CMB Introduces Approval Requirement For Off-Exchange Share Sales

The Capital Markets Board (“CMB“) has introduced new rules governing off-exchange share sales by certain major and privileged shareholders of publicly traded companies. Accordingly, shareholders intending to transfer or sell shares or voting rights in excess of the prescribed thresholds will be required to prepare a share sale information form and submit it to the CMB for approval prior to the transfer.

The rules apply to the shareholders specified in Article 27 of the Communiqué on Shares No. VII-128.1. These comprise (i) shareholders who, individually or together with persons acting in concert, directly hold more than 20% of the share capital of a company whose shares are traded on the exchange, and (ii) shareholders holding privileged shares that confer the right to appoint or nominate at least one member of the board of directors at the general assembly, irrespective of their shareholding ratio.