Shanghai Stock Exchange (SSE) recently revised the Rules Governing the Listing of Stocks and supporting rules and guidelines for its Main Board and the STAR Market with the approval of China Securities Regulatory Commission (CSRC). This revision aims to thoroughly implement the new Company Law, and align with the CSRC's Administrative Measures for Information Disclosure of Listed Companies (the English title is translated for reference only), Guidelines on Articles of Association of Listed Companies and other higher-ranking rules, promote listed companies to improve internal governance, and effectively protect the legitimate rights and interests of small and medium-sized investors.

The revisions to the Rules Governing the Listing of Stocks mainly include: 

First, clarify the audit committee's responsibilities, including its scope of authority, operating mechanism and performance of duties. 

Second, strengthen the responsibilities for directors and senior management and enhance the code of conduct for controlling shareholders and actual controllers, including specifying the loyalty and diligence obligations of directors and senior management, and adding relevant requirements on de facto directors. 

Third, strengthen the protection of shareholders' rights, especially small and medium-sized shareholders, including safeguarding the ad-hoc proposal rights of small and medium-sized shareholders, further clarifying the review and disclosure requirements for affiliated transactions, and improving relevant rules on shareholders with differentiated voting rights. 

Fourth, align with higher-ranking rules on bankruptcy and reorganization, and optimize the disclosure requirements for matters such as reorganization progress. In addition, according to the higher-ranking rules, a transition arrangement is made in the release notice for listed companies on matters such as adjusting the setup of internal supervision agencies.

In the next step, under the guidance of the CSRC, the SSE will thoroughly implement the decisions of the Party Central Committee and the State Council, closely follow the main task of preventing risks, strengthening supervision, and promoting development, and focus on the key strategy of institutional development. 

With a high-quality business rules system in place, the SSE will strive to boost the quality of listed companies and open a new chapter of high-quality development of the capital market.