CSRC issues new transitional arrangements for the implementation of supplementary institutional rules for the revised Companies Law.

On December 27, the China Securities Regulatory Commission issued a notice regarding the transitional arrangements related to the implementation of the new "Company Law" supporting system rules. It mentioned that, starting from January 1, 2026, for companies applying for initial public offerings (IPOs) that still have a board of supervisors or supervisors, they should formulate a plan to adjust the internal supervisory mechanism to ensure that before listing, according to the provisions of the "Company Law" and the "Implementation Regulations," the company's articles of association should stipulate the establishment of an audit committee in the board of directors to exercise the powers of the board of supervisors defined by the Company Law, without having a board of supervisors or supervisors. Before January 1, 2026, listed companies should, in accordance with the "Company Law," "Implementation Regulations," and relevant rules and regulations of the CSRC, stipulate the establishment of an audit committee in the board of directors in their articles of association to exercise the powers of the board of supervisors defined by the Company Law, without having a board of supervisors or supervisors. Before adjusting the internal supervisory mechanism of the company, the board of supervisors or supervisors should continue to comply with the provisions of the CSRC's original system rules regarding the board of supervisors or supervisors.