During the 2017 fourth quarter reporting season, several companies with registered equity plans in China received courtesy phone calls from the SAFE office in Beijing reminding them to timely submit their quarterly reports. During the same time period, Beijing SAFE also communicated that starting with quarterly reports for fiscal year 2018, it will review the quarterly reports more closely and will be monitoring the submission date of these quarterly reports (the deadline is three business days from the end of the quarter).

Separately, the SAFE office in Shanghai also began raising questions on certain discrepancies in repatriated amount as reported in a company's quarterly reports and its annual re-registration application, and made other comments signaling an intention to scrutinize quarterly reports more than in the past.

In light of these recent developments, it has become abundantly clear that the various SAFE bureaus will be placing greater focus on the quarterly reporting requirements for SAFE approved equity compensation plans. As such, we recommend that companies prepare their quarterly reports earlier and with greater care to ensure the reports are accurately and timely filed before the deadline.