The China Securities Regulatory Commission (CSRC) releases the "Special Rules on Shareholding Lessening of Listed Companies' Venture Capital Fund Shareholders" (the "Special Rules" for short) today. On the same day, the Shanghai Stock Exchange (SSE) releases the "Detailed Rules on Shareholding Lessening of Listed Companies' Venture Capital Fund Shareholders" (the "Detailed Rules" for short) to offer differentiated policy support to a venture capital fund to lessen holding of shares held by it before the IPO of the relevant listed company, bring convenience to the venture capital fund to withdraw and engage in other investment, mobilize its investing enthusiasm, promote the capital formation of small and medium-sized enterprises and hi-tech enterprises, and strengthen the Chinese capital market's capacity of serving the real economy.
The "Detailed Rules" has differentiated the investment duration of venture capital fund and formed the mechanism of the reversed link between investment duration and shareholding lessening period before IPO. If the investment duration before IPO is less than 36 months, shareholding lessening will be made in accordance with the existing rules; if the investment duration exceeds 36 months but not reaches 48 months, the shareholding lessening period of the shareholding lessening proportions (1% for auction trading and 2% for block trading) specified in the existing rules will be shortened from any 90 consecutive days to 60 days; if the investment duration exceeds 48 months, the shareholding lessening period specified in the existing rules will be shortened from any 90 consecutive days to 30 days. Besides, to guarantee the stability of the rules system and reduce the influence of any venture capital fund shareholder's shareholding lessening on the market, the "Detailed Rules" has not changed the requirements on shareholding-lessening information disclosure, shareholding-lessening proportion and shareholding period of transferee in block trading already mentioned in the existing shareholding-lessening rules.
The "Detailed Rules" will be put into effect from June 2, 2018, and the SSE will make relevant preparation. Next, the SSE will strictly implement relevant stipulations in the "Special Rules" and the "Detailed Rules", keep improving the self-regulation on shareholding lessening of venture capital fund shareholders, and maintain the market order.