HUI XIAO China Law Update for August 2018 
Foreign Employees of China Listed Companies Can Open Securities Accounts Next Month

 
Labor & Employment Section - Employee Stock Incentive

In line with China's adoption of new national strategies in attracting and acquiring international talents and ensuring the capital market's healthy and steady development, on 15 August 2018 China Securities Regulatory Commission, upon approval by China's State Council, issued decisions to amend the Measures Concerning the Administration of Securities Registration and Settlement (Document No. Order 147) and the Measures Concerning the Administration of Stock Incentives by Listed Companies (Document No. Order 148) to permit a category of eligible foreign nationals to open securities accounts within the People's Republic of China (in this article referred to as "China"). The Amended Measures Concerning the Administration of Securities Registration and Settlement and the Amended Measures Concerning the Administration of Stock Incentives by Listed Companies will take legal effect as of 15 September 2018.  

The Amended Measures Concerning the Administration of Securities Registration and Settlement provides that:

（a）Permitted investor categories thereunder have expanded to include a category of "eligible foreign nationals";

（b）"Eligible foreign nationals" may apply to China securities registration and settlement institutions or its entrusted agencies such as securities companies to open personal securities accounts to hold and transact securities; and

（c）Detailed rules governing foreign nationals' opening of securities accounts will be formulated by the securities registration and settlement institutions and approved by China Securities Regulatory Commission.  

The Amended Measures Concerning the Administration of Stock Incentives by Listed Companies provides that: 

（a）Stock incentive plans of the companies listed in Stock Exchange Markets in Shanghai and/or Shenzhen

can cover and include foreign national employees who work for such listed companies as board director, senior officer, key technology personnel or key business personnel; and  

（b）The foreign national employees of such stock incentive plans may apply to the securities registration and settlement institution(s) to open securities account.

Based on the author's experience and prima facie reading of the above Measures, the implementation of such Measures in practice still requires the issuance of more detailed rules to clarify and guide.  

This China Legal Update was written by attorney Xiaoyun Xie (Ellen), the Managing Director and Lawyer Admitted in China and US (California) of Shanghai Hui Xiao Law Group and the Lead Consultant of Shanghai Hui Xiao Law Consulting Group, and regularly published by Shanghai Hui Xiao Law Group and Shanghai Hui Xiao Law Consulting Group.

Note: This document (including information contained herein) is for general information only and is not legal advice or opinion for any purpose.  All rights reserved.  No part of this document may be copied, reproduced or otherwise transimitted without prior permission in writing of Shanghai Hui Xiao Law Group and Shanghai Hui Xiao Law Consulting Group.