CSRC Issues Interpretation of Takeover Rule for Listed Companies

On January 10, 2025, the China Securities Regulatory Commission (CSRC) issued the Opinions No.19 on the Application of Securities and Futures Laws — Opinions on the Application of Articles 13 and 14 of the Administrative Measures on Acquisition of Listed Companies (the “Opinions”), with immediate effect.

The Opinions provide detailed interpretations of Articles 13 and 14 of the Administrative Measures on Acquisition of Listed Companies. The key clarifications are as follows: (i) Threshold Calculations: The increases or decreases of 5% or 1% referenced in Articles 13 and 14 explicitly refer to integral multiples of 5% or 1%, respectively; (ii) Passive Shareholding Adjustments: Investors are not required to fulfill disclosure or sale restriction obligations when their shareholding ratio passively crosses the specified thresholds due to changes in the listed company’s share capital. Instead, the listed company is responsible for announcing such changes; (iii) Retroactive Application: The new interpretation takes effect immediately upon its release. For past violations discovered after implementation, the principle of “from the old to the new and from the light” will apply.