CHINA Law and Practice Contributed by: Jeff Liu, Jeanette Wang, Yulong Lai and Yun Bi, Shihui Partners
or divisions, without specifically addressing change- of-control thresholds or particular shareholding per - centages. Relevant national sector regulators may include the National Energy Administration (NEA), the National Press and Publication Administration (NPPA), the Ministry of Education, the State Tobacco Monopoly Administration, etc. These regulated industries include (but are not limited to): • Mining • Media and culture • Education Enterprises licensed to operate in certain restricted sectors may need approval from the original licensing authority for modifying licence details or for re-licens - ing due to mergers or divisions. These requirements address changes to licences because mergers or divi - sions of the licensed entities may alter permit contents or affect the licensed enterprise’s qualification. National licensing bodies may include the MIIT, the NHC, the NEA, the Civil Aviation Administration of China, the National Railway Administration, the Min - istry of Housing and Urban-Rural Development, and the Ministry of Emergency Management. These licence-regulated sectors include (but are not limited to): • Telecommunications and the internet • Medicine and healthcare • Energy • Transportation • Building and construction • Scientific research and technological services Additional Approval Requirements • Transfer of state-owned assets: M&A transac - tions involving state-owned assets require approval from the State-Owned Assets Supervision and • Tobacco • Printing Licence Approval Requirements
Administration Commission (SASAC) or its local counterpart for equity transfers in state-invested enterprises. • Listed company transactions: For listed compa - nies, review by the relevant stock exchange and CSRC registration are required when undertaking a transaction where their shares (or securities that can convert into shares) are issued as considera - tion. Theoretically, a transaction using cash con - sideration is not directly reviewable by the stock exchange or CSRC. However, in practice, the stock exchange still exercises its supervisory authority over a listed company through reviewing the listed company’s information disclosures. When share - holders transfer directly held shares of a listed company through a share transfer agreement, the relevant stock exchange’s compliance review and consent are required. 6.2 Approval Process and Timelines Overall Framework The sector-specific approval process for M&A trans - actions in China follows a similar framework, which typically entails four main stages: (i) application; (ii) review; (iii) decision; and (iv) announcement. Depend - ing on the size, scope and location of the business involved, the national authority or its local counter - parts (provincial or sub-provincial) may be responsible for approving the transaction. The approval timeframe typically ranges from several weeks to six months. Financial Sector Regulatory authorities The financial sector is mainly overseen by: (i) the NFRA (supervising, eg, banks, insurance companies, non-bank financial institutions); (ii) the CSRC (regu - lating securities companies, futures companies, fund management companies, etc); and (iii) the PBOC (overseeing, eg, payment institutions, financial holding companies). Depending on the type of financial insti - tution involved, approval from one or more of these regulators may be needed. Approval process and timeline When a triggering event (eg, a change of control or shareholding change) occurs, investors need to notify the target financial institution usually within a specific time limit (eg, 15 working days). The target financial
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