To further standardize the corporate governance of listed companies, the Shanghai Stock Exchange (hereinafter referred to as the "SSE") has revised the "Rules Governing the Listing of Stocks on Shanghai Stock Exchange (2014 Revised Version)" and added the relevant provisions as follows:
1. A new article is added as Article 3.1.6: "A listed company shall establish an Audit Committee under the board of directors. The internal audit department shall be responsible to the Audit Committee and report to the Audit Committee. The independent directors shall account for more than half of the Audit Committee members and act as the convener. At least one independent director should be a professional accountant."
2. A new article is added as Article 6.5: "The accounting firm hired by a listed company to provide auditing of accounting statements, net asset verification and other related services shall have the qualifications to perform securities and futures related businesses."
The appointment or dismissal of an accounting firm of the company must be decided by the general meeting of shareholders. The board of directors may not appoint an accounting firm before the decision of the general meeting of shareholders.
When the company dismisses an accounting firm or does not renew its hiring contract with the accounting firm, it shall notify the accounting firm in advance. When the shareholders' general meeting votes to dismiss the accounting firm, the accounting firm may state its opinions. Where an accounting firm submits a resignation, it shall explain to the general meeting of shareholders whether there are irregularities of the company."
3. The item number of other relevant articles should be adjusted accordingly.
The revised "Rules Governing the Listing of Stocks on Shanghai Stock Exchange (Revised in April 2018)" has been approved by the SSE Board of Directors and the China Securities Regulatory Commission. It is hereby promulgated and will be implemented as of the date of promulgation. The revised rules can be found under the "Listing Rules" column of the "Regulation" category on the official website (http://www.sse.com.cn). The "Rules Governing the Listing of Stocks on Shanghai Stock Exchange (2014 Revised Version)" is therefore repealed.
Thank you for your attention.
Shanghai Stock Exchange
April 20, 2018
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