I. The China Securities Regulatory Commission Issued the Business Rules for the Small and Medium Sized Enterprise Share Transfer System and their Detailed Rules.
In January 2013, the National SME Share Transfer System Co., Ltd. (“NSSTS Co.”) was officially established. On February 2, 2013, the China Security Regulation Commission (“CSRC”) issued the Interim Measures for the Administration of the SME Share Transfer System Co., Ltd. (“Interim Measures”). Accordingly, these regulations have defined the legal status of the National SME Share Transfer System (“NSSTS”), the NSSTS Co., and companies with stock listed on the NSSTS, as well as the responsibilities of NSSTS Co. Additionally, the aim of the Interim Measures is to establish the basic administrative framework of the NSSTS to highlight the self-regulatory nature of the NSSTS Co. Furthermore, the Interim Measures mandate the CSRC to implement uniform supervision and administration.
On February 18, 2013, the media reported that the NSSTS Co. issued the Business Rules for the SME Share Transfer System (the “Rules”) and their detailed rules, which is regarded as a milestone in the preliminary establishment of the National OTC system. According to the Rules, the threshold for investors becomes has been lowered so that not only qualified institutional investors, but also individual investors, trusts, funds, and bank financing products that satisfy the requirements can apply for participation in the public share transfer of companies with their stocks quoted on NSSTS. Regulations related to settlement of transactions and information disclosures are expected to be issued subsequently.
(From the website of CSRC)
II. The Supreme People’s Court Issued Judicial Interpretation No.4 on Several Issues Concerning Application of Law in the Trial of Labor Dispute Cases.
On February 1, 2013, the Supreme People’s Court issued Judicial Interpretation No.4 on Several Issues Concerning Application of Laws in the Trial of Labor Dispute Cases (“Interpretation (IV)”). Interpretation (IV) mainly specifies the connection between litigation proceedings and arbitration procedures, non-competition issues, amendment of labor contracts, the procedure for termination of labor contracts, economic compensation paid by an employing entity terminating operation upon the expiration of its term duration, labor relations of foreigners, and other issues.
(From the website of the Supreme People’s Court)
III. The State Council Has Amended Four Intellectual Property Rights Regulations to Increase the Amount of Administrative Penalties.
On February 8, 2013, the State Council successively issued decisions on amending four regulations, including the Computer Software Protection Regulations, the Implementing Rules for the Copyright Law, the Regulation on Protection of the Right to Network Dissemination of Information, and the Regulation on Protection of New Varieties of Plants. The Amendments are all related to strengthening the administrative punishment and increasing the cap on the administrative penalties.
(From the website of the State Council)
IV. China Has Revoked the Reservation of the Provision of the Form of Contract Specified in the United Nations Convention on Contracts for the International Sale of Goods.
Recently, the national government officially notified the Secretary General of United Nations to revoke the statement “not to be binding on the Article 11 and other regulations related with Article 11 of the United Nations Convention on Contracts for the International Sale of Goods.” The revocation has now come into effect. According to the United Nations Convention on Contracts for the International Sale of Goods, Article 11 provides that a sales contract does not need to be concluded in writing or evidenced by a written document and is not subject to any other requirement as to form. The contract may be proved by any means, including witnesses. Additionally, the United Nations Convention on Contracts for the International Sale of Goods permits a contracting state declare a reservation that it will not apply Article 11. China declared such a reservation when it singed the Untied Nations Convention on Contracts for the International Sale of Goods in accordance with the Chinese national laws in effect at that time. With the development of the Contract Law in 1999, that declared reservation has now finally been revoked.
(From the website of the Ministry of Commerce)
V. The Interim Measures on the Identification of Investments Made by Taiwanese Investors through Transfer of Investment from a Third Place Has Come into Effect.
On February 20, 2013, the Interim Measures on the Identification of Investments Made by Taiwanese Investors through Transfer of Investment from a Third Place (the “Interim Measures”) were published online. The Interim Measure became effective the same day. The Interim Measures concern Taiwanese investors using companies, enterprises, or other organizations registered in places other than mainland China and Taiwan but controlled, directly or indirectly, by Taiwanese investors (the “investor registered in any place except for mainland China and Taiwan”). When such an enterprise is used to establish an enterprise in mainland China, the investor can apply to identify the investor registered in a place other than mainland China and Taiwan as a Taiwanese investor.
(From the website of the Ministry of Commerce)
Quoted from DeBund Newsletter of March, 2013
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