Regulator Lets Listed Companies Offer Employee Stock Ownership Plans

In what is seen as a welcome development for multinationals investing in companies listed on China’s stock exchanges, listed Chinese companies may now offer employee stock ownership plans (ESOPs) under new guidance from China’s securities regulator.

Issued June 20 by the China Securities Regulatory Commission (CSRC), Announcement [2014] No. 33 revises and implements an August 2012 draft regulation that proposed expanding participation in stock ownership plans for all employees.

The CSRC guidance, effective immediately, will primarily affect domestic listed companies in China, according to Richard Gu, a senior consultant with Linklaters in Shanghai, who has experience in China-related cross-border mergers ...