Listing on the Stock Exchange in Shanghai
Listing on the Stock Exchange in ShanghaiUpdated on Thursday 16th May 2019
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Companies in China can list on the Shanghai Stock Exchange (SSE), one of the two available independent stock exchanges in the People’s Republic of China. The SSE is the most successful stock market in Mainland China in terms of listed companies, total and tradable market value. A company that wants to list shares on the Shanghai Stock Exchange must first make an initial public offering (IPO). The decision to list a company on the stock exchange is an important one and it represents a significant change for the company. Our Chinese lawyers can help you list your company on the Shanghai Stock Exchange.
Listing requirements and procedure
A Chinese company has to meet the following listing requirements in order to be admitted to the Shanghai Stock Exchange:
- - make an initial public offering;
- - have its shares issued to the public and approved by the China Securities Regulatory Commission;
- - have a total stock capital of no less than 50 million RMB (approximately 7,3 million EUR);
- - its public issued shares are no less than 25% of its shares or 10% of the total capital stock is more than 400 million RMB;
- - have no false financial and accounting records and no legal violations within the last three years.
Before a company can list securities on the SSE, it must obtain an approval from the China Securities Regulatory Commission’s (CSRC) issuance and examination and verification committee. According to the listing procedure for the SSE, the applicant must contact the listing department or the bond funding department and apply for a securities code and a securities trading abbreviation. After obtaining the approval documents, the applicant must submit an issuance program and an issuance plan to the SSE. Our Chinese attorneys can help you observe all the necessary steps for listing a company on the Stock Exchange in Shanghai.
We invite you to watch the video below for details about the Stock Exchange in Shanghai:
Listing application and fees
Several documents must be submitted to the issuance and listing department of the Shanghai Stock Exchange when making an application to list shares. The most important documents required are as follows:
- - share listing application;
- - the approval documents from the CSRC;
- - the resolution of the board of directors and the shareholder’s meeting regarding the issuance and listing of shares;
- - a copy of the company’s business license and its articles of association;
- - the company’s financial and accounting reports for the last three years audited.
These are just some of the documents required by the SSE. Our law firm in China can provide you with a complete list of the required documents. The initial listing fee for A class shares is 0.03% of the total par value listed, no more than 30,000 RMB. The annual listing fee for A class shares is 0.12% of the total par value listed, but no more than 6,000 RMB.
Listed companies on Shanghai Stock Exchange
There are more than 15,000 companies from around the world listed on the Stock Exchange in Shanghai, and the Chinese authorities continue to adjust the retail investor protection through varied regulations, as stipulated by the Science and Technology Innovation Board of Shanghai Stock Exchange. Here are a few important improvements to consider when deciding on listing the company on SSE:
- Listed companies in Shanghai must open the channel of online voting, in order for the shareholders to join the general meeting.
- Shareholders who attend the general meeting through the above-mentioned method will be considered present.
- In the case of holding of shares of a subsidiary in China listed on the stock exchange, these can be legally eliminated within one year, if special purposes are stated.
- The subsidiary will not exercise the voting rights which correspond to the shares held prior to the elimination.
Let our team of lawyers in China tell you more about the legal aspects regarding the recent modifications related to the stock exchange in Shanghai.
Why you should list the company on SSE
There are numerous advantages for investors and their companies listed on SSE, and among these, the exposure and the access to varied capital networks worldwide. Even small companies interested in gaining more capital for future investments can be easily listed on Shanghai Stock Exchange. In the same area of benefits, listing on SSE can enhance the profile of the business with the current stockholders and with forthcoming investors. The customer retention and growth can be increased right after being listed on SSE. Moreover, visibly listed stocks or bonds generate a market for a company’s securities and consequently carries added value or upsurges the assessment of the business, creating liquidities in a short period of time. Above all, foreign investors decide on listing companies on Shanghai Stock Exchange considering the political and economic stability, plus the solid legal structure that continues to be improved on a yearly basis. The connections with Asian, American and European countries represent a plus in front of investors in China wanting to test the SSE.
What is the Information Memorandum for SSE?
The Information Memorandum is a set of documents created in a confidential manner, serving as the starting point for companies wanting to list on Shanghai Stock Exchange and raise capital. Such a document contains information about the benefits, the insights and other details about the listing on the stock exchange. Moreover, the valuation of the business is mentioned by the Information Memorandum without any pricing, in order to sell the shares without offering the lowest price at the time they are listed. The risk factors, the financial projections, the management team, the sale summary, the description of the business, a competitive analysis, future projections and growth business opportunities can be mentioned by the Information Memorandum. It is important to know all the legal aspects about such documents and you can talk to our advisors at any time.
Are there other important exchanges in China?
Yes, Shanghai Future Exchanges or Shanghai Steel Electronic Exchange, alongside Shenzhen Stock Exchange or China Financial Futures Exchange might be in the attention of international players looking forward to bringing a favorable business trend to their companies in China. Let us remind you that our Chinese attorneys are at your service with complete legal assistance for local and foreign entrepreneurs interested in listing on the stock exchanges in China.
The support offered by our lawyers in China
Those entrepreneurs interested in listing on Shanghai Stock Exchange can get in touch with our lawyers in China for complete legal advice and recommendations in this direction. Having an extensive experience in this area, our team of advisors can assist business persons with the regulatory documents, prospectus and other related matters, no matter if the registration is made from China or from abroad. Because it is important to get straight to business in China, our team will work closely with you and your company, in order to rapidly register the company on the stock exchange, by drafting the business plan and creating the feasibility report. It is important to know that you can rely on the support of our Chinese team of lawyers throughout the entire registration process, and you can benefit from complete legal services in any adjustments, if it is the case.
For more information about listing stocks and bonds on the Shanghai Stock Exchange, you can contact our law firm in China.