Strategic investment in A-share companies by foreign investors

By Zhang Yichi, East & Concord Partners

On 31 December 2005, the Ministry of Commerce, the China Securities Regulatory Commission, the State Administration of Taxation, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange jointly issued the Measures for the Administration of Strategic Investments in Listed Companies by Foreign Investors, providing a clear legal basis and operational guidelines for strategic investments in A-share listed companies by foreign investors. The measures took effect one month later in January 2006.

张亦弛 Zhang Yichi 天达共和律师事务所 合伙人 Partner East & Concord Partners
Zhang Yichi
East & Concord Partners

The measures soon were followed in February by a document from the China Securities Depository and Clearing Corporation, the Notice on Relevant Issues Concerning the Opening of A-share Securities Account by Foreign Strategic Investors.

The quick succession of the A-share-focused legislation led to 2006 being dubbed the year of the birth of A-share acquisitions by foreign investors by some market participants.

On 27 September 2013, nearly eight years after the measures took effect, the Ministry of Commerce circulated for public comment a draft amendment of the measures. While the revision has yet to take effect, a close study of the draft will glean certain regulatory trends.

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Zhang Yichi is a partner of East & Concord Partners

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