JC Master Legal News Issue 1160

Key Takeaways for This Issue

Listed companies’ fundraising rules are set for revision, with stricter oversight of changes in the use of funds and slow progress in their deployment.

The “Regulations on the Supervision of Funds Raised by Listed Companies” were publicly released on the CSRC website on May 15 and will take effect on June 15, 2025.

The China Securities Regulatory Commission has issued new regulations on major asset restructurings of listed companies.

On May 16, the China Securities Regulatory Commission issued the revised Measures for the Administration of Major Asset Restructurings of Listed Companies (hereinafter referred to as the “Restructuring Measures”), which shall take effect from the date of their promulgation.

Major progress on U.S.-China tariffs! A joint statement from the Geneva economic and trade talks has been released.

High-level China–U.S. economic and trade talks were held in Geneva, Switzerland, from May 10 to 11. On May 12, the “Joint Statement of the China–U.S. Economic and Trade Talks in Geneva” was officially released. 
 

Finance and Capital Markets

FINANCE &CAPITAL MARKETS

The two departments plan to implement differentiated adjustments to the contribution rates for the Securities Settlement Risk Fund.

The China Securities Regulatory Commission and the Ministry of Finance have launched a public consultation on the “Administrative Measures for the Securities Settlement Risk Fund (Draft Amendment for Public Comment),” with the deadline for submitting feedback set for June 7, 2025.

This revision adjusts the scope of risk‑fund collection to enhance its adaptability, lowers the applicable contribution rates, refines provisions related to the size of the risk fund, optimizes investment management and fund placement, streamlines disbursement procedures, and expands the range of administrative measures and regulations. The draft for public comment specifies that the risk fund shall be levied on securities transactions settled through the multilateral netting guarantee method employed by securities registration and clearing institutions, covering equity‑type securities, cash‑settled fixed‑income securities, and repo transactions with collateral (Article 3). In accordance with the settlement risks associated with each type of business, differentiated adjustment rates are applied to the risk‑fund contributions: the contribution rate for equity‑type and fixed‑income cash‑settled securities is reduced to three‑tenths of the original standard, while the contribution rate for repo transactions remains unchanged (Article 3).

A landmark document has been released! The Supreme People’s Procuratorate and the China Securities Regulatory Commission have jointly pledged to safeguard the reform and development of the capital market.

On May 15, the Supreme People’s Court and the China Securities Regulatory Commission jointly issued the “Guiding Opinions on Strict and Impartial Law Enforcement and Judicial Administration to Serve and Safeguard the High-Quality Development of the Capital Market.” The Guiding Opinions constitute a programmatic document for providing judicial safeguards to support the reform and development of the capital market.

The “Opinions” set forth 23 measures across five key areas: overarching requirements, investor protection, regulation of market participants, coordination between judicial and administrative bodies, and organizational and implementation safeguards.

The Opinions state that, in judicial proceedings, where expertise from other disciplines—such as economics and finance, accounting, and auditing—is required, the views of relevant professionals shall be sought. Fraudulent issuance and falsification of financial information shall be prosecuted in accordance with the law, and legal liability shall be rigorously pursued, in line with the law, against issuers, their controlling shareholders and actual controllers, relevant intermediary institutions, as well as third parties—including suppliers—who instigate or assist in the falsification of financial disclosures. The system of civil liability for false statements shall be improved, with industry‑specific professional standards and business rules serving as the fundamental basis, thereby further strengthening the accountability of intermediary institutions.

The Opinions emphasize advancing and improving the diversified dispute-resolution mechanism, strengthening mechanisms for consultation and information sharing, ensuring seamless coordination between judicial proceedings and administrative regulatory procedures, and comprehensively enhancing the quality and effectiveness of judicial adjudication and enforcement as well as administrative supervision and penalties. They also call for optimizing the jurisdictional and trial mechanisms for financial cases, reinforcing financial adjudication frameworks and two-way exchange and training mechanisms, and continuously elevating the standardization and rule-of-law orientation of regulatory enforcement.

Listed companies’ fundraising rules are set for revision, with stricter oversight of changes in the use of funds and slow progress in their deployment.

The “Regulations on the Supervision of Funds Raised by Listed Companies” were publicly released on the CSRC website on May 15 and will take effect on June 15, 2025.

The CSRC’s current rules on the ongoing supervision of raised funds are primarily set out in “Regulatory Guidance No. 2 for Listed Companies—Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies (Revised in 2022).” This revision changes the title of Guidance No. 2 to “Regulatory Rules,” elevating its status within the hierarchy of normative documents from a guidance document to a foundational rule. In terms of specific provisions, 12 articles have been amended, 9 new articles have been added, 1 article has been merged, and 1 article has been deleted. The revision underscores that raised funds must be used exclusively for their designated purposes, imposes stricter oversight over changes in fund‑use purposes and slow disbursement progress, strengthens the security of such funds, enhances the efficiency of their utilization, and urges intermediary institutions to fulfill their duties and responsibilities.

The China Securities Regulatory Commission has issued new regulations on major asset restructurings of listed companies.

On May 16, the China Securities Regulatory Commission issued the revised Measures for the Administration of Major Asset Restructurings of Listed Companies (hereinafter referred to as the “Restructuring Measures”), which establish a phased‑payment mechanism for share consideration in restructuring transactions, enhance regulatory flexibility with respect to changes in financial condition,同业 competition, and related-party transactions, impose an inverse linkage between the investment term of private equity funds and the lock-up period for shares acquired through restructuring, and introduce a simplified review procedure for restructurings, thereby further deepening market reforms in the M&A and restructuring of listed companies. 
 

Business and Corporations 
COMMERCIAL & CORPORATE

The State Administration for Market Regulation plans to issue the Measures for the Administration of Business Entity Registration Applications and Agency Activities.

On May 12, 2025, the State Administration for Market Regulation issued the “Notice on Public Solicitation of Comments on the Measures for the Administration of Business Entity Registration Applications and Agency Activities (Draft for Comments),” with a deadline for submitting feedback set for May 23, 2025.

The Measures aim to optimize the business environment, standardize registration applications and agency practices, prevent fraudulent registrations, and strengthen anti‑money‑laundering efforts. Key provisions include: clarifying the concept and scope of registration agents; establishing an information management system; regulating agency activities; emphasizing anti‑money‑laundering obligations; and enhancing oversight of unlawful conduct. Registration agents are required to possess relevant professional expertise, conduct due diligence, and ensure that application materials are truthful and lawful. Registration authorities will exercise supervisory and administrative oversight over agents, and violators will be subject to administrative penalties.

The Ministry of Industry and Information Technology is conducting the 2025 certification and re‑examination of “Little Giant” enterprises specializing in niche fields.

On May 14, the Ministry of Industry and Information Technology issued the “Notice on Conducting the Recognition and Re‑examination of Specialized, Sophisticated, Distinctive, and Innovative ‘Little Giant’ Enterprises for 2025.” The online application deadline is June 5, 2025.

The notice stipulates that provincial-level specialized, refined, distinctive, and innovative SMEs may apply to be designated as “Little Giant” enterprises in the seventh batch. Enterprises recognized in the fourth batch of 2022 and those that passed the re‑evaluation in the first batch are eligible to apply for re‑evaluation. No fees are charged for applications; applicants must independently complete the application form and submit supporting documentation. No agencies have been authorized to handle application procedures, and the review process will employ phased assessments, a dual-random selection mechanism, and blind reviews. Enterprises must meet the eligibility criteria; applications from firms with annual revenues below RMB 50 million will not be accepted at this time. Applications will be submitted both online and via paper-based reporting, with financial data required to be supported by an audit report issued by a certified accounting firm. Any falsification of data will result in revocation of the designation and a three-year ban on future applications. 
 

Taxation

TAXATION

Major progress on U.S.-China tariffs! A joint statement from the Geneva economic and trade talks has been released.

High-level China–U.S. economic and trade talks were held in Geneva, Switzerland, from May 10 to 11. On May 12, the “Joint Statement of the China–U.S. Economic and Trade Talks in Geneva” was officially released.

According to the Statement, both parties commit to implementing the following measures by May 14, 2025:

The United States will: (1) amend the ad valorem tariffs imposed on Chinese goods, including those from the Hong Kong Special Administrative Region and the Macao Special Administrative Region, as set forth in Executive Order No. 14257 of April 2, 2025, by suspending the 24% tariff for an initial period of 90 days while retaining the remaining 10% tariff as prescribed under that executive order; and (2) rescind the additional tariffs on these goods imposed pursuant to Executive Order No. 14259 of April 8, 2025, and Executive Order No. 14266 of April 9, 2025.

China will: (1) amend the ad valorem tariffs imposed on U.S. goods pursuant to Tax Commission Announcement No. 4 of 2025, whereby the 24% tariff will be suspended for an initial period of 90 days, while the remaining 10% tariff on these goods will remain in effect, and the additional tariffs imposed under Tax Commission Announcements No. 5 and No. 6 of 2025 will be lifted; and (2) take the necessary measures to suspend or revoke the non-tariff countermeasures against the United States effective April 2, 2025.

Litigation and Arbitration

LITIGATION & ARBITRATION

The Standing Committee of the National People’s Congress has released the 2025 Legislative Work Plan.

Recently, the website of the National People’s Congress of China published the Standing Committee of the National People’s Congress’s 2025 legislative work plan, which specifies 14 bills to be further deliberated and 23 bills to be reviewed for the first time in 2025.

The plan specifies that, in 2025, the Standing Committee of the National People’s Congress will continue to deliberate in June on the Law on Administrative Penalties for Public Order, the Anti-Unfair Competition Law, the Law on Responding to Sudden Public Health Emergencies, the National Parks Law, the Maritime Law, the Law on Legal Education and Publicity, the Fisheries Law, and others; will resume deliberations in August on the Financial Stability Law; and will conduct a first reading in early October of the Law on the Safety of Hazardous Chemicals. In addition, during 2025, the Standing Committee will undertake a first reading of the Financial Law, the Enterprise Bankruptcy Law, the Tendering and Bidding Law, the Law of the People’s Bank of China, the Banking Supervision and Administration Law, the Food Safety Law, the Cybersecurity Law, the Foreign Trade Law, and other legislation.

The Intellectual Property Division of the Supreme People’s Court has, through a specific case, clarified the presumption and calculation of damages suffered by operators as a result of the implementation of horizontal monopoly agreements.

On May 7, the Intellectual Property Court of the Supreme People’s Court issued a final judgment, clarifying the presumption and calculation standards for damages suffered by operators as a result of the implementation of horizontal monopoly agreements.

The Intellectual Property Division of the Supreme People’s Court has issued a final judgment in a horizontal antitrust‑agreement case, holding that, during the period of the agreement’s implementation and within a reasonable time thereafter, absent any rebutting evidence, it may be presumed that an operator has suffered harm as a result of the agreement. The judgment further clarifies that if the conclusion of a contract is influenced by an antitrust agreement, any price increase borne by the operator may be regarded as damage. The amount of compensation is calculated based on the difference between the contracted price and the actual price; since the concrete company failed to demonstrate that the price increase was attributable to non‑antitrust factors, it must bear the adverse consequences of failing to meet its evidentiary burden. This ruling reduces the plaintiff’s burden of proof and safeguards the rights and interests of those harmed by monopolistic conduct.

The Supreme People’s Procuratorate has released the fourth batch of typical cases implementing the Civil Code.

On May 16, the Supreme People’s Procuratorate released the “Typical Cases of the Supreme People’s Procuratorate on Implementing the Civil Code (Fourth Batch),” showcasing the procuratorial organs’ achievements in ensuring the uniform and correct application of the Civil Code.

The six typical cases released this time cover multiple sections of the Civil Code, addressing legal issues such as economic compensation in divorce proceedings, the guardianship system, the transfer of land contract management rights, personal injury compensation in the construction engineering sector, support and maintenance obligations, and the protection of the right to one’s name. In the divorce dispute between Liu Mouzhen and Kang Mouqing, the procuratorial organ, through a recommendation for retrial, helped Liu Mouzhen obtain economic compensation; in the housing sales contract dispute involving Yu Mou, Shao Moujia, and Shao Mouyi, the procuratorial organ persuaded the court to declare the contract invalid, thereby safeguarding the rights and interests of the ward.