The Operational Guidelines for Investorson the B-to-A-Stock Account Conversionwith regard to the Stock-for-Stock Merger
of Wuxi Little Swan Company Limited
by Midea Group Co., Ltd.and the Related-Party Transaction
May 2019
Explanation about the Amendments
As per the Reply of the Foshan Central Sub-Branch of the State Administration ofForeign Exchange on the Foreign Exchange Affairs in Midea Group Co., Ltd.’sMerger with Wuxi Little Swan Company Limited in a Share Swap via A-shareOffering (F.H.F [2019] No. 1) issued on 22 April 2019, for any Little Swan foreigninvestor with A-shares of the Midea Group stock through the share swap who wishesto remit abroad their A-share dividends and proceeds from the reduction of suchshareholdings in any foreign currency, they shall proceed according to the Notice ofthe General Office of the People's Bank of China on the Issues concerning theOpening and Foreign Exchange Administration of Accounts of Foreign Shareholdersof A-share Listed Companies for Shareholding Reduction and Dividends (Y.B.F [2009]No. 178).As per the aforesaid F.H.F [2019] No. 1 Document and the Y.B.F [2009] No. 178Document, as well as the communications with the foreign exchange administrationand all the other parties concerned, we would like to draw investors’ attention to theamendments and explanations hereby given with regard to the foreign exchange andremittance application procedure for any foreign institutional investor as mentioned inthis Operational Guidelines, either trading domestically or overseas, who wishes toremit abroad their A-share dividends and proceeds from the reduction of suchshareholdings in any foreign currency in the future.
Special Notes
The scheme on stock-for-stock merger of Wuxi Little Swan Company Limitedby Midea Group Co., Ltd. through the listing of A-shares and the associatedtransactions has been reviewed and approved by the General Meeting ofShareholders of Midea Group Co., Ltd. and Wuxi Little Swan Company Limitedrespectively on 21 December 2018. On 12 March 2019, China SecuritiesRegulatory Commission issued the Official Reply on Approval ofStock-for-stock Merger of Wuxi Little Swan Company Limited by Midea GroupCo., Ltd. (Z.J.X.K [2019] No. 352).After the foreign investors of Little Swan are converted into A-shareholders ofMidea Group, the allocation of the relevant special A-share accounts, theopening of capital accounts, as well as the foreign exchange and remittanceprocedure for dividends and proceeds from shareholding reduction becomecomplicated. In particular, it will require more materials, as well as a longertime and procedure for a foreign institutional investor to exchange currenciesand remit the relevant funds abroad. If the foreign institutional investor fails toprovide all the required materials for outward remittance, the remittance maynot be able to be made in time. Therefore, foreign investors are kindlyreminded to pay attention to the relevant risks.In order to ensure smooth implementation of this stock-for-stock merger and to guidethe securities companies and investors to complete the operation businesses ofaccount conversion related to the transfer from Little Swan’s B-shares to MideaGroup’s A-shares, the Operational Guidelines have been prepared based on
communications and discussions among all related parties.Part of basic procedures concerning this account conversion, such as the withdrawalregistration of B-shares and initial registration of A-shares, will be further defined byrelevant regulatory organizations or executive organizations by issuing documents ornotices. This Operational Guidelines just serve as general description and the specificoperational procedures shall be subject to the documents or notices issued by relevantregulatory organizations or executive organizations.This Operational Guidelines are prepared in both Chinese and English. In case of anydiscrepancy, the Chinese version shall prevail.
Contents
Explanation about the Amendments ...... 1
Special Notes ...... 2
Contents ...... 4
Part I: Business Notice ...... 7
I. Classification of B-share Investors ............................................................................. 7
II. Classification of Investors of Operational Guidelines............................................. 8
III. Comparison Table of Main Differences between B-shares and A-shares .......... 10
Part II Operational Guidelines for Investors ...... 12
Chapter I Domestic Individual Investor ...... 12
Section I Business-related Organizations ...... 14Section II Determine the Securities Account and Custody Unit of A-shares of MideaGroup ...... 15
Section III Transfer Registration Restricted Account ...... 17
Section IV Trading Cost ...... 21
Section V Inquiry Business ...... 22
Section VI Change of Account Information ...... 23
Section VII General Meeting of Shareholders ...... 24
Section VIII Allotment of Shares ...... 25
Section IX Cancellation of Transfer Registration Restricted Account ...... 26
Section X Pledge, Freezing and Non-trading Transfer of Account ...... 27
Chapter II Foreign Individual Investor for Domestic Transactions ...... 28
Section I Business-related Organizations ...... 30Section II Determine the Securities Account and Custody Unit of A-shares of MideaGroup ...... 31
Section III Transfer Registration Restricted Account ...... 33
Section IV Trading Cost ...... 37
Section V Inquiry Business ...... 39
Section VI Change of Account Information ...... 40
Section VII General Meeting of Shareholders ...... 41
Section VIII Allotment of Shares ...... 42
Section IX Cancellation of Transfer Registration Restricted Account ...... 43
Section X Pledge, Freezing and Non-trading Transfer of Account ...... 44
Chapter III Foreign Institutional Investor for Domestic Transactions ...... 45
Section I Business-related Organizations ...... 47Section II Determine the Securities Account and Custody Unit of A-shares of MideaGroup ...... 48
Section III Transfer Registration Restricted Account ...... 50
Section IV Trading Cost ...... 56
Section V Inquiry Business ...... 58
Section VI Change of Account Information ...... 59
Section VII General Meeting of Shareholders ...... 60
Section VIII Allotment of Shares ...... 61
Section IX Cancellation of Transfer Registration Restricted Account ...... 62
Section X Pledge, Freezing and Non-trading Transfer of Account ...... 63
Chapter IV Foreign Individual Investor for Non-domestic Transaction ...... 64
Section I Business-related Organizations ...... 66Section II Determine the Securities Account and Custody Unit of A-shares of MideaGroup ...... 67
Section III Transfer Registration Restricted Account ...... 69
Section IV Trading Cost ...... 74
Section V Inquiry Business ...... 76
Section VI Change of Account Information ...... 77
Section VII General Meeting of Shareholders ...... 78
Section VIII Allotment of Shares ...... 79
Section IX Cancellation of Transfer Registration Restricted Account ...... 80
Section X Pledge, Freezing and Non-trading Transfer of Account ...... 81
Chapter V Foreign Institutional Investor for Non-domestic Transaction ...... 82
Section I Business-related Organizations ...... 85Section II Determine the Securities Account and Custody Unit of A-shares of MideaGroup ...... 87
Section III Transfer Registration Restricted Account ...... 89
The capitalizing of common reserves, registration of bonus shares and dividenddistribution relating to the shares in the transfer registration restricted account shall behandled by reference to the existing normal A-share account. ........................................ 96
Section IV Trading Cost ...... 97
Section V Inquiry Business ...... 99
Section VI Change of Account Information ...... 100
Section VII General Meeting of Shareholders ...... 101
Section VIII Allotment of Shares ...... 102
Section IX Cancellation of Transfer Registration Restricted Account ...... 103
Section X Pledge, Freezing and Non-trading Transfer of Account ...... 104Declaration Table for the Corresponding Relationship between the SecuritiesAccount and Custody Unit of A-shares and the Securities Account and Custody Unitof B-shares ...... 105
Declaration for the Securities Account and Custody Unit of B-share Investors ofNon-domestic Transaction of Little Swan ...... 106
Part I: Business Notice
As many types of investors are involved in this stock-for-stock merger of Little Swanby Midea Group and the business operations relating to the account conversion ofdifferent investors vary, in order to guarantee that all types of investors can conducttransactions smoothly after Little Swan’s B-shares are converted into Midea Group’sA-shares, we hope that investors can carefully read the following instructions on thetype of investors, confirm which one you fall into and read corresponding part in PartII “Operational Guidelines for Investors” herein to complete account conversion andsubsequent business operations.
I. Classification of B-share InvestorsInvestor is classified into domestic investor, foreign individual investor for domestictransaction, foreign institutional investor for domestic transaction, foreignindividual investor for non-domestic transaction and foreign institutional investorfor non-domestic transaction in accordance with the identity type of the investor,declaration ways for future transactions, as well as foreign exchange and outboundremittance paths.
| Type of Investor | Standard of Classification |
| Domestic individual investor | The domestic individual investor who opens a B-share securities account in domestic securities company and conducts transaction through the transaction system of domestic securities company. |
| Foreign individual investor for domestic transaction | The foreign individual investor who opens a B-share securities account in domestic securities company and conducts transaction through the transaction system of domestic securities company. |
| Foreign institutional | The foreign institutional investor who opens a B-share |
| investor for domestic transaction | securities account in domestic securities company and conducts transaction through the transaction system of domestic securities company. |
| Foreign individual investor for non-domestic transaction | The foreign individual investor who opens an independent B-share securities account in foreign broker and conducts transaction through the foreign broker. |
| Foreign institutional investor for non-domestic transaction | The foreign institutional investor who opens an independent B-share securities account in foreign broker and conducts transaction through the foreign broker. |
II. Classification of Investors of Operational GuidelinesAccount conversion procedures and subsequent operations involved in thisstock-for-stock merger of Little Swan by Midea Group are classified and operated inaccordance with the types of investor shown below. After confirming the type ofB-share securities account, investor can understand his/her own type in accordancewith the following standards of classification and accordingly read correspondingcontents of this Guideline to operate this account conversion business:
| Type of Investor | Standard of Classification | Corresponding Contents of Operational Guidelines |
| Domestic individual investor | The domestic individual investor who opens a B-share securities account in domestic securities company and conducts transaction through the transaction system of domestic securities company. | Part II “Chapter I Domestic Individual Investor” |
| Foreign individual investor for domestic transaction | The foreign individual investor who opens a B-share securities account in domestic securities company and conducts transaction through the transaction system of domestic securities company. | Part II “Chapter II Foreign Individual Investor for Domestic Transaction” |
| Foreign institutional investor for domestic transaction | The foreign institutional investor who opens a B-share securities account in domestic securities company and conducts transaction through the transaction system of domestic securities company. | Part II “Chapter III Foreign Institutional Investor for Domestic Transaction” |
| Foreign individual investor for non-domestic transaction | The foreign individual investor who opens an independent B-share securities account in foreign broker and conducts transaction through the foreign broker. | Part II “Chapter IV Foreign Individual Investor for Non-domestic Transaction” |
| Foreign institutional investor for non-domestic transaction | The foreign institutional investor who opens an independent B-share securities account in foreign broker and conducts transaction through the foreign broker. | Part II “Chapter V Foreign Institutional Investor for Non-domestic Transaction” |
III. Comparison Table of Main Differences between B-shares and A-shares
| Contents of Comparison | B-shares | A-shares |
| Trading date | Monday to Friday, trading suspended on Saturday, Sunday and national holidays | Monday to Friday, trading suspended on Saturday, Sunday and national holidays |
| Way of order quotation | Market order: The quotation is made at the market price and the declaration can only be made during continuous trading hours | Market order: The quotation is made at the market price and the declaration can only be made during continuous trading hours |
| Limit order: The quotation is made at a specified price | Limit order: The quotation is made at a specified price | |
| The trade declaration is processed by the system of exchange before opening | 9:15 to 9:20: Accept the trade declaration and the cancellation | 9:15 to 9:20: Accept the trade declaration and the cancellation |
| 9:20 to 9:25: Accept the trade declaration, but do not accept the declaration of cancellation | 9:20 to 9:25: Accept the trade declaration, but do not accept the declaration of cancellation | |
| 9:25 to 9:30: Accept the trade declaration and the declaration of cancellation, but do not process it | 9:25 to 9:30: Accept the trade declaration and the declaration of cancellation, but do not process it | |
| Continuous trading hours | 9:30 to 11:30 and 13:00 to 14:57 | 9:30 to 11:30 and 13:00 to 14:57 |
| Stage of closing call auction | 14:57 to 15:00 | 14:57 to 15:00 |
| Minimum declared quantity of buying for single transaction | 100 shares | 100 shares |
| Quantity sold less than the | Zero share, one-off sale | Zero share, one-off sale |
| minimum declared quantity for single transaction | declared | declared |
| Minimum fluctuating price | HKD 0.01 | RMB 0.01 |
| Limit of price change | 10% | 10% |
| Rotary trading day | T+1 day | T+1 day |
| Settlement system | T+3 day | Shares are delivered on the T + 0 day, while the fund is delivered on the T + 1 day |
| Margin trading | None | Yes |
The above differences are concluded only by making comparison between theB-shares and A-shares, which are not applicable to the all the investors after LittleSwan’s B-shares are converted into Midea Group’s A-shares. Different businessoperations apply to different types of investors. For details, please refer tocorresponding contents in the Part II herein.
Part II Operational Guidelines for Investors
Chapter I Domestic Individual Investor
In order to guarantee that investors can conduct transactions smoothly after LittleSwan’s B-shares are converted into Midea Group’s A-shares, the domestic individualinvestors, to which this Chapter is applicable, shall fully understand and confirm thematters shown below:
1. With respect to the investor who holds Midea Group’s A-shares as the shares arenot sold on the last trading day of Little Swan’s B-shares and fails to validly declarethe cash option, sale of shares in future will be liquidated by RMB and settled byRMB finally;2. With respect to the B-share investor who has not declared an A-share account as at30 May 2019, CSDC shall allocate one transfer registration restricted account whichonly can make the sell order declaration but cannot make the buy order declaration.Investors shall fully understand the restrictions on trading;3. It is required that the investor who is allocated the transfer registration restrictedaccount shall handle formalities relating to third party custody in the securitiescompany in accordance with the requirements of the A-shares securities at the time ofopening account;4. Investor shall confirm that he/she is the investor, to which this Chapter is applied,otherwise, potentially, relevant contents of this Operational Guidelines are notcomplete applicable;5. Investors shall fully understand the differences of trading rules and expensesbetween B-shares and A-shares;6. The stock code of trade declaration of Midea Group’s A-shares is “000333” andname of securities is “Midea Group”;7. Investors shall continuously pay attention to relevant announcements issued byLittle Swan and Midea Group and learn the progress of this stock-for-stock merger;8. Investors may inquire of the securities company where transactions of B-share
securities account are made about the specific ways of business operation relating tothe account conversion.
Section I Business-related Organizations
| Full name of organization | Abbreviation in this Guidelines | Main relevant matters |
| Midea Group Co., Ltd. | Midea Group | Information disclosure |
| Wuxi Little Swan Company Limited | Little Swan, Littleswan-B | Information disclosure |
| China Securities Depository and Clearing Corporation Limited | CSDC | Allocation of transfer registration restricted account |
| Shenzhen Stock Exchange | SZSE | Restrictions on buy order declaration of transfer registration restricted account |
| Domestic securities companies | Domestic securities companies | Handle all business applications of investors and consultation, communication and notice; assist investors in opening common A-share securities account, A-share securities account and assist investors to complete the handling formalities of third party custody meanwhile. |
Section II Determine the Securities Account and Custody Unit of A-shares of
Midea GroupAs Littleswan-B investors’ existing B-share accounts cannot be directly convertedinto accounts of Midea Group A-shares, and SZSE implements the shares custodytransfer trading system, one investor may have more than one custody units under onesecurities account. The securities account and custody unit of A-shares of MideaGroup will be determined in accordance with the principles shown below after stockconversion:
1. After asking for the advices of investors, the domestic securities company whichserves as the custody unit of Littleswan-B shares shall declare the securities accountand custody unit of A-shares for each investor of Littleswan-B shares before 30 May2019, which shall ensure investors can normally trade the A-shares of Midea Group.A-shares of Midea Group will be held in the declared securities account of A-sharescorresponding to the original securities account of B-shares after Littlewan-B sharesare converted into A-shares of Midea Group. A-shares of Midea Group will be held incustody in the declared custody unit of A-shares corresponding to the original custodyunit of B-shares after Littleswan-B shares are converted into A-shares of Midea Group.The mistaken declaration information on the securities account and custody unit ofA-share, if any, may result in that investors are unable to normally register or sellA-share obtained after Littleswan-B shares are converted into A-shares of MideaGroup, please check and ensure the information declared to be correct.Manners to declare securities account and custody unit: Please complete theDeclaration Table for the Corresponding Relationship between the Securities Accountand Custody Unit of A-shares and the Securities Account and Custody Unit ofB-shares (refer to Appendix 1 for details) and send the following documents to
sndd@citics.com:
1) Copy and paste the completed Declaration Table in the body of the message;2) Print and seal the completed Declaration Table, and send the scanned copy as anattachment of the message.
At the time of declaration, please completely declare the information on the securitiesaccount and custody unit of A-shares corresponding to the securities account andcustody unit of B-shares. In case the information on the corresponding relationshipwould be declared for more than one times, the full declaration information which isreceived last by our company will prevail.2. Where the securities account of A-shares fails to be declared before the designateddeadline, A-shares will be transferred to the transfer registration restricted accountdesignated by CSDC. For details, please refer to “Section III Transfer RegistrationRestricted Account” in this chapter. Where the custody unit of A-shares fails to bedeclared before the designated deadline, A-shares will be transferred to the custodyunit designated by CITIC Securities, and investor may contact the CITIC Securitiesdirectly to handle custody transfer or make transaction directly.If there are any questions, please contact Shennan Avenue Business Department ofCITIC Securities Co., Ltd.Contact information relating to the consultation and business of CITIC Securities:
Contact person: Shennan Avenue Business Department of CITIC Securities Co., Ltd.Address: Room 301A, Tower A, Xinian Center, No. 6021, Shennan Avenue, FutianDistrict, ShenzhenTel.: 86-0755-83477942 (He Ying)86-0755-83477944 (Luo Yixi)86-0755-83477915 (Yang Zheng)86-0755-83477941 (Shao Qicong)Fax: 86-0755-83459951Email: sndd@citics.com
Section III Transfer Registration Restricted AccountI. Allocation of transfer registration restricted account and third-party depositorybusiness handlingWith respect to the domestic individual investor who has not declared an A-sharesecurities account, Midea Group will apply to CSDC for allocating one transferregistration restricted account to the aforesaid investor free of any charge inaccordance with the information of B-share securities account. As this securitiesaccount is restricted, only the sell order declaration can be made and other purposesare forbidden.During the course to allocate the transfer registration restricted account, investorsneed not carry out any extra operation. After the transfer registration restrictedaccount is allocated, the securities company will notify investors of relevant mattersconcerning the allocation of transfer registration restricted account by network,telephone, text message, announcement in places of business, etc. Businessdepartment of each securities company will assist the investor in opening the transferregistration restricted account, and investor is required to handle the third-partydepository formalities for the transfer registration restricted account in the businessdepartment of securities account before making subsequent sell order transactionsrelating to the transfer registration restricted account.Investor is required to sign the third-party depository agreement and handle thethird-party depository formalities relating to the fund account in accordance withrelevant regulations concerning third-party depository business of fund accountspecified by the securities company. The general handling procedures are that thesecurities company sends the pre-designated information relating to the fund accountwith RMB settlement function to the third-party depository bank, investor handlesthird-party depository formalities of fund account in the business branch of depositorybank and then the third-party deposit of investor’s fund account is achieved. Investormay inquire of the securities company where transactions of B-share securitiesaccount are made about the specific procedures for business handling and required
information.After the transfer registration restricted account is allocated, investor may inquire ofthe securities company which designates the custody unit of A-shares for him/her byinquiry counter, telephone, online trading system, etc. If there is no custody unit ofA-shares designated for investor, he/she may inquire of CITIC Securities Co., Ltd byinquiry counter, telephone, online trading system, etc.II. Way of orderAfter the listing of A-shares of Midea Group, way of sell order relating to theinvestor’s transfer registration restricted account will be declared in the way of orderthat investor has applied to the business department of securities company wheretransactions of transfer registration restricted account are made to open; where theonline trading order has been opened, investor may login in the online trading systemthrough the account number and trading password of the transfer registrationrestricted account, inquire about the remaining A-shares of Midea Group and fundbalance of transfer registration restricted account and make sell order declaration.III. Real-time market situationInvestor may obtain the real-time market situation and information of and suspensionand resumption of trading relating to the A-shares of Midea Group through theexisting market situation display channel and way of the securities company wheretransactions of transfer registration restricted account are made, such as on-siteself-service terminal of business department, online trading client terminal, etc.IV Main trading rulesStock code of sell order declaration of A-shares of Midea Group is “000333” andname of securities is “Midea Group”. The way of sell order declaration is basicallysame as the operation of B-shares.(I) Limit of changeA-shares shall not increase or decrease by 10% from the closing price of last tradingday within trading hours that day.Limit of change on ST shares and the shares that split share structure reform has notbeen finished is 5%.
(II) Rotary trading systemThe T + 1 rotary trading system is implemented for the A-shares, namely, the sharesbrought that day can be sold in the following day. The investor relating to the transferregistration restricted account is only allowed to make the sell order declaration, so therotary trading is not applicable.
(III) Trading unitThe transfer registration restricted account can only make the sell order and thedeclared quantity shall be 100 shares or its integral multiple. One-off sale declarationshall be made for the remaining shares less than 100 shares.(IV) Minimum fluctuating priceMinimum fluctuating unit of declared price of A-shares is RMB 0.01.(V) Trading hoursMonday to Friday (excluding the national holidays and day of suspension of tradingstipulated by exchange);9:15 to 9:25 of each trading day is the stage of opening call auction, wherein:
9:15 a.m. to 9:20 a.m.: Accept the trade declaration and the cancellation9:20 a.m. to 9:25 a.m.: Accept the trade declaration, but do not accept the declarationof cancellationThe order that is not made during the call auction will automatically enter into thecontinuous auction;From 9:30 to 11:30 and from 13:00 to 14:57 of each trading day is the time ofcontinuous auction;14:57 to 15:00 is the stage of closing call auction.V. Liquidation and settlementSame rules are applied in transfer registration restricted account and ordinary A-sharesecurities account and shares are liquidated and settled on the T + 0 day, which meansthat the quantity of shares equal to the quantity of shares sold and concluded that day(T day) by the investor will be decreased in the securities account that day; the fund issettled on the T + 1 day, which means that the investor can withdraw the fundobtained from the sale of shares that day (T day) in the following trading day (T + 1
day).VI. Payment of fundAs the fund account with RMB settlement function has been opened and thethird-party depository formalities have been handled in accordance with the currentaccount opening requirements relating to the A-share securities account when thetransfer registration restricted account of investors is opened, the investor maytransfer and withdraw the fund obtained from the sale of shares through thethird-party depository bank of A-shares on the T + 1 day.Investor cannot complete the sell order of A-shares of Midea Group through thetransfer registration restricted account until the transfer registration restricted accounthas been opened in the securities company where transactions of transfer registrationrestricted account will be made and third-party depository formalities have beenhandled, so the investor needs to handle relevant business formalities in the businessdepartment of securities company as early as possible.VII. Capitalizing of common reserves, bonus shares and dividend distributionThe capitalizing of common reserves, registration of bonus shares and dividenddistribution relating to the shares in the transfer registration restricted account shall behandled by reference to the existing normal A-share account.VIII. Differentiated dividend taxCalculation and withholding of differentiated dividend tax are handled in accordancewith the existing business rules.
Section IV Trading CostTrading cost relating to the investor who has established association relationshipbetween the subaccount of A-shares and subaccount of B-shares and the investor whois allocated the transfer registration restricted account is same as the currenttransaction cost of ordinary A-share securities account.
| Name of Trading Cost | Rate | Ordinary B-share Securities Account | Ordinary A-share Securities Account | Transfer Registration Restricted Account |
| Commission for domestic account opening securities company | Refer to original transaction commission of A-share or B-share | √ | √ | √ |
| Stamp tax | 0.1% (only charge the seller) | √ | √ | √ |
| Liquidation expense | 0.05% (charged based on the trading amount) | √ | ||
| Handling fee | 0.0487‰ of the trading amount(charge the buyer and seller) | √ | √ | √ |
| Registration and transfer fee | 0.02‰ of the trading amount(charge the buyer and seller) | √ | √ | |
| Supervision fee | 0.02‰ of the trading amount(charge the buyer and seller) | √ | √ | √ |
Section V Inquiry BusinessAfter Littleswan-B shares are converted into A-shares of Midea Group, the investorwho has established one password association relationship between the subaccount ofA-shares and subaccount of B-shares may inquire about the remaining securities inthe account and balance of fund in the current inquiry way relating to the securitiesaccount in the securities company where transactions of A-share securities account aremade; The investor who is allocated the transfer registration restricted account maymake an inquiry in the current inquiry way relating to the securities account in thesecurities company where transactions of transfer registration restricted account aremade.In addition, all investors may obtain all the disclosed information relating to thisstock-for-stock merger on the website of SZSE (http://www.szse.cn/).
Section VI Change of Account InformationThe information relating to the transfer registration restricted account is copied fromcurrent information of investor’s B-share securities. The investor whose identityinformation is changed is required to contact the securities company promptly, whichis required to promptly handle the information change to the B-share securitiesaccount and transfer registration restricted account to ensure consistency.
Section VII General Meeting of ShareholdersInvestors may attend the General Meeting of Shareholders and make the voting on thescene in person or by proxy. With respect to the investors who intends to be present atthe meeting, at the day of General Meeting of Shareholders, individual investors shallhold stock account card (the investors allocated the transfer registration restrictedaccount may only hold the original B-share securities account card), personal ID cardor other valid certificates or paper of identification that can prove the identity);representative of institutional investors shall hold the stock account card (the investorsallocated the transfer registration restricted account may only hold the originalB-share securities account card) and certificate provided by the unit of shareholderwhen attending the General Meeting of Shareholders. Agent shall also present thepower of attorney and valid personal ID.After the custody relationship for the transfer registration restricted account has beenestablished and third-party depository formalities have been handled, investors maymake the online voting in accordance with the current voting procedures for theordinary A-share securities account.
Section VIII Allotment of SharesBefore foreign residents can subscribe A-shares, or foreign residents sell all A-sharesof Midea Group held by them, Midea Group will take the fact that the part of tradingrights relating to the A-share securities account are restricted with extreme cautionand fully consider fairness of participation right of various investors when handlingrelevant matters including allotment of shares.
Section IX Cancellation of Transfer Registration Restricted AccountWhen remaining A-shares of Midea Group in the transfer registration restrictedaccount of an investor is zero, the securities company where transactions of transferregistration restricted account are made may cancel the transfer registration restrictedaccount.
Section X Pledge, Freezing and Non-trading Transfer of Account1. Pledge, non-trading transfer business: are handled in accordance with relevantbusiness rules of CSDC.2. Judicial business: is implemented with assistance provided by each securitiescompany and CSDC.
Chapter II Foreign Individual Investor for Domestic Transactions
In order to guarantee that investors can conduct transactions smoothly after B-shares ofLittle Swan are converted into A-shares of Midea Group, the foreign individualinvestors for domestic transactions, to which this Chapter is applicable, shall fullyunderstand and confirm the matters shown below:
1. With respect to the investor who holds the A-shares of Midea Group as the shares arenot sold on the last trading day of Little Swan B-shares and fails to validly declare thecash option, sale of shares in future will be liquidated by RMB and settled by HKDfinally by each securities company after purchasing foreign exchange through theforeign exchange purchase bank, and the exchange rate when purchasing foreignexchange uses the selling price of spot exchange of RMB to HKD on the day when theforeign exchange purchase bank purchasing foreign exchange;2. With respect to the foreign individual investors for domestic transactions, to whichthis chapter is applicable, “Section II Determine the Securities Account and CustodyUnit of A-shares of Midea Group” of this chapter can be referred to for declaring anavailable A-share account (if any). If there is no A-shares account or no declaration,Midea Group shall apply to CSDC to allocate one transfer registration restrictedaccount which only can be used to make the sell order declaration and shall not beused for other purposes. Relevant investors shall fully understand the restrictions ontrading;3. Investor shall confirm that he/she is the investor, to which this Chapter is applied,otherwise, potentially, relevant contents of this Operational Guidelines are notcomplete applicable;4. Investors shall fully understand the differences of trading rules and expensesbetween B-shares and A-shares;5. The stock code of trade declaration of A-shares of Midea Group is 000333 and nameof securities is “Midea Group”;6. Investors shall continuously pay attention to relevant announcements issued by LittleSwan and Midea Group and learn the progress of this stock-for-stock merger;
7. Investors may inquire of the securities company where transactions of B-sharessecurities account are made about the specific ways of business operation relating tothe account conversion.
Section I Business-related Organizations
| Full name of organization | Abbreviation in this Guidelines | Main relevant matters |
| Midea Group Co., Ltd. | Midea Group | Information disclosure |
| Wuxi Little Swan Company Limited | Little Swan, Littleswan-B | Information disclosure |
| China Securities Depository and Clearing Corporation Limited | CSDC | Allocation of transfer registration restricted account |
| Shenzhen Stock Exchange | SZSE | Restrictions on buy order declaration of transfer registration restricted account |
| Domestic securities companies | Domestic securities companies | Handle all business applications of investors and consultation, communication and notice; assist investors in opening transfer registration restricted account and assist investors to complete the handling formalities of third party custody meanwhile |
Section II Determine the Securities Account and Custody Unit of A-shares of
Midea GroupAs the current securities accounts of B-shares held by investors of B-shares of LittleSwan cannot be used to directly register A-shares of Midea Group and SZSEimplements the shares custody transfer trading system, one investor may have morethan one custody unit under one securities account. The securities account and custodyunit of A-shares of Midea Group will be determined in accordance with the principlesshown below after stock conversion:
1. After asking for the advices of investors, the domestic securities company wheretransactions of B-shares of Little Swan are conducted shall declare the securitiesaccount and custody unit of A-shares for each investor of Little Swan B-shares before30 May 2019, which shall ensure investors can normally trade the A-shares of MideaGroup.The B-shares of Little Swan registered in original securities account of B-shares willbe registered in the declared securities account of A-shares after converted intoA-shares of Midea Group. The B-shares of Little Swan will be trusted in the declaredcustody unit of A-shares after the conversion. The mistaken declaration information onthe custody unit of A-shares, if any, may result in that investors are unable to normallyregister or sell A-shares obtained after Little Swan B-shares are converted intoA-shares of Midea Group, please check and ensure the information declared is correct.Manners to declare securities account and custody unit: Please complete theDeclaration Table for the Corresponding Relationship between the Securities Accountand Custody Unit of A-shares and those of B-shares (refer to Appendix 1 for details)and send the following documents to sndd@citics.com:
1) Copy and paste the completed Declaration Table in the body of the message;2) Print and seal the completed Declaration Table, and send the scanned copy as anattachment of the message.At the time of declaration, please completely declare the information on the securitiesaccount and custody unit of A-shares corresponding to those of B-shares. In case the
information on the corresponding relationship would be declared for more than onetimes, the full declaration information which is received last by our company willprevail.2. Where the securities account of A-shares fails to be declared before the designateddeadline, A-shares after conversion will be registered to the transfer registrationrestricted account of related investors opened by CSDC, please refer to “Section IIITransfer Registration Restricted Account” of this chapter. Where the custody unit ofA-shares fails to be declared before the designated deadline, A-shares after conversionwill be transferred to the custody unit designated by CITIC Securities, and investor maycontact the CITIC Securities directly to handle custody transfer or make transactiondirectly.If there are any questions, please contact Shennan Avenue Business Department ofCITIC Securities Co., Ltd.Contact information relating to the consultation and business of CITIC Securities:
Contact person: Shennan Avenue Business Department of CITIC Securities Co., Ltd.Address: 301A, Building A, Xinian Center, No. 6021, Shennan Avenue, Futian District,ShenzhenTel.: 86-0755-83477942 (He Ying)
86-0755-83477944 (Luo Yixi)86-0755-83477915 (Yang Zheng)86-0755-83477941 (Shao Qicong)Fax: 86-0755-83459951Email: sndd@citics.com
Section III Transfer Registration Restricted AccountI. Allocation of Transfer Registration Restricted AccountAfter completing the business of cash option of B-shares of Little Swan, with respectto the foreign individual investor for domestic transactions without or not declaringsecurities account of A-shares, Midea Group will apply to CSDC for allocating onetransfer registration restricted account to the aforesaid free of any charge in accordancewith the information of B-shares securities account. As this securities account isspecially restricted, only the sell order declaration can be made and other purposes areforbidden.The securities company will notify investors of relevant matters concerning theallocation of transfer registration restricted account by network, telephone, textmessage, announcement in places of business, etc. Business department of eachsecurities company will assist the investor in opening the function of settlement byRMB for original capital account of B-shares before making subsequent sell ordertransactions relating to the transfer registration restricted account.During the course to allocate the transfer registration restricted account, investors neednot carry out any extra operation. Before the listing of additional A-shares of MideaGroup on the stock market, securities company where the securities account ofB-shares of investors belongs will notify investors of relevant matters concerning theallocation of transfer registration restricted account by network, telephone, textmessage, announcement in places of business. Please be aware of the relevant noticesand announcements on the occasion.After the transfer registration restricted account is allocated, investors can inquire ofthe designated security company of A-shares custody unit via consultancy at counter,telephone, online transaction system, etc. If no custody unit of A-shares is designated,investors can inquire of CITIC Securities via consultancy at counter, telephone, onlinetransaction system, etc.II. Way of OrderAfter the listing of A-shares of Midea Group, way of sell order relating to the investor’s
transfer registration restricted account will be declared in the way of order that investorhas applied to the business department of securities company where transactions oftransfer registration restricted account are made to open; where the online trading orderhas been opened, investor may login in the online trading system through the accountnumber and trading password of the transfer registration restricted account, inquireabout the remaining A-shares of Midea Group and fund balance of transfer registrationrestricted account and make sell order declaration.III. Real-time Market SituationInvestor may obtain the real-time market situation and information on suspension andresumption of trading relating to the A-shares of Midea Group through the existingmarket situation display channel and way of the securities company where transactionsof transfer registration restricted account are made, such as on-site self-service terminalof business department, online trading client terminal, etc.IV Main Trading RulesStock code of sell order declaration of A-shares of Midea Group is “000333” and nameof securities is “Midea Group”. The way of sell order declaration is basically same asthe operation of B-shares.(I) Limit of ChangeA-shares shall not increase or decrease by 10% from the closing price of last tradingday within trading hours of that day.Limit of change on ST shares and the shares that split share structure reform has notbeen finished is 5%.(II) Rotary Trading SystemThe T + 1 rotary trading system is implemented for the A-shares, namely, the sharesbrought that day can be sold in the following day. The investor relating to the transferregistration restricted account is only allowed to make the sell order declaration, so therotary trading is not applicable.(III) Trading UnitFor A-share bought via bidding mode, the declared quantity shall be 100 shares or itsintegral multiple. One-off sale declaration shall be made for the remaining shares less
than 100 shares.(IV) Minimum Fluctuating PriceMinimum fluctuating unit of declared price of A-shares is RMB0.01.(V) Trading HoursMonday to Friday (excluding the national holidays and day of suspension of tradingstipulated by exchange);9:15 to 9:25 of each trading day is the stage of opening call auction, wherein:
9:15 a.m. to 9:20 a.m.: Accept the trade declaration and the cancellation9:20 a.m. to 9:25 a.m.: Accept the trade declaration, but do not accept the declaration ofcancellationThe order that is not made during the call auction will automatically enter into thecontinuous auction;From 9:30 to 11:30 and from 13:00 to 14:57 of each trading day is the time ofcontinuous auction;14:57 to 15:00 is the stage of closing call auctionV. Liquidation and SettlementSame rules are applied in transfer registration restricted account and ordinary A-sharessecurities account and shares are liquidated and settled on the T + 0 day, which meansthat the quantity of shares equal to the quantity of shares sold and concluded that day (Tday) by the investor will be decreased in the securities account that day; the RMB fundis settled on the T + 1 day, which means that the investor can withdraw the RMB fundobtained from the sale of shares that day (T day) in the following trading day (T + 1day).With respect to the foreign individual investors for domestic transactions, to whichthis Chapter is applicable, the RMB fund obtained from sale of shares cannot be used,withdrawn and required to be converted into HKD in accordance with requirements ofState Administration of Foreign Exchange, namely, the securities company convertsthe RMB fund into HKD and make the settlement. Therefore, the RMB fund obtainedfrom sale of shares of investor’s transfer registration restricted account will be settledon the T + 1 day; the HKD fund that can be withdrawn finally will be settled on the
T+3 day after foreign exchange purchase bank has purchased foreign exchange, whichmeans the investor may apply to the securities company to withdraw the HKDobtained from sale of shares on the T + 3 day. Investor may inquire of the securitiescompany where transactions of transfer registration account are made about thespecific ways of details.VI. Payment of FundInvestor may send withdrawal application to the securities company on and followingT + 3 day. The withdrawal application procedures are same as the current withdrawalprocedures of investor’s B-shares. After withdrawal application procedures pass theinternal audit of the securities company, the securities company transfer the netamount of HKD fund that investor applies for withdrawal to the investor afterdeducting charges for remittance.Before the investor makes the withdrawal application, the interest accrued when HKDfund is deposited in each domestic securities company and current interest of HKDwithin the same period will be settled with the investor and included in the fundaccount of investor accordingly on the value date.VII. Capitalizing of Common Reserves, Bonus Shares and Dividend DistributionThe capitalizing of common reserves, registration of bonus shares and dividenddistribution relating to the shares in the transfer registration restricted account shall behandled by reference to the existing normal A-shares account.
Section IV Trading CostThe foreign investor who opens the transfer registration restricted account is requiredto pay commission, stamp tax, etc. same as the current ordinary A-shares securitiesaccount and the foreign exchange purchase expenses of RMB to HKD and charges forremittance of HKD. Currently, the foreign exchange purchase of HKD involves noadditional expenses and the exchange rate when purchasing foreign exchange uses theselling price of spot exchange of RMB to HKD on the day when the foreign exchangepurchase bank purchasing foreign exchange. Charges for remittance of HKD aresubject to the charges of the foreign exchange purchase bank.
| Name of Trading Cost | Rate | Ordinary B-share Securities Account | Ordinary A-share Securities Account | Transfer Registration Restricted Account |
| Commission for domestic account opening securities company | Refer to original transaction commission of A-share or B-share | √ | √ | √ |
| Stamp tax | 0.1% (only charge the seller) | √ | √ | √ |
| Liquidation expense | 0.05% (charged based on the trading amount) | √ | ||
| Foreign exchange purchase expense of HKD | It is handled in accordance with the selling price of spot exchange of RMB to HKD when the foreign exchange bank purchasing of foreign exchange. | |||
| Charges for | Charges for | √ |
| remittance of HKD | remittance of HKD are subject to the charges of the foreign exchange purchase bank. | |||
| Handling fee | 0.0487‰ of the trading amount(charge the buyer and seller) | √ | √ | √ |
| Registration and transfer fee | 0.02‰ of the trading amount(charge the buyer and seller) | √ | √ | |
| Supervision fee | 0.02‰ of the trading amount(charge the buyer and seller) | √ | √ | √ |
Section V Inquiry BusinessAfter Little Swan B-shares are converted into A-shares of Midea Group, the investorsmay inquire about the remaining securities in the account and balance of fund in thecurrent inquiry way relating to the securities account in the securities company wheretransactions of transfer registration restricted account are made.In addition, all investors may obtain all the disclosed information relating to thisstock-for-stock conversion from the website of SZSE (http://www.szse.cn/).
Section VI Change of Account InformationThe information relating to the transfer registration restricted account is copied fromcurrent information of investor’s B-shares securities. The investor whose identityinformation is changed is required to contact the securities company promptly, whichis required to promptly handle the information change to the B-shares securitiesaccount and transfer registration restricted account to ensure consistency.
Section VII General Meeting of ShareholdersInvestors may attend the General Meeting of Shareholders and make the voting on thescene in person or by proxy. With respect to the investor who intends to be present atthe meeting, at the day of General Meeting of Shareholders, individual investors shallhold stock account card (the investors allocated the transfer registration restrictedaccount may only hold the original B-shares securities account card), personal ID cardor other valid certificates or paper of identification that can prove the identity);representative of institutional investors shall hold the stock account card (the investorsallocated the transfer registration restricted account may only hold the originalB-shares securities account card) and certificate provided by the unit of shareholderwhen attending the General Meeting of Shareholders. Agent shall also present thepower of attorney and valid personal ID.After the custody relationship for the transfer registration restricted account has beenestablished, investors may make the online voting in accordance with the currentvoting procedures for the ordinary A-shares securities account.
Section VIII Allotment of SharesBefore foreign residents can subscribe A-shares, or foreign residents sell all A-sharesof Midea Group held by them, Midea Group will take the fact that the part of tradingrights relating to the A-shares securities account are restricted with extreme cautionand fully consider fairness of participation right of various investors when handlingrelevant matters including allotment of shares.
Section IX Cancellation of Transfer Registration Restricted AccountWhen remaining A-shares of Midea Group in the transfer registration restrictedaccount of an investor is zero, the securities company where transactions of transferregistration restricted account are made may cancel the transfer registration restrictedaccount.
Section X Pledge, Freezing and Non-trading Transfer of Account1. Pledge, non-trading transfer business: are handled in accordance with relevantbusiness rules of CSDC.2. Judicial business: is implemented with assistance provided by each securitiescompany and CSDC.
Chapter III Foreign Institutional Investor for Domestic Transactions
In order to guarantee that investors can conduct transactions smoothly after B-shares ofLittle Swan are converted into A-shares of Midea Group, the foreign institutionalinvestors for domestic transactions, to which this Chapter is applicable, shall fullyunderstand and confirm the matters shown below:
1. With respect to any investor who holds the A-shares of Midea Group as theLittle Swan B-shares are not sold on the last trading day and fails to validlydeclare the cash option, sale of shares in future will be settled in RMB. Afterthe completion of this stock-for-stock merger, with respect to any foreigninstitutional investor for domestic transactions who formerly holds B-shares ofLittle Swan, the reduction of A-shares of Midea Group and obtaining ofdividends in Reminbi through his/her transfer registration restricted accountshall be pursuant to theNotice on Opening of Accounts Involved in ShareReduction by and Dividends Attributable to Foreign Shareholders of A-shareListed Companies and on Matters Related to Foreign Exchange Control
Issued by the General Office of the People’s Bank of China(Y.B.F [2009] No.178) and relevant provisions of the foreign exchange control.2. With respect to the foreign institutional investors for domestic transactions, towhich this chapter is applicable, “Section II Determine the Securities Account andCustody Unit of A-shares of Midea Group” of this chapter can be referred to fordeclaring an available A-share account (if any). If there is no A-shares account or nodeclaration, Midea Group shall apply to CSDC to allocate one transfer registrationrestricted account which only can be used to make the sell order declaration and shallnot be used for other purposes. Relevant investors shall fully understand therestrictions on trading;
3. Investor shall confirm that he/she is the investor, to which this Chapter is applied,otherwise, potentially, relevant contents of this Operational Guidelines are notcomplete applicable;4. Investors shall fully understand the differences of trading rules and expensesbetween B-shares and A-shares;5. The stock code of trade declaration of A-shares of Midea Group is 000333 and nameof securities is “Midea Group”;6. Investors shall continuously pay attention to relevant announcements issued by LittleSwan and Midea Group and learn the progress of this stock-for-stock merger;7. Investors may inquire of the securities company where transactions of B-sharessecurities account are made about the specific ways of business operation relating tothe account conversion.8. Foreign institutional investors may inquire Foshan Branch of ChinaMerchants Bank about how to open an NRA account and exchangecurrencies.
Section I Business-related Organizations
| Full name of organization | Abbreviation in this Guidelines | Main relevant matters |
| Midea Group Co., Ltd. | Midea Group | Information disclosure |
| Wuxi Little Swan Company Limited | Little Swan, Littleswan-B | Information disclosure |
| China Securities Depository and Clearing Corporation Limited | CSDC | Allocation of transfer registration restricted account |
| Shenzhen Stock Exchange | SZSE | Restrictions on buy order declaration of transfer registration restricted account |
| Domestic securities companies | Domestic securities companies | Handle all business applications of investors and consultation, communication and notice; assist investors in opening transfer registration restricted account and assist investors to complete the handling formalities of third party custody meanwhile |
| Foshan Branch of China Merchants Bank | Foshan Branch of CMBC | Handle applications of foreign institutional investors regarding to opening of NRA, provide services related to currency exchange such as consultation, communication and notice and assist investors to exchange currencies and remit funds as required by relevant foreign exchange regulations. |
Section II Determine the Securities Account and Custody Unit of A-shares of
Midea GroupAs the current securities accounts of B-shares held by investors of B-shares of LittleSwan cannot be used to directly register A-shares of Midea Group and SZSEimplements the shares custody transfer trading system, one investor may have morethan one custody unit under one securities account. The securities account and custodyunit of A-shares of Midea Group will be determined in accordance with the principlesshown below after stock conversion:
1. After asking for the advices of investors, the domestic securities company in whichtransactions of B-shares of Little Swan are conducted shall declare the securitiesaccount and custody unit of A-shares for each investor of Little Swan B-shares before30 May 2019, which shall ensure investors can normally trade the A-shares of MideaGroup.The B-shares of Little Swan registered in original securities account of B-shares willbe registered in the declared securities account of A-shares after converted intoA-shares of Midea Group. The B-shares of Little Swan will be trusted in the declaredcustody unit of A-shares after the conversion. The mistaken declaration information onthe securities account and custody unit of A-shares, if any, may result in that investorsare unable to normally register or sell A-shares obtained after Little Swan B-shares areconverted into A-shares of Midea Group. Please check and ensure the informationdeclared is correct.Manners to declare securities account and custody unit: Please complete theDeclaration Table for the Corresponding Relationship between the Securities Accountand Custody Unit of A-shares and those of B-shares (refer to Appendix 1 for details)and send the following documents to sndd@citics.com:
1) Copy and paste the completed Declaration Table in the body of the message;2) Print and seal the completed Declaration Table, and send the scanned copy as anattachment of the message.At the time of declaration, please completely declare the information on the securities
account and custody unit of A-shares corresponding to those of B-shares. In case theinformation on the corresponding relationship would be declared for more than onetime, the full declaration information which is received last by our company willprevail.2. Where the securities account of A-shares fails to be declared before the designateddeadline, A-shares after conversion will be registered to the transfer registrationrestricted account of related investors opened by CSDC, please refer to “Section IIITransfer Registration Restricted Account” of this chapter. Where the custody unit ofA-shares fails to be declared before the designated deadline, A-shares after conversionwill be transferred to the custody unit designated by CITIC Securities, and investor maycontact the CITIC Securities directly to handle custody transfer or make transactiondirectly.If there are any questions, please contact Shennan Avenue Business Department ofCITIC Securities Co., Ltd.Contact information relating to the consultation and business of CITIC Securities:
Contact person: Shennan Avenue Business Department of CITIC Securities Co., Ltd.Address: 301A Building A, Xinian Center, No. 6021, Shennan Avenue, Futian District,ShenzhenTel.: 86-0755-83477942 (He Ying)
86-0755-83477944 (Luo Yixi)86-0755-83477915 (Yang Zheng)86-0755-83477941 (Shao Qicong)Fax: 86-0755-83459951Email: sndd@citics.com
Section III Transfer Registration Restricted AccountI. Allocation of Transfer Registration Restricted AccountAfter completing the business of cash option of B-shares of Little Swan, with respectto the foreign institutional investor trading in domestic without or not declaringsecurities account of A-shares, Midea Group will apply to CSDC for allocating onetransfer registration restricted account to the aforesaid free of any charge in accordancewith the information of B-shares securities account. As this securities account isspecially restricted, only the sell order declaration can be made and other purposes areforbidden.The securities company will notify investors of relevant matters concerning theallocation of transfer registration restricted account by network, telephone, textmessage, announcement in places of business, etc. Business department of eachsecurities company will assist the investor in opening the function of settlement byRMB for original capital account of B-shares before making subsequent sell ordertransactions relating to the transfer registration restricted account.During the course to allocate the transfer registration restricted account, investors neednot carry out any extra operation. Before the listing of additional A-shares of MideaGroup on the stock market, securities company where the securities account ofB-shares of investors belongs will notify investors of relevant matters concerning theallocation of transfer registration restricted account by network, telephone, textmessage, announcement in places of business. Please be aware of the relevant noticesand announcements on the occasion.After the transfer registration restricted account is allocated, investors can inquire ofthe designated security company of A-shares custody unit via consultancy at counter,telephone, online transaction system, etc. If no custody unit of A-shares is designated,investors can inquire of CITIC Securities via consultancy at counter, telephone, onlinetransaction system, etc.II. Way of OrderAfter the listing of A-shares of Midea Group, way of sell order relating to the investor’s
transfer registration restricted account will be declared in the way of order that investorhas applied to the business department of securities company where transactions oftransfer registration restricted account are made to open; where the online trading orderhas been opened, investor may login in the online trading system through the accountnumber and trading password of the transfer registration restricted account, inquireabout the remaining A-shares of Midea Group and fund balance of transfer registrationrestricted account and make sell order declaration.III. Real-time Market SituationInvestor may obtain the real-time market situation and information on suspension andresumption of trading relating to the A-shares of Midea Group through the existingmarket situation display channel and way of the securities company where transactionsof transfer registration restricted account are made, such as on-site self-service terminalof business department, online trading client terminal, etc.IV Main Trading RulesStock code of sell order declaration of A-shares of Midea Group is “000333” and nameof securities is “Midea Group”. The way of sell order declaration is basically same asthe operation of B-shares.(I) Limit of ChangeA-shares shall not increase or decrease by 10% from the closing price of last tradingday within trading hours of that day.Limit of change on ST shares and the shares that split share structure reform has notbeen finished is 5%.(II) Rotary Trading SystemThe T + 1 rotary trading system is implemented for the A-shares, namely, the sharesbrought that day can be sold in the following day. The investor relating to the transferregistration restricted account is only allowed to make the sell order declaration, so therotary trading is not applicable.(III) Trading UnitFor A-share bought via bidding mode, the declared quantity shall be 100 shares or itsintegral multiple. One-off sale declaration shall be made for the remaining shares less
than 100 shares.(IV) Minimum Fluctuating PriceMinimum fluctuating unit of declared price of A-shares is RMB0.01.(V) Trading HoursMonday to Friday (excluding the national holidays and day of suspension of tradingstipulated by exchange);9:15 to 9:25 of each trading day is the stage of opening call auction, wherein:
9:15 a.m. to 9:20 a.m.: Accept the trade declaration and the cancellation9:20 a.m. to 9:25 a.m.: Accept the trade declaration, but do not accept the declaration ofcancellationThe order that is not made during the call auction will automatically enter into thecontinuous auction;From 9:30 to 11:30 and from 13:00 to 14:57 of each trading day is the time ofcontinuous auction;14:57 to 15:00 is the stage of closing call auctionV. Liquidation and SettlementSame rules are applied in transfer registration restricted account and ordinary A-sharessecurities account and shares are liquidated and settled on the T + 0 day, which meansthat the quantity of shares equal to the quantity of shares sold and concluded that day (Tday) by the investor will be decreased in the securities account that day; the RMB fundis settled on the T + 1 day, which means that the investor can withdraw the RMB fundobtained from the sale of shares that day (T day) in the following trading day (T + 1day).VI. Exchange of Currencies and Remittance of FundsWith respect to any foreign institutional investor for domestic transactions, towhich this chapter is applicable, the reduction of A-shares of Midea Group andobtaining of dividends in Reminbi through his/her transfer registrationrestricted account shall be pursuant to theNotice on Opening of Accounts
Involved in Share Reduction by and Dividends Attributable to ForeignShareholders of A-share Listed Companies and on Matters Related to ForeignExchange Control
Issued by the General Office of the People’s Bank of China
(Y.B.F [2009] No. 178) and relevant provisions of the foreign exchange control:
(1) The foreign institutional investor shall open the securities account ofA-shares in the securities company (Midea Group shall apply to CSDC toallocate one transfer registration restricted account), open the temporary RMBdeposit NRA (Non-Resident Account) at the Foshan Branch of CMBC andconnect the securities account and NRA at the counter of the Foshan Branchof CMBC. The opening of an account by any foreign institutional investor shallmeet the requirements on anti-money laundering policy issued by internationalorganizations and countries such as the United Nation, United States ofAmerica and the European Union as well as the Chinese government.(2) The foreign institutional investor shall transfer the funds generated fromshareholding reduction or dividends into the NRA on the date when theaforesaid funds are transferred into the securities account and the balance ofthe securities account at the end of the T+1 day shall be zero. The funds inRenminbi generated from shareholding reduction or dividends cannot be usedor withdrawn if the foreign institutional investor has not completed the openingof NRA and the association of NRA and the securities account before theshareholding reduction of A-shares of Midea Group or dividends obtainingthrough the transfer registration restricted account.
(3) The foreign institutional investor shall provide CMBC with the followingmaterials for purchase of foreign currency and outbound remittance:
1) Written application; (including application for settlement and sale of foreignexchange of CMBC, application for outbound remittance and writtenapplication of foreign institutional investor)2) A valid certificate of capital source;3) Relevant tax registration form or tax payment receipt;4) Identification document of the applicant and the copy thereof (relevant letterof authorization notarized shall be provided with respect to any authorization);5) Business Registration Certificate for FDI of A-share Listed Companies(shareholding reduction of A-shares);6) Other materials required by State Administration of Foreign Exchange.(4) With respect to any foreign institutional investor who has reduced allA-shares held and funds generated from share reduction and dividends havebeen remitted through purchase of foreign currency or used domestically uponapproval in full, the securities account and deposit account shall be cancelledwithin five working days after the completion of the above procedures. If theforeign institutional investor fails to perform this obligation, the CMBC has theright to freeze the customer’s deposit account, manage as dormant accountand cancel forcibly when certain conditions are met.Note: If there is any adjustment on policies regarding foreign exchange controland cross-border RMB during the business period, the latest supervision and
administration requirements shall be observed.Foreign institutional investors may inquire Foshan Branch of China MerchantsBank about how to open an NRA account and exchange currencies.Contact information of Foshan Branch of CMBC:
Contact person: Huang Xiaopeng (Tel: 86-0757-81999101; Email:
huangxp8@cmbchina.com)
Contact person: Sun Guodong (Tel: 86-0757-81999113; Email:
sunguodong@cmbchina.com)
Contact person: Gu Ying (Tel: 86-0757-81999131; Email:
guying0917@cmbchina.com)
Address for materials sending: CMBC Building, Denghu East Road No. 12,Nanhai District, Foshan, Guangdong Province (please contact the contactperson for confirmation before mailing).VII. Capitalizing of Common Reserves, Bonus Shares and Dividend DistributionThe capitalizing of common reserves, registration of bonus shares and dividenddistribution relating to the shares in the transfer registration restricted account shall behandled by reference to the existing normal A-shares account.
Section IV Trading CostThe foreign investor who opens the transfer registration restricted account is requiredto pay commission, stamp tax, etc. same as the current ordinary A-shares securitiesaccount and the foreign exchange purchase expenses of RMB to HKD and charges forremittance of HKD. Currently, the foreign exchange purchase of HKD involves noadditional expenses and the exchange rate when purchasing foreign exchange uses theselling price of spot exchange of RMB to HKD on the day when the foreign exchangepurchase bank purchasing foreign exchange. Charges for remittance of HKD aresubject to the charges of the foreign exchange purchase bank.
| Name of Trading Cost | Rate | Ordinary B-share Securities Account | Ordinary A-share Securities Account | Transfer Registration Restricted Account |
| Commission for domestic account opening securities company | Refer to original transaction commission of A-share or B-share | √ | √ | √ |
| Stamp tax | 0.1% (only charge the seller) | √ | √ | √ |
| Liquidation expense | 0.05% (charged based on the trading amount) | √ | ||
| Foreign exchange purchase expense of HKD | It is handled in accordance with the selling price of spot exchange of RMB to HKD when the foreign exchange bank purchasing of foreign exchange. | |||
| Charges for | Charges for | √ |
| remittance of HKD | remittance of HKD are subject to the charges of the foreign exchange purchase bank. | |||
| Handling fee | 0.0487‰ of the trading amount(charge the buyer and seller) | √ | √ | √ |
| Registration and transfer fee | 0.02‰ of the trading amount(charge the buyer and seller) | √ | √ | |
| Supervision fee | 0.02‰ of the trading amount(charge the buyer and seller) | √ | √ | √ |
Section V Inquiry BusinessAfter Little Swan B-shares are converted into A-shares of Midea Group, the investorsmay inquire about the remaining securities in the account and balance of fund in thecurrent inquiry way relating to the securities account in the securities company wheretransactions of transfer registration restricted account are made.In addition, all investors may obtain all the disclosed information relating to thisstock-for-stock conversion from the website of SZSE (http://www.szse.cn/).
Section VI Change of Account InformationThe information relating to the transfer registration restricted account is copied fromcurrent information of investor’s B-shares securities. The investor whose identityinformation is changed is required to contact the securities company promptly, whichis required to promptly handle the information change to the B-shares securitiesaccount and transfer registration restricted account to ensure consistency.
Section VII General Meeting of ShareholdersInvestors may attend the General Meeting of Shareholders and make the voting on thescene in person or by proxy. With respect to the investor who intends to be present atthe meeting, at the day of General Meeting of Shareholders, individual investors shallhold stock account card (the investors allocated the transfer registration restrictedaccount may only hold the original B-shares securities account card), personal ID cardor other valid certificates or paper of identification that can prove the identity);representative of institutional investors shall hold the stock account card (the investorsallocated the transfer registration restricted account may only hold the originalB-shares securities account card) and certificate provided by the unit of shareholderwhen attending the General Meeting of Shareholders. Agent shall also present thepower of attorney and valid personal ID.After the custody relationship for the transfer registration restricted account has beenestablished, investors may make the online voting in accordance with the currentvoting procedures for the ordinary A-shares securities account.
Section VIII Allotment of SharesBefore foreign residents can subscribe A-shares, or foreign residents sell all A-sharesof Midea Group held by them, Midea Group will take the fact that the part of tradingrights relating to the A-shares securities account are restricted with extreme cautionand fully consider fairness of participation right of various investors when handlingrelevant matters including allotment of shares.
Section IX Cancellation of Transfer Registration Restricted AccountWhen remaining A-shares of Midea Group in the transfer registration restrictedaccount of an investor is zero, the securities company where transactions of transferregistration restricted account are made may cancel the transfer registration restrictedaccount.
Section X Pledge, Freezing and Non-trading Transfer of Account1. Pledge, non-trading transfer business: are handled in accordance with relevantbusiness rules of CSDC.2. Judicial business: is implemented with assistance provided by each securitiescompany and CSDC.
Chapter IV Foreign Individual Investor for Non-domestic
Transaction
In order to guarantee that investors can conduct transactions smoothly after LittleSwan B-shares are converted A-shares of Midea Group, the foreign individualinvestors for non-domestic transaction, to which this Chapter is applicable, shall fullyunderstand and confirm the matters shown below:
1. With respect to the investor who holds the A-shares of Midea Group as the LittleSwan B-shares are not sold on the last trading day and fails to validly declare the cashoption, sale of shares in future will be settled in RMB and finally settled in HKD by thesecurities company with the transfer registration restricted account purchasing foreignexchange through the foreign exchange purchase bank, and the exchange rate whenpurchasing foreign exchange uses the selling price of spot exchange of RMB to HKDon the day when the foreign exchange purchase bank purchases foreign exchange;2. With respect to the foreign individual investors for non-domestic transaction, towhich this Chapter is applicable, they can declare the available A-shares account (ifany) according to “Section II Determine the Securities Account and Custody Unit ofA-shares of Midea Group” in this chapter; if there are no A-shares account or they donot declare it, then Midea Group will apply to CSDC to allocate one transferregistration restricted account which only can makes the sell order declaration and shallnot be used for other purposes, and relevant investors shall fully understand therestrictions on trading;3. No transaction and settlement are made temporarily by securities company afterCSDC allocates transfer registration restricted account to the investor. Investor isrequired to designate one domestic securities company as that where transactions oftransfer registration restricted account are made and handle formalities for openingfund account in the business department of this securities company to achieve thenormal sale of A-shares of Midea Group from this transfer registration restricted
account. Such investors are proposed to select CITIC Securities as the securitiescompany where transactions of transfer registration restricted account are made; Afterdetermining the domestic securities company, investor is required to timely submit itscustody unit to CITIC Securities. For the investor who fails to submit its custody unittimely, his/her shares after conversion will be held in custody in the custody unitdesignated by CITIC Securities. And investor may subsequently contact CITICSecurities directly to handle custody transfer or make transaction directly.4. Investor shall confirm that he/she is the investor, to which this Chapter is applied,otherwise, potentially, relevant contents of this Operational Guidelines are notcomplete applicable;5. Investors shall fully understand the differences of trading rules between B-shares andA-shares;6. Stock code of trade declaration of A-shares of Midea Group is 000333 and name ofsecurities is “Midea Group”7. Investors shall continuously pay attention to relevant announcements issued by LittleSwan and Midea Group and learn the progress of this stock-for-stock merger;8. In accordance with the Guidelines on the Registration and Settlements Service ofB-share Business, the shareholders of Little Swan B-shares may appoint agent to applyto CSDC Shenzhen Branch for the share adjustment of the agent account 23 May 2019.9. Investors may inquire of the securities company where the transfer registrationrestricted account is made about the specific ways of business operation relating to theaccount conversion.
Section I Business-related Organizations
| Full name of organization | Abbreviation in this guidelines | Main relevant matters |
| Midea Group Co., Ltd. | Midea Group | Information disclosure |
| Wuxi Little Swan Company Limited | Little Swan, Little Swan B | Information disclosure |
| China Securities Depository and Clearing Corporation Limited | CSDC | Allocation of transfer registration restricted account |
| Shenzhen Stock Exchange | SZSE | Restrictions on buy order declaration of transfer registration restricted account |
| CITIC Securities Co., Ltd | CITIC Securities | Provide business consultation and handling service for the investor involved in this account conversion. |
| Domestic securities companies | Domestic securities companies | Handle all business applications of investors and consultation, communication and notice; assist investors in opening common A-shares account the transfer registration restriction account in the trading system and assist investors to complete the handling formalities of third party custody meanwhile. |
Section II Determine the Securities Account and Custody Unit of A-shares of
Midea Group
As the existing B-shares security account of Little Swan B-shares investors cannot bedirectly registered into A-shares of Midea Group, and SZSE implements the sharescustody transfer trading system, one investor may have more than one custody unitunder one securities account. Therefore, securities account and custody unit ofA-shares of Midea Group will be determined in accordance with the principles shownbelow after stock conversion:
1. Investor who would designate its securities account and custody unit byhimself/herself may contact CITIC Securities and designate the future securitiesaccount and custody unit of Midea Group A-shares prior to 30 May 2019.Manners to declare securities account and custody unit: Please complete theDeclaration for the Securities Account and Custody Unit of B-share Investors forNon-domestic Transaction of Little Swan (refer to Appendix 2 for details) and thesecurities company of designated custody unit of A-shares shall send the followingdocuments to sndd@citics.com;1) Copy and paste the completed Declaration for the Custody Unit of B-share Investorsfor Non-domestic Transaction in the body of the message;2) Print and seal the completed Declaration for the Custody Unit of B-share Investorsfor Non-domestic Transaction, and send the scanned copy as an attachment of themessage.At the time of declaration, please completely declare the information on the securitiesaccount and custody unit of A-shares. In case the information would be declared formore than one times, the full declaration information which is received last by ourcompany will prevail.2. If the A-share securities account of investors is not declared before the appointedexpiration date, the converted A-shares of Midea Group will be registered intotransfer registration restricted account for relevant investors by China SecuritiesDepository and Clearing Corporation Limited. Please refer to “Section III Transfer
Registration Restricted Account” in this chapter. To offer convenience to investors, ourcompany entrusts CITIC Securities to provide default custody unit. In case the foreigninvestors for non-domestic transaction of B-share don’t declare his/her custody unit toCITICS Securities before 30 May 2019, the A-shares of Midea Group obtained will beautomatically held in custody in the custody unit of Shennan Avenue BusinessDepartment of CITIC Securities Co., Ltd. The aforesaid investor will not carry outtransaction, custody transfer and other operation until he/she handles related formalitiessuch as opening fund account in Shennan Avenue Business Department of CITICSecurities Co., Ltd.If there are any questions, please contact Shennan Avenue Business Department ofCITIC Securities Co., Ltd.Contact information relating to the consultation and business of CITIC Securities:
Contact person: Shennan Avenue Business Department of CITIC Securities Co., Ltd.Address: 301A, A building, Xinian Center, No. 6021, Shennan Avenue, Futian District,ShenzhenTel.: 86-0755-83477942 (He Ying) 86-0755-83477944 (Luo Yixi)
86-0755-83477915 (Yang Zheng) 86-0755-83477941 (Shao Qicong)Fax: 86-0755-83459951Email: sndd@citics.com
Section III Transfer Registration Restricted Account
I. Allocation of transfer registration restricted accountWith respect to the foreign individual investors for non-domestic transaction withoutA-share securities account or without declaring A-share securities account, MideaGroup will apply to the CSDC to allocate transfer registration restricted account to theaforesaid free of any charge in accordance with the information of B-share securitiesaccount after the cash option business relating to the Little Swan B-shares has beencompleted. As this securities account is specially restricted, only the sell orderdeclaration can be made and other purposes are forbidden.As B-share securities account of investor is not opened in any domestic securitiescompany, the investor, after knowing relevant matters concerning this accountconversion, is required to designate one domestic securities company as that wherefuture transactions of transfer registration restricted account will be made (see SectionII of this Chapter for details). Investor is required to handle the formalities for openingfund account in this securities company and this securities company has opened thefund account of transfer registration restricted account of investor, then the inquiry andsell order declaration relating to the A-shares of Midea Group in the transferregistration restricted account can be made.Investor, after knowing relevant matters concerning this account conversion, isrequired to determine one securities company as that where future transactions oftransfer registration restricted account will be made and handle formalities for openingfund account in the business department of this securities company to achieve thenormal sale of A-shares of Midea Group from this transfer registration restrictedaccount. It is suggested that the aforesaid investor gives preference to the CITICSecurities as the securities company where future transactions of transfer registrationrestricted account will be made.II. Way of account openingFor detailed procedures relating to the account opening formalities, investor mayconsult the CITIC Securities.
Investor cannot make the sell order declaration of A-shares of Midea Group until thesecurities company where future transactions of transfer registration restricted accountwill be made has been determined and account has opened in this securities company.Investor may contact CITIC Securities (entrusted by Midea Group) and inquire aboutthe information relating to the transfer registration restricted account.Meanwhile, investor may also contact CITIC Securities and consult the businessprocedures relating to the account opening, subsequent operations of transferregistration restricted account, etc. involved in this account conversion, and maycomplete the handling of aforesaid businesses in CITIC Securities. Investor, afterknowing details of relevant businesses, may also choose other domestic securitiescompanies and handle relevant businesses. For procedures for handling businesses,investor may consult the securities company chosen by him/her.Contact information relating to the consultation and business of CITIC Securities:
Contact person: Shennan Avenue Business Department of CITIC Securities Co., Ltd.Address: 301A, A building, Xinian Center, No. 6021, Shennan Avenue, Futian District,ShenzhenTel.: 86-0755-83477942 (He Ying) 86-0755-83477944 (Luo Yixi)
86-0755-83477915 (Yang Zheng) 86-0755-83477941 (Shao Qicong)Fax: 86-0755-83459951Email: sndd@citics.comIII. Way of orderAfter the securities account where transactions of transfer registration restrictedaccount are made has completed account opening procedures for the investor, way ofsell order relating to the investor’s transfer registration restricted account will bedeclared in various ways of order that investor has applied to the business departmentof securities company where transactions of transfer registration restricted account aremade to open; where the online trading order has been opened, investor may login inthe online trading system through the fund account number and trading password setwhen opening account, inquire about the remaining A-shares of Midea Group and fundbalance of transfer registration restricted account and make sell order declaration.
IV. Real-time market situationInvestor may obtain the real-time market situation and information of and suspensionand resumption of trading relating to the A-shares of Midea Group through the existingmarket situation display channel and way of the securities company where transactionsof future transfer registration restricted account are made, such as on-site self-serviceterminal of business department, online trading client terminal, etc.V. Main trading rulesStock code of sell order declaration of A-shares of Midea Group is 000333, name ofsecurities is “Midea Group” and the way of sell order declaration is basically same asthe operation of B-shares.(I) Limit of changeA-shares shall not increase or decrease by 10% from the closing price of last tradingday within trading hours that day. Limit of change on ST shares and the shares that splitshare structure reform has not been finished is 5%.(II) Rotary trading systemThe T + 1 rotary trading system is implemented for the A-shares, namely, the sharesbrought that day can be sold in the following day. The investor relating to the transferregistration restricted account is only allowed to make the sell order declaration, so therotary trading is not applicable.(III) Trading unitFor A-share bought via bidding mode, the declared quantity shall be 100 shares or itsintegral multiple. One-off sale declaration shall be made for the remaining shares lessthan 100 shares.(IV) Minimum fluctuating priceMinimum fluctuating unit of declared price of A-shares is RMB 0.01.(V) Transaction dateMonday to Friday (excluding the national holidays and day of suspension of tradingstipulated by exchange);9:15 to 9:25 of each trading day is the stage of opening call auction, wherein:
9:15 a.m. to 9:20 a.m.: Accept the trade declaration and the cancellation
9:20 a.m. to 9:25 a.m.: Accept the trade declaration, but do not accept thedeclaration of cancellationThe order that is not made during the call auction will automatically enter into thecontinuous auction;From 9:30 to 11:30 and from 13:00 to 14:57 of each trading day is the time ofcontinuous auction;14:57 to 15:00 is the stage of closing call auctionVI. Liquidation and settlementSame rules are applied in transfer registration restricted account and ordinary A-sharesecurities account and shares are liquidated and settled on the T + 0 day, which meansthat the quantity of shares equal to the quantity of shares sold and concluded that day (Tday) by the investor will be decreased in the securities account that day; the RMB fundis settled on the T + 1 day, which means that the investor can withdraw the RMB fundobtained from the sale of shares that day (T day) in the following trading day (T + 1day).With respect to the foreign individual investors for non-domestic transaction, to whichthis Chapter is applicable to, the RMB fund obtained from sale of shares cannot be used,withdrawn and is required to be converted into HKD in accordance with requirementsof State Administration of Foreign Exchange, namely, the securities company convertsthe RMB fund into HKD and make the settlement. Therefore, the RMB fund obtainedfrom sale of shares of investor’s transfer registration restricted account will be settledon the T + 1 day; the HKD fund that can be withdrawn finally will be settled on the T +3 day after foreign exchange purchase bank has purchased foreign exchange, whichmeans the investor may apply to the securities company to withdraw the HKD obtainedfrom sale of shares on the T + 3 day. Investor may inquire of the securities companywhere transactions of transfer registration account are made about the specific ways ofdetails.VII. Payment of fundAfter inquiring that balance of HKD in the fund account opened in the securitiescompany where transactions of transfer registration restricted account are made
increases, investor may send withdrawal application to this securities company; withrespect to the details of withdrawal application procedures, formalities, final way ofpayment of fund and costs, investor may inquire of this securities company.VIII. Capitalizing of common reserves, bonus shares and dividend distributionThe capitalizing of common reserves, registration of bonus shares and dividenddistribution relating to the shares in the transfer registration restricted account shall behandled by reference to the existing normal A-share account.
Section IV Trading Cost
The foreign investor who opens the transfer registration restricted account is required topay commission, stamp tax, etc. same as the current ordinary A-share securities accountand the foreign exchange purchase expenses of RMB to HKD and charges for remittance ofHKD. Currently, the foreign exchange purchase of HKD involves no additional
expenses and the exchange rate when purchasing foreign exchange uses the sellingprice of spot exchange of RMB to HKD on the day when the foreign exchange purchasebank purchasing foreign exchange. Charges for remittance of HKD are subject to thecharges of the foreign exchange purchase bank.
| Name of Trading cost | Rate | Ordinary B-share securities account | Ordinary A-share securities account | Transfer registration restricted account |
| Commission for domestic account opening securities company | Refer to original transaction commission of A-share or B-share | √ | √ | √ |
| Stamp tax | 0.1% (only charge the seller) | √ | √ | √ |
| Liquidation expense | 0.05% (charged based on the trading amount) | √ | ||
| Foreign exchange purchase | It is handled in accordance with the selling price of spot |
| expense of HKD | exchange of RMB to HKD when the foreign exchange bank purchasing of foreign exchange. | |||
| Charges for remittance of HKD | Charges for remittance of HKD are subject to the charges of the foreign exchange purchase bank. | √ | ||
| Handle fee | 0.0487‰ of trading Amount (charge the buyer and seller) | √ | √ | √ |
| Registration and transfer fee | 0.02‰ of the trading Amount (charge the buyer and seller) | √ | √ | |
| Supervision fee | 0.02‰ of the trading Amount (charge the buyer and seller) | √ | √ | √ |
Section V Inquiry Business
After Little Swan B-shares are converted into the A-shares of Midea Group, theinvestor may inquire about the remaining securities in the account and balance of fundin the current inquiry way relating to the securities account in the securities companywhere transactions of transfer registration restricted account are made.In addition, all investors may obtain all the disclosed information relating to thisstock-for-stock conversion from the website of SZSE (http://www.szse.cn/).
Section VI Change of Account Information
The information relating to the transfer registration restricted account is copied fromcurrent information of investor’s B-share securities. The investor whose identityinformation is changed is required to contact the securities company promptly, which isrequired to promptly handle the information change to the B-share securities accountand transfer registration restricted account to ensure consistency.
Section VII General Meeting of Shareholders
Investor may attend the General Meeting of Shareholders and make the voting on thescene in person or by proxy. With respect to the investor who intends to be present at themeeting, at the day of General Meeting of Shareholders, individual investor shall holdstock account card (the investor allocated the transfer registration restricted accountmay only hold the original B-share securities account card), personal ID card or othervalid certificates or paper of identification that can prove the identity); representative ofinstitutional investor shall hold the stock account card of the unit of shareholder (theinvestor allocated the transfer registration restricted account may only hold the originalB-share securities account card) and certificate provided by the unit of shareholderwhen attending the General Meeting of Shareholders. Agent shall also present thepower of attorney and valid personal ID.After having determined the domestic securities company where transactions oftransfer registration account will be made and handled account opening procedures inthis securities company, investor may make the online voting in accordance with thecurrent voting procedures for the ordinary A-share securities account.Investor who has not determined the securities company where future transactions oftransfer registration restricted account will be made and handled account openingprocedures in this securities company is required to contact Midea Group and attend theGeneral Meeting of Shareholders and vote by himself/herself.Contact information of Midea Group:
Address: No. 26-28 building, B area, Headquarters Bulding of Midea, No. 6 MideaAvenue, Beijiao Town, Shunde District, Foshan.
Contact person: Jiang PengTel.: 0757-26637438Fax: 0757-26605456
Section VIII Allotment of Shares
Before foreign residents can subscribe A-shares, or foreign residents sell all A-shares ofMidea Group held by them, A-shares of Midea Group will take the fact that the part oftrading rights relating to the A-share securities account are restricted with extremecaution and fully consider fairness of participation right of various investors whenhandling relevant matters including allotment of shares.
Section IX Cancellation of Transfer Registration Restricted Account
When remaining A-shares of Midea Group in the transfer registration restrictedaccount of investor is zero, the securities company where transactions of transferregistration restricted account are made may cancel the transfer registration restrictedaccount.
Section X Pledge, Freezing and Non-trading Transfer of Account
1. Pledge, non-trading transfer business: are handled in accordance with relevantbusiness rules of CSDC.2. Judicial business: is implemented with assistance provided by each securitiescompanies and CSDC.
Chapter V Foreign Institutional Investor for Non-domestic
Transaction
In order to guarantee that investors can conduct transactions smoothly after LittleSwan B-shares are converted A-shares of Midea Group, the foreign institutionalinvestors for non-domestic transaction, to which this Chapter is applicable, shall fullyunderstand and confirm the matters shown below:
1. With respect to any investor who holds the A-shares of Midea Group as theLittle Swan B-shares are not sold on the last trading day and fails to validlydeclare the cash option, sale of shares in future will be settled in RMB. Afterthe completion of this stock-for-stock merger, with respect to any foreigninstitutional investor for non-domestic transactions who formerly holdsB-shares of Little Swan, the reduction of A-shares of Midea Group andobtaining of dividends in Reminbi through his/her transfer registrationrestricted account shall be pursuant to theNotice on Opening of AccountsInvolved in Share Reduction by and Dividends Attributable to ForeignShareholders of A-share Listed Companies and on Matters Related to ForeignExchange Control
Issued by the General Office of the People’s Bank of China
(Y.B.F [2009] No. 178) and relevant provisions of the foreign exchange control.2. With respect to the foreign institutional investors for non-domestic transaction, towhich this Chapter is applicable, they can declare the available A-shares account (ifany) according to “Section II Determine the Securities Account and Custody Unit ofA-shares of Midea Group” in this chapter; if there are no A-shares account or they donot declare it, then Midea Group will apply to CSDC to allocate one transferregistration restricted account which only can makes the sell order declaration and shall
not be used for other purposes, and relevant investors shall fully understand therestrictions on trading;3. No transaction and settlement are made temporarily by securities company afterCSDC allocates transfer registration restricted account to the investor. Investor isrequired to designate one domestic securities company as that where transactions oftransfer registration restricted account are made and handle formalities for openingfund account in the business department of this securities company to achieve thenormal sale of A-shares of Midea Group from this transfer registration restrictedaccount. Such investors are proposed to select CITIC Securities as the securitiescompany where transactions of transfer registration restricted account are made; Afterdetermining the domestic securities company, investor is required to timely submit itscustody unit to CITIC Securities. For the investor who fails to submit its custody unittimely, his/her shares after conversion will be held in custody in the custody unitdesignated by CITIC Securities. And investor may subsequently contact CITICSecurities directly to handle custody transfer or make transaction directly.4. Investor shall confirm that he/she is the investor, to which this Chapter is applied,otherwise, potentially, relevant contents of this Operational Guidelines are notcomplete applicable;5. Investors shall fully understand the differences of trading rules between B-shares andA-shares;6. Stock code of trade declaration of A-shares of Midea Group is 000333 and name ofsecurities is “Midea Group”7. Investors shall continuously pay attention to relevant announcements issued by LittleSwan and Midea Group and learn the progress of this stock-for-stock merger;8. In accordance with the Guidelines on the Registration and Settlements Service ofB-share Business, the shareholders of Little Swan B-shares may appoint agent to applyto CSDC Shenzhen Branch for the share adjustment of the agent account 23 May 2019.9. Investors may inquire of the securities company where the transfer registrationrestricted account is made about the specific ways of business operation relating to theaccount conversion.
10. Foreign institutional investors may inquire Foshan Branch of ChinaMerchants Bank about how to open an NRA account and exchangecurrencies.
Section I Business-related Organizations
| Full name of organization | Abbreviation in this guidelines | Main relevant matters |
| Midea Group Co., Ltd. | Midea Group | Information disclosure |
| Wuxi Little Swan Company Limited | Little Swan, Little Swan B | Information disclosure |
| China Securities Depository and Clearing Corporation Limited | CSDC | Allocation of transfer registration restricted account |
| Shenzhen Stock Exchange | SZSE | Restrictions on buy order declaration of transfer registration restricted account |
| CITIC Securities Co., Ltd | CITIC Securities | Provide business consultation and handling service for the investor involved in this account conversion. |
| Domestic securities companies | Domestic securities companies | Handle all business applications of investors and consultation, communication and notice; assist investors in opening common A-shares account the transfer registration restriction account in the trading system and assist investors to complete the handling formalities of third party custody meanwhile. |
| Foshan Branch of China Merchants Bank | Foshan Branch of CMBC | Handle applications of foreign institutional investors regarding to opening of NRA, provide services related to currency exchange such as consultation, communication and notice and assist investors to exchange currencies and remit funds as required by relevant foreign |
Section II Determine the Securities Account and Custody Unit of A-shares of
Midea Group
As the existing B-shares security account of Little Swan B-shares investors cannot bedirectly registered as A-shares of Midea Group, and SZSE implements the sharescustody transfer trading system, one investor may have more than one custody unitunder one securities account. Therefore, securities account and custody unit ofA-shares of Midea Group will be determined in accordance with the principles shownbelow after stock conversion:
1. Investor who would designate its securities account and custody unit byhimself/herself may contact CITIC Securities and designate the future securitiesaccount and custody unit of Midea Group A-shares prior to 30 May 2019.Manners to declare securities account and custody unit: Please complete theDeclaration for the Securities Account and Custody Unit of B-share Investors forNon-domestic Transaction of Little Swan (refer to Appendix 2 for details) and thesecurities company of designated custody unit of A-shares shall send the followingdocuments to sndd@citics.com;1) Copy and paste the completed Declaration for the Custody Unit of B-share Investorsfor Non-domestic Transaction in the body of the message;2) Print and seal the completed Declaration for the Custody Unit of B-share Investorsfor Non-domestic Transaction, and send the scanned copy as an attachment of themessage.At the time of declaration, please completely declare the information on the securitiesaccount and custody unit of A-shares. In case the information would be declared formore than one times, the full declaration information which is received last by ourcompany will prevail.2. If the A-share securities account of investors is not declared before the appointedexpiration date, the converted A-shares of Midea Group will be registered intotransfer registration restricted account for relevant investors by China SecuritiesDepository and Clearing Corporation Limited. Please refer to “Section III Transfer
Registration Restricted Account” in this chapter. To offer convenience to investors, ourcompany entrusts CITIC Securities to provide default custody unit. In case the foreigninvestors for non-domestic transaction of B-share don’t declare his/her custody unit toCITICS Securities before 30 May 2019, the A-shares of Midea Group obtained will beautomatically held in custody in the custody unit of Shennan Avenue BusinessDepartment of CITIC Securities Co., Ltd. The aforesaid investor will not carry outtransaction, custody transfer and other operation until he/she handles related formalitiessuch as opening fund account in Shennan Avenue Business Department of CITICSecurities Co., Ltd.If there are any questions, please contact Shennan Avenue Business Department ofCITIC Securities Co., Ltd.Contact information relating to the consultation and business of CITIC Securities:
Contact person: Shennan Avenue Business Department of CITIC Securities Co., Ltd.Address: 301A, A building, Xinian Center, No. 6021, Shennan Avenue, Futian District,ShenzhenTel.: 86-0755-83477942 (He Ying) 86-0755-83477944 (Luo Yixi)
86-0755-83477915 (Yang Zheng) 86-0755-83477941 (Shao Qicong)Fax: 86-0755-83459951Email: sndd@citics.com
Section III Transfer Registration Restricted Account
I. Allocation of transfer registration restricted accountWith respect to the foreign institutional investors for non-domestic transaction withoutA-share securities account or without declaring A-share securities account, MideaGroup will apply to the CSDC to allocate transfer registration restricted account to theaforesaid free of any charge in accordance with the information of B-share securitiesaccount after the cash option business relating to the Little Swan B-shares has beencompleted. As this securities account is specially restricted, only the sell orderdeclaration can be made and other purposes are forbidden.As B-share securities account of investor is not opened in any domestic securitiescompany, the investor, after knowing relevant matters concerning this accountconversion, is required to designate one domestic securities company as that wherefuture transactions of transfer registration restricted account will be made (see SectionII of this Chapter for details). Investor is required to handle the formalities for openingfund account in this securities company and this securities company has opened thefund account of transfer registration restricted account of investor, then the inquiry andsell order declaration relating to the A-shares of Midea Group in the transferregistration restricted account can be made.Investor, after knowing relevant matters concerning this account conversion, isrequired to determine one securities company as that where future transactions oftransfer registration restricted account will be made and handle formalities for openingfund account in the business department of this securities company to achieve thenormal sale of A-shares of Midea Group from this transfer registration restrictedaccount. It is suggested that the aforesaid investor gives preference to the CITICSecurities as the securities company where future transactions of transfer registrationrestricted account will be made.II. Way of account openingFor detailed procedures relating to the account opening formalities, investor mayconsult the CITIC Securities.
Investor cannot make the sell order declaration of A-shares of Midea Group until thesecurities company where future transactions of transfer registration restricted accountwill be made has been determined and account has opened in this securities company.Investor may contact CITIC Securities (entrusted by Midea Group) and inquire aboutthe information relating to the transfer registration restricted account.Meanwhile, investor may also contact CITIC Securities and consult the businessprocedures relating to the account opening, subsequent operations of transferregistration restricted account, etc. involved in this account conversion, and maycomplete the handling of aforesaid businesses in CITIC Securities. Investor, afterknowing details of relevant businesses, may also choose other domestic securitiescompanies and handle relevant businesses. For procedures for handling businesses,investor may consult the securities company chosen by him/her.Contact information relating to the consultation and business of CITIC Securities:
Contact person: Shennan Avenue Business Department of CITIC Securities Co., Ltd.Address: 301A, A building, Xinian Center, No. 6021, Shennan Avenue, Futian District,ShenzhenTel.: 86-0755-83477942 (He Ying) 86-0755-83477944 (Luo Yixi)
86-0755-83477915 (Yang Zheng) 86-0755-83477941 (Shao Qicong)Fax: 86-0755-83459951Email: sndd@citics.comIII. Way of orderAfter the securities account where transactions of transfer registration restrictedaccount are made has completed account opening procedures for the investor, way ofsell order relating to the investor’s transfer registration restricted account will bedeclared in various ways of order that investor has applied to the business departmentof securities company where transactions of transfer registration restricted account aremade to open; where the online trading order has been opened, investor may login inthe online trading system through the fund account number and trading password setwhen opening account, inquire about the remaining A-shares of Midea Group and fundbalance of transfer registration restricted account and make sell order declaration.
IV. Real-time market situationInvestor may obtain the real-time market situation and information of and suspensionand resumption of trading relating to the A-shares of Midea Group through the existingmarket situation display channel and way of the securities company where transactionsof future transfer registration restricted account are made, such as on-site self-serviceterminal of business department, online trading client terminal, etc.V. Main trading rulesStock code of sell order declaration of A-shares of Midea Group is 000333, name ofsecurities is “Midea Group” and the way of sell order declaration is basically same asthe operation of B-shares.(I) Limit of changeA-shares shall not increase or decrease by 10% from the closing price of last tradingday within trading hours that day. Limit of change on ST shares and the shares that splitshare structure reform has not been finished is 5%.(II) Rotary trading systemThe T + 1 rotary trading system is implemented for the A-shares, namely, the sharesbrought that day can be sold in the following day. The investor relating to the transferregistration restricted account is only allowed to make the sell order declaration, so therotary trading is not applicable.(III) Trading unitFor A-share bought via bidding mode, the declared quantity shall be 100 shares or itsintegral multiple. One-off sale declaration shall be made for the remaining shares lessthan 100 shares.(IV) Minimum fluctuating priceMinimum fluctuating unit of declared price of A-shares is RMB 0.01.(V) Transaction dateMonday to Friday (excluding the national holidays and day of suspension of tradingstipulated by exchange);9:15 to 9:25 of each trading day is the stage of opening call auction, wherein:
9:15 a.m. to 9:20 a.m.: Accept the trade declaration and the cancellation
9:20 a.m. to 9:25 a.m.: Accept the trade declaration, but do not accept thedeclaration of cancellationThe order that is not made during the call auction will automatically enter into thecontinuous auction;From 9:30 to 11:30 and from 13:00 to 14:57 of each trading day is the time ofcontinuous auction;14:57 to 15:00 is the stage of closing call auctionVI. Liquidation and settlementSame rules are applied in transfer registration restricted account and ordinary A-sharesecurities account and shares are liquidated and settled on the T + 0 day, which meansthat the quantity of shares equal to the quantity of shares sold and concluded that day (Tday) by the investor will be decreased in the securities account that day; the RMB fundis settled on the T + 1 day, which means that the investor can withdraw the RMB fundobtained from the sale of shares that day (T day) in the following trading day (T + 1day).VII. Exchange of Currencies and Remittance of FundsWith respect to any foreign institutional investor for non-domestic transactions,to which this chapter is applicable, the reduction of A-shares of Midea Groupand obtaining of dividends in Reminbi through his/her transfer registrationrestricted account shall be pursuant to theNotice on Opening of AccountsInvolved in Share Reduction by and Dividends Attributable to ForeignShareholders of A-share Listed Companies and on Matters Related to ForeignExchange Control
Issued by the General Office of the People’s Bank of China
(Y.B.F [2009] No. 178) and relevant provisions of the foreign exchange control:
(1) The foreign institutional investor shall open the securities account ofA-shares in the securities company (Midea Group shall apply to CSDC to
allocate one transfer registration restricted account), open the temporary RMBdeposit NRA (Non-Resident Account) at the Foshan Branch of CMBC andconnect the securities account and NRA at the counter of the Foshan Branchof CMBC. The opening of an account by any foreign institutional investor shallmeet the requirements on anti-money laundering policy issued by internationalorganizations and countries such as the United Nation, United States ofAmerica and the European Union as well as the Chinese government.(2) The foreign institutional investor shall transfer the funds generated fromshareholding reduction or dividends into the NRA on the date when theaforesaid funds are transferred into the securities account and the balance ofthe securities account at the end of the T+1 day shall be zero. The funds inRenminbi generated from shareholding reduction or dividends cannot be usedor withdrawn if the foreign institutional investor has not completed the openingof NRA and the association of NRA and the securities account before theshareholding reduction of A-shares of Midea Group or dividends obtainingthrough the transfer registration restricted account.(3) The foreign institutional investor shall provide CMBC with the followingmaterials for purchase of foreign currency and outbound remittance:
1) Written application; (including application for settlement and sale of foreignexchange of CMBC, application for outbound remittance and writtenapplication of foreign institutional investor)2) A valid certificate of capital source;
3) Relevant tax registration form or tax payment receipt;4) Identification document of the applicant and the copy thereof (relevant letterof authorization notarized shall be provided with respect to any authorization);5) Business Registration Certificate for FDI of A-share Listed Companies(shareholding reduction of A-shares);6) Other materials required by State Administration of Foreign Exchange.(4) With respect to any foreign institutional investor who has reduced allA-shares held and funds generated from share reduction and dividends havebeen remitted through purchase of foreign currency or used domestically uponapproval in full, the securities account and deposit account shall be cancelledwithin five working days after the completion of the above procedures. If theforeign institutional investor fails to perform this obligation, the CMBC has theright to freeze the customer’s deposit account, manage as dormant accountand cancel forcibly when certain conditions are met.Note: If there is any adjustment on policies regarding foreign exchange controland cross-border RMB during the business period, the latest supervision andadministration requirements shall be observed.Foreign institutional investors may inquire Foshan Branch of China MerchantsBank about how to open an NRA account and exchange currencies.Contact information of Foshan Branch of CMBC:
Contact person: Huang Xiaopeng (Tel: 86-0757-81999101; Email:
huangxp8@cmbchina.com)
Contact person: Sun Guodong (Tel: 86-0757-81999113; Email:
sunguodong@cmbchina.com)
Contact person: Gu Ying (Tel: 86-0757-81999131; Email:
guying0917@cmbchina.com)
Address for materials sending: CMBC Building, Denghu East Road No. 12,Nanhai District, Foshan, Guangdong Province ( please contact the contactperson for confirmation before mailing).VIII. Capitalizing of common reserves, bonus shares and dividend distribution
The capitalizing of common reserves, registration of bonus shares and dividenddistribution relating to the shares in the transfer registration restricted account shall behandled by reference to the existing normal A-share account.
Section IV Trading Cost
The foreign investor who opens the transfer registration restricted account is required topay commission, stamp tax, etc. same as the current ordinary A-share securities accountand the foreign exchange purchase expenses of RMB to HKD and charges for remittance ofHKD. Currently, the foreign exchange purchase of HKD involves no additional
expenses and the exchange rate when purchasing foreign exchange uses the sellingprice of spot exchange of RMB to HKD on the day when the foreign exchange purchasebank purchasing foreign exchange. Charges for remittance of HKD are subject to thecharges of the foreign exchange purchase bank.
| Name of Trading cost | Rate | Ordinary B-share securities account | Ordinary A-share securities account | Transfer registration restricted account |
| Commission for domestic account opening securities company | Refer to original transaction commission of A-share or B-share | √ | √ | √ |
| Stamp tax | 0.1% (only charge the seller) | √ | √ | √ |
| Liquidation expense | 0.05% (charged based on the trading amount) | √ | ||
| Foreign exchange purchase expense | It is handled in accordance with the selling price of spot exchange of |
| of HKD | RMB to HKD when the foreign exchange bank purchasing of foreign exchange. | |||
| Charges for remittance of HKD | Charges for remittance of HKD are subject to the charges of the foreign exchange purchase bank. | √ | ||
| Handle fee | 0.0487‰ of trading Amount (charge the buyer and seller) | √ | √ | √ |
| Registration and transfer fee | 0.02‰ of the trading Amount (charge the buyer and seller) | √ | √ | |
| Supervision fee | 0.02‰ of the trading Amount (charge the buyer and seller) | √ | √ | √ |
Section V Inquiry Business
After Little Swan B-shares are converted into the A-shares of Midea Group, theinvestor may inquire about the remaining securities in the account and balance of fundin the current inquiry way relating to the securities account in the securities companywhere transactions of transfer registration restricted account are made.In addition, all investors may obtain all the disclosed information relating to thisstock-for-stock conversion from the website of SZSE (http://www.szse.cn/).
Section VI Change of Account Information
The information relating to the transfer registration restricted account is copied fromcurrent information of investor’s B-share securities. The investor whose identityinformation is changed is required to contact the securities company promptly, which isrequired to promptly handle the information change to the B-share securities accountand transfer registration restricted account to ensure consistency.
Section VII General Meeting of Shareholders
Investor may attend the General Meeting of Shareholders and make the voting on thescene in person or by proxy. With respect to the investor who intends to be present at themeeting, at the day of General Meeting of Shareholders, individual investor shall holdstock account card (the investor allocated the transfer registration restricted accountmay only hold the original B-share securities account card), personal ID card or othervalid certificates or paper of identification that can prove the identity); representative ofinstitutional investor shall hold the stock account card of the unit of shareholder (theinvestor allocated the transfer registration restricted account may only hold the originalB-share securities account card) and certificate provided by the unit of shareholderwhen attending the General Meeting of Shareholders. Agent shall also present thepower of attorney and valid personal ID.After having determined the domestic securities company where transactions oftransfer registration account will be made and handled account opening procedures inthis securities company, investor may make the online voting in accordance with thecurrent voting procedures for the ordinary A-share securities account.Investor who has not determined the securities company where future transactions oftransfer registration restricted account will be made and handled account openingprocedures in this securities company is required to contact Midea Group and attend theGeneral Meeting of Shareholders and vote by himself/herself.Contact information of Midea Group:
Address: No. 26-28 building, B area, Headquarters Bulding of Midea, No. 6 MideaAvenue, Beijiao Town, Shunde District, Foshan.
Contact person: Jiang PengTel.: 0757-26637438Fax: 0757-26605456
Section VIII Allotment of Shares
Before foreign residents can subscribe A-shares, or foreign residents sell all A-shares ofMidea Group held by them, A-shares of Midea Group will take the fact that the part oftrading rights relating to the A-share securities account are restricted with extremecaution and fully consider fairness of participation right of various investors whenhandling relevant matters including allotment of shares.
Section IX Cancellation of Transfer Registration Restricted Account
When remaining A-shares of Midea Group in the transfer registration restrictedaccount of investor is zero, the securities company where transactions of transferregistration restricted account are made may cancel the transfer registration restrictedaccount.
Section X Pledge, Freezing and Non-trading Transfer of Account
1. Pledge, non-trading transfer business: are handled in accordance with relevantbusiness rules of CSDC.2. Judicial business: is implemented with assistance provided by each securitiescompanies and CSDC.
Appendix 1
Declaration Table for the Corresponding Relationship between the SecuritiesAccount and Custody Unit of A-shares and the Securities Account and Custody
Unit of B-shares
| Serial No. | Name of person participating into settlement | Name of shareholder of Little Swan | B-share account number of shareholder of Little Swan | A-share account number of shareholder of Little Swan (if any) | Number of shares held by shareholder of Little Swan | Custody unit of B-share | Custody unit of A-share | ||
| No. of custody unit | Name of custody unit | No. of custody unit | Name of custody unit | ||||||
| 1 | |||||||||
| 2 | |||||||||
Handler: Contact number:
Full name of person participating in settlement:
(Company’s stamp)Date:
Appendix 2:
Declaration for the Securities Account and Custody Unit of B-share Investors of
Non-domestic Transaction of Little SwanI/Our company, (ID number/unified social creditcode： ,Security account number of ShenzhenStock： , is the foreign investor for non-domestic transaction ofLittle Swan B-shares. since I/our company has determined matters of custody with thedomestic securities company (name of securitiescompany: ), I/our company herein declare that all
A-shares of Midea Group (stock code: 000333) obtained by converting the Little Swan
B-shares held by me/our company, (totally shares), will beregistered in (number of securities account, if any) , and will beheld in custody in (name of securities company) , whoseA-share seat No. in Shenzhen Stock Exchange is： .
Name of applicant:
Type of identity document of the applicant:
Number of identity document of the applicant:
Signed/stamped by the applicant:
Application date:
Handler of securities company: , Contact number:
Full name of person participating in settlement of Securities Company (company’sseal):
Date:
(This page marks the end of this document with the company stamp on TheOperational Guidelines for Investors on the B-to-A-Stock Account Conversion withregard to the Stock-for-Stock Merger of Wuxi Little Swan Company Limited by MideaGroup Co., Ltd. and the Related-Party Transaction.)
Wuxi Little Swan Company LimitedDate: