancillary services to enterprises located in industrial parks. For consumer‑infrastructure projects, the disclosure requirements have been further specified, covering revenue, tenant composition, lease types, and rental rates.
Under the unified guidance of the China Securities Regulatory Commission, the REITs market has achieved steady progress in both quality and pace. Since the beginning of this year, the Shanghai Stock Exchange has seen 17 REITs listed. To date, the SSE REITs market comprises a total of 37 listed products, having raised approximately RMB 112.1 billion, with underlying assets spanning toll roads, industrial parks, warehousing and logistics, affordable rental housing, consumer‑related infrastructure, new energy, and other sectors. Moving forward, the Shanghai Stock Exchange will, in accordance with the CSRC’s strategic directives, uphold the principle of balancing regulation with development, continuously refine the REITs regulatory framework, foster a healthier market ecosystem, and promote high‑quality growth of the REITs market, thereby better supporting national strategies and the broader goals of economic and social development.

The Measures for the Administration of Compliance in Financial Institutions Have Been Officially Issued.
On December 25, the website of the National Administration of Financial Regulation published the “Administrative Measures on Compliance Management for Financial Institutions,” which will take effect on March 1, 2025.
The Measures comprise five chapters and fifty-eight articles, clearly defining the compliance management framework, the cultivation of a compliance culture, the responsibilities of the board of directors and senior management, the establishment and duties of the chief compliance officer and compliance officers, as well as the functions and division of labor of the compliance management department. The Measures stipulate that financial institutions shall appoint a chief compliance officer at their headquarters, specify the chief compliance officer’s and compliance officers’ rights to attend meetings, access information, conduct investigations, pose inquiries, and issue early warnings—along with other safeguards for the effective performance of their duties—and provide that financial institutions and their staff, particularly directors, senior management, the chief compliance officer, and compliance officers, shall be held strictly accountable for any violations of laws or regulations arising from their failure to implement compliance management effectively.

The National Administration of Financial Regulation is slated to issue the Measures for the Administration of Qualifications for Directors and Senior Management of Banking Financial Institutions.
On December 26, the website of the National Administration of Financial Regulation published an announcement soliciting public comments on the “Measures for the Administration of Qualifications for Directors (Board Members) and Senior Management Personnel of Banking Financial Institutions (Draft for Public Comment).” The deadline for submitting feedback is January 26, 2025.
The Measures refine the requirements for the qualifications of senior management personnel, strengthen scrutiny and oversight of candidates’ compliance and integrity, impose restrictions on appointment based on the type of administrative penalty imposed, and further reinforce financial institutions’ primary responsibility for managing the suitability of their senior executives.

Commercial & Corporate
The National Intellectual Property Administration has issued guidelines to promote the implementation of the system for citing and joining.
On December 24, the website of the National Intellectual Property Administration published the “Guidelines on the Application of Incorporation by Reference to Patent Applications for Inventions or Utility Models.”
Following the amendment of the Implementing Rules of the Patent Law, a new “reference‑inclusion” system has been introduced, and the accompanying revised Patent Examination Guidelines provide further detailed regulations for this system. The system offers remedies in cases where, at the time of filing, the claims or the description are missing or have been submitted incorrectly, or where certain parts of the claims or the description are incomplete or erroneous. The Guidelines primarily guide innovation entities to accurately understand and appropriately apply the reference‑inclusion system by outlining its background, procedural steps, and relevant case examples.

The National Intellectual Property Administration plans to amend the Regulations on the Protection of Integrated Circuit Layout Designs.
On December 26, the website of the National Intellectual Property Administration published the “Notice on Soliciting Public Comments on the Draft Amendment to the Regulations on the Protection of Integrated Circuit Layout Designs (Draft for Public Comment),” with a deadline for submitting feedback set for February 9, 2025.
The Draft proposes to refine the agency system, clarify requirements for compulsory representation, and specify provisions governing requests to extend prescribed time limits as well as procedures for restoring rights in cases of delay in meeting statutory or prescribed deadlines. It also seeks to improve regulations concerning the filing date by establishing methods for determining such a date and stipulating that exclusive rights take effect from the filing date. The draft further clarifies requirements for submitting copies or drawings, enhances provisions related to rejection and revocation, introduces new mechanisms for declaring originality and rules for defining the scope of protection for exclusive rights, afoffices the principles of good faith and the prohibition of abuse of rights, expands the modalities for joint holders of exclusive rights to exercise their rights, increases the severity of damages awarded for infringement, strengthens provisions on evidence preservation, adds incentive measures for official works, delineates the responsibilities of intellectual property authorities to enhance public services and promote the implementation and utilization of IP, and refines regulations on the transfer, licensing, and pledging of exclusive rights, while also improving provisions governing non‑voluntary licensing.

The Ministry of Industry and Information Technology has approved 486 industry standards, including “Technical Requirements and Test Methods for Satellite Positioning Capabilities of Mobile Smart Terminals.”
On December 25, the Ministry of Industry and Information Technology issued Announcement No. 39 of 2024, approving 486 industry standards, including “Technical Requirements and Test Methods for Satellite Positioning Capabilities of Mobile Smart Terminals,” as well as one amendment to a telecommunications industry standard, “Guideline for Identifying Critical Data in the Telecommunications Sector,” and the foreign-language versions of two textile industry standards, such as “Cashmere Knitted Yarn.”
This batch of newly issued industry standards comprises 7 standards for the chemical industry, 72 for the ferrous metallurgy industry, 9 for the nonferrous metals industry, 31 for the building materials industry, 9 for the aviation industry, 38 for the light industry, 42 for the textile industry, 5 for the defense‑related civilian products industry, 13 for the electronics industry, and 260 for the telecommunications industry.

Beijing plans to issue the “Pilot Management Regulations on the Integrated Domestic and Foreign Currency Funds Pool Business for Multinational Corporations.”
On December 25, 2024, the Beijing Municipal Government website published the “Notice on Soliciting Public Comments on the ‘Pilot Regulations for the Integrated Domestic and Foreign Currency Funds Pool Business of Multinational Corporations (Draft for Comments)’,” with the deadline for submitting feedback set for January 8, 2025.
The Regulations permit cross-border borrowing and lending in different currencies among domestic member entities of multinational corporations for current‑account cross‑border payment transactions, streamline the filing procedures and the review of relevant documentation for foreign‑related receipts and payments, allow multinational corporations to independently determine the pooling ratios for external debt and overseas loans in accordance with macroprudential principles, and support the lead entity of a multinational corporation in using its domestic master fund account to handle centralized receipts and payments on behalf of its overseas member entities with either domestic member entities or overseas counterparties.

The Ministry of Housing and Urban–Rural Development plans to issue the national standard “Sustainability in Building and Civil Engineering: Design for Disassembly and Adaptability.”
On December 24, the website of the Ministry of Housing and Urban–Rural Development published the “Notice on Soliciting Public Comments on the National Standard ‘Sustainability in Building and Civil Engineering: Principles, Requirements, and Guidelines for Demountable and Adaptive Design (Draft for Public Comment),’” with a deadline for submitting feedback set for January 20, 2025.
The Guide outlines principles of disassemblability and adaptability, along with potential strategies for integrating these principles into the design process. It provides performance‑evaluation guidance for each disassemblability and adaptability principle and its associated objectives, applicable to all types of buildings—such as commercial, industrial, public‑facility, and residential structures—as well as civil‑engineering works—including dams, bridges, roads, railways, runways, utilities, and pipelines—and their constituent components. It can be used in new construction, renovation, and retrofitting, as well as in the phased expansion or comprehensive redesign of buildings, building systems, civil‑engineering works, and their component parts.

The Ministry of Housing and Urban–Rural Development has issued three national standards, including the “Standard Terminology for Ecological and Environmental Protection Engineering.”
Recently, the website of the Ministry of Housing and Urban–Rural Development published the “Announcement on the Release of the Partial Revision to the National Standard ‘Technical Code for Urban Utility Tunnels,’” the “Announcement on the Release of the National Standard ‘Terminology Standard for Ecological and Environmental Protection Engineering,’” and the “Announcement on the Release of the National Standard ‘Technical Standard for Fresnel‑Type Solar Thermal Power Plants.’”
Among them, the “Standard Terminology for Ecological and Environmental Protection Engineering” was developed to standardize the fundamental terms and definitions used in ecological and environmental protection engineering, promote the standardization of specialized terminology, and advance the development of related technologies. It applies to ecological and environmental protection projects involving water pollution control, air pollution control, solid waste treatment and disposal, noise, vibration, and electromagnetic environment control, ecological and environmental restoration and risk management, as well as ecological and environmental monitoring.

The Ministry of Transport has issued the “Technical Specification for the Application of Manufactured Sand in Highway Engineering.”
On December 26, the website of the Ministry of Transport published the “Announcement on the Issuance of the Technical Specification for the Application of Manufactured Sand in Highway Engineering.”
The Specification consists of nine chapters and two appendices. It is formulated to standardize the use of manufactured sand in highway engineering and ensure construction quality, and applies to the material design, construction, and quality control of manufactured-sand cement concrete and manufactured-sand asphalt mixtures for highways of all classes.

The Ministry of Transport has issued the “Technical Specification for Extended Applications of Highway Electronic Toll Collection and Vehicle–Road Coordination.”
On December 26, the website of the Ministry of Transport published the “Announcement on the Issuance of the Technical Specification for Extended Applications of Highway Electronic Toll Collection and Vehicle–Road Coordination.”
The Specification comprises eight chapters and eleven appendices, formulated to standardize and guide the construction and operation of extended vehicle–infrastructure cooperative applications for highway electronic toll collection without stopping. It applies to the deployment of such extended applications on expressways and ordinary national and provincial trunk roads, and its main contents include: 1 General Provisions; 2 Terms and Symbols; 3 Basic Requirements; 4 Extended Application Platform; 5 Roadside Intelligent Stations; 6 Vehicle–Infrastructure Communication Equipment; 7 Network Security Requirements; and 8 Testing Requirements.

The Ministry of Transport has issued the “Technical Specifications for the Highway Management System for Over‑Dimension and Over‑Weight Vehicles.”
On December 24, the website of the Ministry of Transport published the “Announcement on the Issuance of the Technical Specifications for the Highway Management System for Over‑Dimensional Vehicles.”
The “Regulations” have been formulated to standardize and guide the construction and operation of highway management systems for over‑dimensional and over‑weight vehicles, to accelerate the digital transformation of highway weight‑and‑size enforcement, and to enhance the capacity for managing such vehicles. They apply to the construction and operation of weight‑and‑size enforcement systems, as well as to the upgrading and retrofitting of existing systems.

The Ministry of Ecology and Environment has issued the “Regulations on the Hearing Procedures for Administrative Penalties in the Field of Ecology and Environment.”
On December 26, the website of the Ministry of Ecology and Environment published the “Notice on Issuing the Regulations on Hearing Procedures for Administrative Penalties in the Field of Ecology and Environment.”
The Regulations consist of five chapters and twenty-five articles, clearly setting forth provisions on hearing officers and hearing participants, hearing preparation, the conduct of hearings, and other related matters. They stipulate that when the competent ecological and environmental authority intends to impose any of the following administrative penalties and the party concerned requests a hearing, the authority shall organize such a hearing:
(1) Imposing a fine of RMB 5,000 or more on citizens, or a fine of RMB 200,000 or more on legal persons or other organizations;
(2) Where, with respect to citizens, legal persons, or other organizations, the total value of confiscated illegal gains or confiscated illegal property reaches the amount specified in paragraph (1);
(3) Temporary suspension of licenses, downgrading of qualification levels, revocation of licenses, and prohibition from applying for administrative permits for a specified period;
(4) Restricting the conduct of production and business activities; ordering suspension of production for remediation; ordering suspension of production or business operations; ordering closure; imposing restrictions on engaging in a profession; prohibiting engagement in a profession.
(5) Other relatively serious administrative penalties;
(6) Other circumstances prescribed by laws, regulations, and rules.

The Ministry of Ecology and Environment plans to issue the national ecological and environmental standard, “Technical Guidelines for Aquatic Toxicity Testing of Difficult-to-Test Chemical Substances.”
On December 26, the website of the Ministry of Ecology and Environment published the “Notice on Public Solicitation of Comments on the National Ecological and Environmental Standard ‘Technical Guidelines for Aquatic Toxicity Testing of Difficult-to-Test Chemicals (Draft for Comments)’,” with a deadline for submitting feedback set for February 17, 2025.
The Guidelines set forth technical requirements for conducting aquatic toxicity tests on chemicals with difficult-to-assess properties, covering the identification of such properties, the refinement of test methods, the analysis of exposure concentrations, and the characterization of toxicity outcomes. They serve as a supplement to the aquatic toxicity testing methods outlined in HJ/T 153 and are applicable to aquatic toxicity assessments of chemicals that are challenging to evaluate, including acute and chronic toxicity tests conducted using algae, daphnids, fish, and other aquatic organisms, with diluted water or liquid culture media as the exposure medium.

Five draft laws, including the Representative Law, are now open for public comment.
On December 25, the website of the National People’s Congress of China published five draft laws—the Law on Deputies to the National People’s Congress and to People’s Congresses at All Local Levels (Second Draft for Deliberation), the National Parks Law (Second Draft for Deliberation), the Law on Legal Education and Public Awareness (Draft), the Fisheries Law (Revised Draft), and the Law on the Safety of Hazardous Chemicals (Draft)—and opened them for public comment. The deadline for submitting feedback is January 23, 2025.
Among these provisions, the second‑reading draft of the revised Representatives Law explicitly stipulates that the handling of deputies’ proposals, criticisms, and opinions shall be reported by the standing committee’s administrative or working bodies, or by the relevant authorities and organizations, to the standing committee of the people’s congress at the same level, and the report shall be circulated at the next session of the people’s congress; reports on the handling of such proposals, criticisms, and opinions must be made public; and the specialized committees of people’s congresses at and above the county level, together with the standing committee’s administrative and working bodies, shall strengthen oversight and supervision of the processing of deputies’ proposals, criticisms, and opinions, so as to better ensure that deputies at all levels perform their duties in accordance with the law.

The Science and Technology Popularization Law has been revised for the first time, strengthening the content‑review obligations of online service providers.
On December 25, the 13th Meeting of the Standing Committee of the 14th National People’s Congress revised and adopted the Law of the People’s Republic of China on Science and Technology Popularization.
The revised Law on the Popularization of Science and Technology comprises eight chapters and sixty articles, and for the first time establishes a National Science Popularization Month. It adds a new chapter on “Science Popularization Activities,” providing support to promote such activities by encouraging science‑related creative endeavors, developing the science‑popularization industry, strengthening outreach in key areas, enhancing the review and monitoring of science‑popularization information, and improving the evaluation of science‑popularization efforts. The law also stipulates that science‑popularization products and services offered by organizations and individuals, as well as any science‑related information they disseminate, must be lawful and scientifically sound, and shall not contain false or misleading content. Furthermore, online service providers are required to take immediate measures upon discovering users spreading false or erroneous information to prevent its further dissemination.

Three departments have issued the “Implementation Guide for the Digital Transformation of Manufacturing Enterprises.”
On December 25, the website of the Ministry of Industry and Information Technology published the “Notice on Issuing the ‘Implementation Guide for the Digital Transformation of Manufacturing Enterprises.’”
The Implementation Guide outlines a transformation roadmap across four key dimensions: developing a transformation plan, organizing and executing its implementation, conducting performance evaluations, and driving iterative optimization. It also proposes six sets of measures centered on business processes such as R&D and design, production and manufacturing, operations and maintenance services, business management, supply chain management, and cross‑functional collaboration: first, strengthening cloud‑based collaboration in R&D and design; second, advancing the intelligent transformation of production processes; third, accelerating innovation in operations and maintenance service models; fourth, optimizing business management workflows; fifth, enhancing supply chain agility and resilience; and sixth, exploring integrated optimization across diverse application scenarios.

The Ministry of Natural Resources has issued a document to ensure the effective implementation of the new Mineral Resources Law.
On December 25, the website of the Ministry of Natural Resources published the “Notice on Effectively Implementing the New Mineral Resources Law.”
The Notice comprises four key areas, emphasizing the need to strike a balanced approach between property‑rights protection and administrative oversight. While implementing property‑rights registration for mining rights, it will leverage exploration and mining permits as critical tools to strengthen ongoing and post‑event supervision. It calls for the establishment and improvement of systems and rules governing mining‑rights registration, ensuring seamless integration with the unified real‑estate registration framework in terms of the mining‑rights register, mining‑rights certificates, and the mining‑rights registration system. This will fully uphold the public notice and credibility of mining‑rights registration, thereby safeguarding the legitimate rights and interests of mining‑rights holders. The Notice also directs the development of standards and technical specifications for mineral resource exploration and extraction, the optimization of exploration and mining plans, and the effective alignment of mining‑rights certificates with exploration and mining permits. Furthermore, it calls for the consolidation of approval systems, the streamlining of approval procedures, and the enhancement of approval efficiency. In accordance with the principle that “rights remain unchanged and certificates are not replaced,” efforts should be made to ensure a smooth transition between old and new certificates, so that exploration and mining permits issued prior to the entry into force of the new Mineral Resources Law remain valid within their respective terms of validity, and no mandatory certificate replacement shall be imposed. Where renewal is required, the certificate‑renewal process must be simplified to improve efficiency.

The State Administration for Market Regulation plans to issue the “Measures for the Implementation of the Fair Competition Review Regulations.”
On December 25, the website of the State Administration for Market Regulation published the “Notice on Public Solicitation of Comments on the ‘Measures for the Implementation of the Regulations on Fair Competition Review (Draft for Comments)’,” with the deadline for submitting feedback set for January 24, 2025.
The Measures comprise five chapters and forty-six articles, further specifying the conditions for applying exemption provisions, clarifying the meanings of “no less favorable alternative measures” and “reasonable implementation period and termination conditions,” and stipulating that drafting agencies shall conduct fair‑competition reviews at the drafting stage, once the content of relevant policies and measures is substantially complete. If, following such review, significant changes are made to the policy or measure, a new review must be undertaken. The regulations governing the solicitation of comments during the review process have been refined, with specific requirements set forth for the elements of the drafting agency’s review conclusions. Moreover, practical provisions have been strengthened to enhance the operability of the fair‑competition review mechanism for major policies and measures, clearly defining the review materials that drafting agencies are required to submit and the review procedures, among other matters.

Taxation
The full text of the Value-Added Tax Law has been published, with certain tax preferential provisions revised.
On December 25, President Xi Jinping signed Presidential Order No. 41, promulgating the full text of the Value-Added Tax Law of the People’s Republic of China, which will take effect on January 1, 2026.
The Value-Added Tax Law comprises six chapters and 38 articles, covering general provisions, tax rates, taxable amounts, tax incentives, collection and administration, and supplementary provisions. Compared with the second‑reading draft of the Value-Added Tax Law, this version has revised certain tax incentive measures: for instance, in Article 24, which lists items exempt from VAT, “contraceptive drugs and devices” have been deleted; and Article 25 introduces a new circumstance—donations to public welfare causes—for which specific VAT preferential policies may be formulated. The Law also specifies the exact time limit for taxpayers to renounce tax incentives, setting it at “thirty-six months” in Article 27.

State Council Executive Meeting: Prevent the Misalignment of Interests Between Intermediary Institutions and Issuers; Severely Crack Down on Financial Fraud
On December 23, Premier Li Qiang of the State Council presided over an executive meeting of the State Council, which reviewed and approved the “Regulations of the State Council on Standardizing the Services Provided by Intermediary Institutions for Companies’ Public Offerings of Shares (Draft),” among other items.
The draft emphasizes the need to prevent conflicts of interest between intermediary institutions and issuers, to rigorously crack down on illegal practices such as financial fraud and fraudulent issuance, and to promote the healthy and stable development of the capital market.
The meeting noted that transfer payments should be leveraged to guide high-quality local development, with incentive funds allocated preferentially to regions that make substantial tax contributions and exhibit robust revenue growth. Localities are encouraged to foster tax bases through high‑quality development, thereby enhancing their initiative in pursuing growth and ensuring fiscal sustainability.
With regard to administrative inspections of enterprises, the State Council Executive Meeting stipulated that the entities conducting such inspections must be clearly defined, inspection items must be streamlined and publicly disclosed, the frequency of on-site inspections should be reduced, and arbitrary inspections must be prohibited. In terms of pharmaceutical and medical device regulatory reform, the meeting emphasized enhancing the quality and efficiency of review and approval processes, expediting the approval and market access of urgently needed drugs and medical devices, granting exemptions from clinical trials for innovative drugs and medical devices intended for rare diseases that meet the relevant criteria, and elevating the compliance standards of the pharmaceutical industry.

LITIGATION & ARBITRATION
The Supreme People’s Court and the Supreme People’s Procuratorate, in conjunction with the All-China Federation of Trade Unions, have released typical cases involving the “one letter and two documents” system for labor law supervision.
On December 27, the All-China Federation of Trade Unions, the Supreme People’s Court, and the Supreme People’s Procuratorate jointly released ten exemplary cases of labor law supervision under the “One Letter and Two Documents” framework.
The ten typical cases released in this batch highlight the coordinated collaboration between the judicial functions of the courts and procuratorates and the trade unions’ labor-law oversight through the “one letter and two documents” mechanism, providing judicial safeguards for trade unions to protect workers’ legitimate rights and interests. Together, these efforts help address issues such as wage arrears and delayed disability allowances faced by migrant workers, sanitation workers, and employees injured on the job, while also ensuring that regulatory responsibilities—including occupational disease prevention—are fulfilled and that outdoor workers receive high-temperature allowances and delivery personnel are covered by work‑injury insurance. In Case No. 2, when the employer’s failure to voluntarily comply with an effective judgment imposed a heavy burden on the worker, the people’s court issued a judicial recommendation and simultaneously forwarded a copy to the All‑China Federation of Trade Unions, thereby successfully resolving a nearly twenty-year‑long enforcement dispute through a flexible and constructive approach.

The Supreme People’s Court has released the 43rd batch of guiding cases, focusing on state compensation.
On December 25, the Supreme People’s Court website published the “Notice on the Release of the 43rd Batch of Guiding Cases,” which includes a total of seven cases.
In Guiding Case No. 241, in August 1997, police officers of the Pingguo County Public Security Bureau in the Guangxi Zhuang Autonomous Region, while investigating a criminal case, unlawfully used firearms, accidentally shooting and injuring Huang Mouyi—a person not involved in the case—and causing him to suffer permanent disability, which was subsequently assessed as Grade I disability. On September 14, 1998, the Compensation Committee of the Baise Intermediate People’s Court issued Compensation Decision No. (1998) Bai Zhong Fa Wei Pei Zi No. 4, ordering the Pingguo County Public Security Bureau to compensate Huang Mouyi with RMB 98,230.63 for medical expenses, hospitalization fees, lost wages, and other costs incurred up to September 14, 1998, as well as RMB 201,722.4 in disability compensation. In 2018, Huang Mouyi again filed a claim for state compensation, seeking from the Pingguo County Public Security Bureau over RMB 1.5 million to cover disability compensation, nursing expenses, assistive device costs, and other related expenses. The Guangxi Higher People’s Court held that although more than twenty years had elapsed since the incident, the harm caused to Huang Mouyi by the unlawful use of firearms continued to persist. Considering Huang Mouyi’s degree of disability, age, and health condition, the losses were likely to continue and expand, constituting newly arising damages. Accordingly, Huang Mouyi’s request for compensation for newly incurred damages arising from the same unlawful act—namely, additional nursing expenses and costs for disability‑related assistive devices—did not constitute double compensation, and the people’s court was legally entitled to uphold such claims.

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