New rules in March

National

1. Legislation Law of the People's Republic of China

Published 13 March 2023 / in force 15 March 2023

The amendment improved the guiding thought and principles of legislation; set out the requirements for constitutional review; improved the mechanisms that link and unify legislative decisions with reform decisions; improved the legislative powers, procedure and working mechanisms of the National People's Congress and its Standing Committee; added content to meet the needs of the reform of the supervision system; improved the powers and procedure for local regulations and rules; and improved the system for recording and review. A number of drafting changes and consequential adjustments were also made, and the order of individual articles was rearranged.

2. Measures for the Administration of Related-Party Transactions of Financial Holding Companies

Published 1 February 2023 / in force 1 March 2023

The Measures have seven chapters and 48 articles: general provisions, the related parties of a financial holding company, related-party transactions within a financial holding group, internal management, reporting and disclosure, supervision and administration, and supplementary provisions. They make clear that a financial holding company bears primary responsibility for managing related-party transactions across the group, that it is to regulate dealings within the group and that, having put its own house in order, it is to guide and press its subsidiaries to manage their related-party transactions, and to manage the group's external related-party transactions and risk exposures as a whole.

3. Measures for the Administration of the Privately Offered Asset Management Business of Securities and Futures Operating Institutions

Published 12 January 2023 / in force 1 March 2023

The revision makes four main changes. First, the securities regulator is to apply differentiated supervision to the private asset management business of operating institutions on the principle of prudential regulation. Second, regulation and liberalisation go together, so that private equity asset management can better serve the real economy: the rules on instalment contributions, subsequent fundraising, the charging of expenses and portfolio investment are optimised to suit the character of early-stage and small-scale investment, while conduct such as debt in the guise of equity is expressly to be prevented. Third, the flexibility of product investment is increased to meet market demand, including by improving the limit on the number of investors in a collective asset management plan and by allowing futures companies rated AA in each of the last two years to invest in over-the-counter derivatives and other non-standard assets. Fourth, risk control is further improved, including through limits on the leverage of private asset management plans, tighter management of reverse repo transactions and stronger rules on related-party transactions.

4. Trial Measures for the Administration of Overseas Securities Offering and Listing by Domestic Companies

Published 17 February 2023 / in force 31 March 2023

The Trial Measures and the accompanying regulatory guidelines make changes on three fronts.

First, the negative list is improved. Following the principle of taking only what is minimal and necessary, and focusing on major compliance problems within China, the circumstances in which an overseas offering and listing is not permitted are refined, matters that investors should judge for themselves are left to the market, and no additional thresholds or conditions are imposed on overseas listing. Second, the scope of regulation is drawn sensibly. The standard for an indirect overseas listing is made clearer and defined reasonably on the principle that substance prevails over form, so that gaps in regulation are reduced without regulation becoming diffuse. Third, the filing requirements are set out in more detail. Taking account of overseas financing practice, the requirements differ according to the type of offering or listing, which lightens the burden on companies. The filing process is aligned with overseas practice, and the procedure for tranched offerings and other common forms of overseas financing is improved, so that companies' financing is not slowed.

5. Measures for the Administration of Consumer Rights Protection by Banking and Insurance Institutions

Published 26 December 2022 / in force 1 March 2023

The Measures make clear that banking and insurance institutions bear primary responsibility for protecting consumers' lawful rights, and that consumers have a duty of honesty and good faith. They regulate the conduct of those institutions so as to protect eight basic consumer rights, covering product design, disclosure of information and sales conduct, prohibiting misleading publicity, forced bundling, unreasonable charges and the like, and protecting consumers' right to be informed, to choose for themselves and to fair dealing.

6. Measures for the Administration of Work-Relief

Published 10 January 2023 / in force 1 March 2023

The Measures set out the management system and working mechanism of work-relief, under which the central government coordinates, the provinces take overall responsibility and cities, counties and townships see that it is done. They define the scope of the policy, those it is meant to benefit, the fields of construction and the models of relief, stress the policy objectives of paying wages to the people who work on the projects and providing skills training, and set out in more detail the requirements for investment plans, for the management of earmarked funds and for supervision and inspection. They add provisions on applying work-relief to major government-invested projects and on extending it to agricultural and rural infrastructure.

7. Interim Measures for the Supervision and Administration of the Quality and Safety of Food-Related Products

Published 8 October 2022 / in force 1 March 2023

The Measures set out the primary responsibility of producers and sellers of food-related products and the specific requirements for control of the whole production process. They establish a traceability system, a recall system and a system for labels and marks, and provide for a closed loop of supervision covering licensing beforehand, inspection during production and punishment afterwards. They create a strict liability regime, and where existing law does not yet provide for a penalty, they add one for breach of the prohibition on particular raw materials, for breach of the management rules and for the handling of accidents.

8. Provisions on the Supervision and Administration of Marketing Authorisation Holders' Implementation of their Primary Responsibility for Drug Quality and Safety

Published 29 December 2022 / in force 1 March 2023

The Provisions have six chapters and 35 articles and cover three matters. They set out the requirements for bodies and personnel: a holder is to establish a management body suited to the scale of its production and operations, and the responsibilities of key posts such as the person in charge of the enterprise and the qualified person for quality are set out in more detail. They stress supervision of quality across the whole process: a holder is to establish a quality management system covering the entire production process. And they establish a quality management mechanism for the holder, setting out the specific duties of quality managers at each level for preventing and controlling quality risk, and establishing a training system for everyone engaged in research and development management, production management, quality management, sales management, pharmacovigilance and post-marketing study.

9. Provisions on the Supervision and Administration of Enterprises' Implementation of their Primary Responsibility for Cosmetic Quality and Safety

Published 29 December 2022 / in force 1 March 2023

The Provisions set out the framework of the enterprise's primary responsibility for quality and safety and the requirements that go with it, guide the quality and safety managers in key posts to discharge their duties, and establish a mechanism for managing, supporting and rewarding the discharge of those duties. They require an enterprise to establish and operate, in the light of its own circumstances, dynamic risk control mechanisms covering the review of registration and filing materials for cosmetics, the review of production consistency, batch-by-batch release of products, self-inspection on stated grounds and self-inspection of the quality management system, and they give the person responsible for quality and safety a veto in dealing with major quality and safety risks.

10. Measures for the Administration of Soil and Water Conservation Plans for Construction Projects

Published 17 January 2023 / in force 1 March 2023

The Measures are divided into seven chapters and 34 articles: general provisions, preparation and approval, implementation of the plan, acceptance of the facilities, supervision and inspection, penalties, and supplementary provisions. They define the content and scope of a soil and water conservation plan, require the construction unit to carry out the design and construction of soil and water conservation at the same time and in accordance with the approved plan, and set out the requirements for acceptance of the facilities. On supervision and inspection, they set out the supervision of the approval of plans, supervision during and after implementation, credit supervision and the duty to correct.

11. Measures for the Administration of Quality Testing of Construction Projects

Published 29 December 2023 / in force 1 March 2023

The Measures strengthen the management of quality testing of construction projects, maintain order in the testing market and regulate testing conduct, by adjusting the scope of testing, strengthening dynamic management of qualifications, regulating testing activity, improving the system of responsibility for testing, raising the level of digital application, strengthening government supervision and increasing penalties for breaches.

12. System for Eliminating Sexual Harassment in the Workplace (Model Text)

Released on 8 March 2023 jointly by the Ministry of Human Resources and Social Security, the National Health Commission and four other departments

The model text has 20 articles. The general provisions define sexual harassment as conduct that, against the will of another person, causes that person discomfort by prompting associations of a sexual nature, whether through words, expressions, gestures, writing, images, video, voice, links or any other means, and whether or not the person responsible had a harassing or other improper purpose or intent.

The specific provisions set out the main forms the conduct takes and deal with public commitments, publicity and training, complaints by employees, investigation and handling, and the participation of trade unions in supervision. The text also instructs employers to keep complainants and the handling of a case confidential, to protect personal privacy and, by such steps as adjusting work assignments, to avoid causing further harm to the person affected.

13. System for the Special Protection of Women Employees in the Workplace (Model Text)

Released on 8 March 2023 jointly by the Ministry of Human Resources and Social Security, the National Health Commission and four other departments

The text has 26 articles and lists, item by item, protection in employment, in wages and benefits, in maternity and in occupational safety and health. To keep normal production in the workplace, it also gives guidance on the procedure to be followed.

Shanghai

1. Regulations of Shanghai Municipality on the Building of a Barrier-Free Environment

Published 15 January 2023 / in force 1 March 2023

The Regulations make clear the leadership duties and primary responsibility of the municipal and district governments, require the establishment of a coordination mechanism for building a barrier-free environment, and set out in detail the duties of the departments for housing and urban-rural development, transport, economy and information technology, and civil affairs, among others. They set out the requirements for building and maintaining barrier-free facilities, list in a number of respects the requirements for improving the quality of barrier-free social services, and encourage and support joint social governance and supervision by all concerned.