China's securities regulator set up a new committee to oversee mergers and acquisitions (M&A) of listed companies, in an effort to eliminate insider trading and guarantee transparency in government approval of listed companies' M&A activities.

The M&A activities that would need examination from the new committee include key assets restructuring moves, the issuance of new shares and the purchase of assets from specified parties, and the merger and separation of listed companies, according to a new regulation published on the website of the China Securities Regulatory Commission (CSRC) on Monday.

But the approval power remained in the hands of the commission itself.

The new committee will be composed of 25 commissioners appointed by CSRC, including five professionals with CSRC. Each commissioner is appointed for one year, and can be re-appointed for no more than three terms.

The committee will check the M&A applications from listed companies, examine the materials and opinions provided by financial advisors, accounting firms, law firms and assets evaluation organizations, and review the trial examination reports issued by CSRC departments.

The securities regulator also specified detailed requirements of listed companies that initiate major assets restructuring activities, ordering that the relevant information be disclosed accurately, timely and fairly, in a bid to rule out insider trading.

According to today's Shanghai Securities News, CSRC yesterday issued new draft rules governing major asset restructuring by listed companies.

The rules define major restructuring as restructuring that involves the sale or purchase of assets accounting for over 50 percent of a listed firm's total assets or core revenue generation.

Such restructuring now requires the approval of over two-thirds of a listed companies' shareholders. Previously, 50 percent was the requirement.

(Xinhua News Agency and China Daily September 18, 2007)