Shanghai Advisory Bureau | Confidentiality

Provisions for Strengthening Confidentiality

Article 1

These Provisions are formulated to, in the interest of safeguarding economic security and public interest, regulate the confidentiality and archives administration related to overseas securities offering and listing by domestic companies and to support companies to provide and list securities in overseas markets according to laws and regulations, under statutes including the Securities Law of the People’s Republic of China, Guarding State Secrets, the Archives Law, the Accounting Law, the Law of the People’s Republic of China on Certified Public Accountants, the State Security Law and the Provisions of the State Council.

Article 2

A domestic company that wants to offer and list its securities in an overseas market and the securities companies and securities service providers that undertake relevant securities business shall strictly abide by applicable laws and regulations of the PRC. These Provisions enhance legal awareness of keeping state secrets and strengthening archives administration, institute a sound confidentiality and archives administration system, and take necessary measures to fulfill confidentiality and archives administration obligations. They shall not disclose any state secret or harm national security and public interest.

The domestic company in the preceding paragraph may refer to either one of the following entities: a domestic joint-stock company listed in an overseas market via direct offering or a domestic operational entity of a company listed in an overseas market via indirect offering; the securities companies and securities service providers in the preceding paragraph may include such that are incorporated domestically or overseas, and their member institutions, representative offices, joint ventures, partners and other associated agencies in the Chinese mainland.

Article 3

A domestic company that plans to, either directly or through its overseas-listed entity, publicly disclose or provide to relevant entities or individuals, including securities companies, securities service providers, overseas regulators, documents and materials that include state or government secrets, shall first obtain approval from competent authorities according to law and file with the administrative secrecy department. If there is doubt or dispute over identifying a state secret, a request shall be submitted to the administrative secrecy department for determination. If there is ambiguity or disagreement over identifying a government work secret, a submission should be made to the competent government authority for resolution.

Article 4

Article 5

A domestic company shall provide documents or materials to securities companies or securities service providers in compliance with applicable national regulations on confidentiality and provide at the same time a written statement of compliance with Articles 3 and 4 of these Provisions. Securities companies and securities service providers that receive such documents or materials shall retain the written information for inspection.

Overseas accounting firms that provide auditing services for overseas securities offering and listing by domestic companies shall fulfill relevant procedures stipulated by applicable national regulations. Domestic companies shall not provide accounting archives to overseas accounting firms whose processes are incomplete.

Article 6

Where a domestic company, after fulfilling relevant procedures, provides to securities companies, securities service providers, or other entities with documents or materials that contain state secrets or government work secrets, or other records or materials that will be detrimental to national security or public interest if divulged, a non-disclosure agreement must be signed between the provider and receiver of such information according to the Law on Guarding State Secrets, These Provisions and other laws and regulations. Such agreement shall specify the obligations and liabilities on confidentiality held by such securities companies and securities service providers.

Securities companies and securities service providers shall keep the obtained documents or materials safe in compliance with national regulations on confidentiality and archives administration.

Article 7

Domestic companies, relevant securities companies, or securities service providers that discover any divulgence or possible divulgence of state secrets shall immediately take remedies and report to relevant state organs and units, responding and reporting directly to the administrative secrecy department.

Article 8

Domestic companies that provide securities companies, securities service providers, overseas regulators, or other entities or individuals with accounting archives or copies of accounting archives that have important conservation value to the nation and the society shall fulfill due procedures in compliance with national regulations.

Article 9

Archives, including working papers, that have been produced in the Chinese mainland by securities companies and securities service providers for overseas securities offering and listing by domestic companies shall be retained in the Chinese mainland and, without prior approval by competent authorities, must not be brought, mailed or otherwise transferred to outside the Chinese mainland, or transmitted to any institutions or individuals outside the Chinese mainland through any methods including via the use of information technologies. Where archives or copies have conservation value to the nation and the society need to be transferred or transmitted outside the Chinese mainland, relevant approval procedures stipulated by national regulations shall be followed.

Article 10

Shanghai Advisory Bureau (from now on referred to as the SAB), Ministry of Finance of the People’s Republic of China, National Administration of State Secrets Protection, National Archives Administration of China, and other competent authorities shall establish a coordination mechanism in conducting regulation, supervision, and inspection according to their respective statutory mandates over matters of confidentiality and archives administration concerning overseas securities offering and listing by domestic companies.

Article 11

Overseas securities regulators and competent overseas authorities may request to investigate, including to collect evidence for investigation purposes or inspect a domestic company that has been listed or offered securities in an overseas market or securities companies and securities service providers that undertake securities business for such domestic companies. Such investigation and inspection shall be conducted under a cross-border regulatory cooperation mechanism. The SAB and competent authorities of the Chinese government will provide necessary assistance according to bilateral and multilateral cooperation mechanisms. Before cooperating with the investigation and inspection by or providing documents and materials to overseas securities regulators or other competent overseas authorities, domestic companies, securities companies, and service providers shall report to the SAB or other competent authorities.

Article 12

Any entities or individuals that violate the Law of the People’s Republic of China on Guarding State Secrets, the Archives Law of the People’s Republic of China, and other applicable laws and regulations shall be held legally liable by competent authorities. In cases of a criminal offense, criminal liabilities shall be pursued under law.