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Self-disciplinary Regulatory Rules and System


The National Equities Exchange and Quotations Company Limited ("NEEQ") has recently issued the Implementing Rules for Self-disciplinary Regulatory Measures and Disciplinary Punishment (the "Rules") and the Implementing Rules for Reviews, and simultaneously distributed the Guidelines for Takeover Bids over NEEQ-listed Companies and the Announcement on Implementing the Takeover Bid System. All of these documents have taken effect immediately from the date of issuance.

Introducing extra considerations, including market layers, and clarifying the relation with upper-level laws and regulatory demands along with the market development, the Rules, as a replacement of the previous measures for self-disciplinary regulation, make adjustments and improvement in five aspects as below. Specifically, the first is diversifying the regulatory "toolkit" by adding several new self-disciplinary regulatory measures, such as "requiring taking corrective actions publicly" and "requiring attending training courses or sitting for exams within prescribed time limits"; the second is optimizing the scope of targets under supervision; the third is exploring practicable ways for multi-layered regulation and setting different implementation criteria for self-disciplinary regulatory measures and disciplinary punishment according to various market layers; the fourth is clarifying the mechanism for regulatory connections; and the fifth is making improvement to remedy approaches for right protection.

Gong Chu, Oscar

A lawyer at DeHeng Law Offices (Shenzhen)

Floor 22/11/19/33, Section B, Anlian Plaza,

No. 4018, Jintian Rd., Shenzhen. 518026 P.R.C

Mobile: +86 135 9049 6399, +86 186 8246 3518