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People's Daily Online>>China Business

CSRC tightens rules on acquisitions

By Chen Jia (China Daily)

10:38, February 21, 2012

Moves aim to reduce price volatility and enhance the fairness of trade

BEIJING - China's top securities regulator moved on Monday to tighten its supervision of listed companies' acquisitions, with moves to make disclosures of transactions more transparent and professional advisers more accountable.

The China Securities Regulatory Commission ordered that major shareholders, defined as those who hold more than 50 percent of a listed company's issued stocks, must disclose every 1 percent increase in their stakes during an acquisition process.

If the increase exceeds 2 percent, these shareholders must halt purchases for the rest of the day and the next as well, the commission said.

The previous disclosure rule covered changes of 5 percent or more.

The new rule could reduce price volatility and enhance the fairness of trade, said a CSRC official who declined to be identified.

The commission also said that shareholders with stakes of larger than 30 percent may only increase their holdings by an amount equivalent to less than 2 percent of the total volume in the previous 12 months.

These changes will take effect on March 15.

The changes signal tighter supervision of acquisitions involving listed companies, said Yang Hai, chief analyst at the China Financial Online, a professional stock market information and services company.

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