Standardised validation

Author: | Published: 1 Dec 2008

The Industry and Commerce Organ Share Pledge Registration Measures issued by the State Administration of Industry and Commerce (SAIC Measures) fill a procedural void that existed in most areas and create an easy first step in verifying a pledge's validity. The SAIC Measures cover pledges over: (i) shares in a company limited by shares that are not listed on any public exchange; and (ii) registered capital in a limited liability company (unlisted equity). By contrast, there are still important procedural gaps for the registration of pledges over Shenzhen-listed shares that are not held by securities companies.

Listed share pledge gaps remain Pledges over shares of a company limited by shares that have been listed on a stock exchange (listed shares) are excluded from the coverage of the SAIC Measures. Pledges over listed shares are under the jurisdiction of the China Securities Regulatory Commission (CSRC). At present, their registration is handled by...