Regulators in China have become uncomfortable with how some companies are describing the country’s risks to international investors.
Last month officials from the country’s securities regulator told a group of domestic law firms to soften the wording of China-specific risk disclosures in overseas stock-listing documents, according to people familiar with the meeting. The officials suggested alternative descriptions of certain risks and said some should be dropped entirely.
The lawyers were told to avoid mentioning “adverse changes” in China’s economy and to describe it as “evolving.” Instead of saying that the country’s administrative and court proceedings can be protracted, they were advised to point out simply that China’s legal system is different from other jurisdictions. And rather than saying that laws and regulations in the country can change “without notice,” the guidance was to use wording about how they could change “from time to time.”
‘Enforcement 40’ for 2020
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