“While governance practices at China-listed companies are improving, concerns like quality of disclosure, conflict of interest, director independence, governance failures, accounting issues and even embezzlement still remain.”

April 27, 2021

2021 China Proxy Season Preview

Below are key takeaways from ISS’ recently released China 2021 Proxy Season Preview. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.

  • Merger of the Main Board and SME Board of Shenzhen Stock Exchange (SZSE): The regulator approved the merger of the the main board and the SME board of SZSE to simplify and optimise the trading structure at the bourse.
  • Combination of QFII and RQFII Schemes: Chinese regulators have combined the QFII and RQFII schemes, lowered the entry requirements, simplified the application procedures and expanded foreign investment scope. The changes aim to attract more foreign investors.
  • Release of First Regulatory Measures Targeting Convertible Corporate Bonds: Measures targeting the unique features of convertible corporate bonds have been issued to fill current regulatory gaps and to protect investor rights following recent bouts of speculation.
  • Updates of Listing Rules to Improve Delisting Mechanism: Shanghai Stock Exchange (SSE) and SZSE updated their listing rules to improve delisting standards, simplify delisting procedure and protect investor rights.
  • Surge of Private Placements: Following the the regulator’s relaxation to the regulations governing private placements, a significant increase of private placement proposals was witnessed in 2020, and is expected to continue at an increased level in 2021.

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