Chapter I General Provisions
Article 1 The present Law is formulated for the purpose of
regulating the issuance and transaction of securities, protecting
the lawful rights and interests of investors, safeguarding the
economic order and public interests of the society and promoting
the growth of the socialist market economy.
Article 2 The present Law shall be applied to the issuance and
transaction of stocks, corporate bonds as well as any other
securities as lawfully recognized by the State Council within the
territory of the People's Republic of China. Where there is no such
provision in the present Law, the provisions of the Corporation Law
of the People's Republic of China and other relevant laws and
administrative regulations shall be applied. Any listed trading of
government bonds and share of securities investment funds shall be
governed by the present Law. Where there is any special provision
in any other law or administrative regulation, the special
provision shall prevail. The measures for the administration of
issuance and transaction of securities derivatives shall be
prescribed by the State Council according to the principles of the
present Law.
Article 3 The issuance and transaction of securities shall
adhere to the principles of openness, fairness and
impartiality.
Article 4 The parties involved in any issuance or transaction of
securities shall have equal legal status and shall persist in the
principles of free will, compensation and integrity and
creditworthy.
Article 5 The issuance and transaction of securities shall
observe laws and administrative regulations. No fraud, insider
trading or manipulation of the securities market may be
permitted.
Article 6 The divided operation and management shall be adopted
by the industries of securities, banking, trust as well as
insurance. The securities companies and the business organs of
banks, trust and insurance shall be established separately, unless
otherwise provided for by the state.
Article 7 The securities regulatory authority under the State
Council shall adopt a centralized and unified supervision and
administration of the national securities market. The securities
regulatory authority under the State Council may, in light of the
relevant requirements, establish dispatched offices, which shall
perform their duties and functions of supervision and
administration upon the authorization.
Article 8 Under the centralized and unified supervision and
administration of the state regarding the issuance and transaction
of securities, a securities industrial association shall be
lawfully established, which shall adopt the self-regulating
administration.
Article 9 The auditing organ of the state shall carry out
auditing supervision of stock exchanges, securities companies,
securities registration and clearing institutions and securities
regulatory bodies.
Chapter II Issuance of Securities
Article 10 A public issuance of securities shall satisfy the
requirements of the relevant laws and administrative regulations
and shall be reported to the securities regulatory authority under
the State Council or a department upon authorization by the State
Council for examination and approval according to law. Without any
examination and approval according to law, no entity or individual
may make a public issuance of any securities. It shall be deemed as
a public issuance upon the occurrence of any of the following
circumstances:
(1) Making a public issuance of securities to non-specified
objects;
(2) Making a public issuance of securities to accumulatively
more than 200 specified objects;
(3) Making a public issuance as prescribed by any law or
administrative regulation. For any securities that are not issued
in a public manner, the means of advertising, public inducement or
public issuance in any disguised form may not be adopted
thereto.
Article 11 An issuer that files an application for public
issuance of stocks or convertible corporate bonds by means of
underwriting according to law or for public issuance of any other
securities, to which a recommendation system is applied, as is
prescribed by laws and administrative regulations, shall employ an
institution with the qualification of recommendation as its
recommendation party. A recommendation party shall abide by
operational rules and industrial norms and, on the basis of the
principles of being honesty, creditworthy, diligent and
accountable, carry out a prudent examination of application
documents and information disclosure materials of its issuers as
well as supervise and urge its issuers to operate in a regulative
manner. The qualification of the recommendation party as well as
the relevant measures for administration shall be formulated by the
securities regulatory authority under the State Council.
Article 12 A public offer of stocks for establishing a
stock-limited company shall satisfy the requirements as prescribed
in the Corporation Law of the People's Republic of China as well as
any other requirements as prescribed by the securities regulatory
authority under the State Council, which have been approved by the
State Council. An application for public offer of stocks as well as
the following documents shall be reported to the securities
regulatory authority under the State Council:
(1) The constitution of the company;
(2) The promoter's agreement;
(3) The name or title of the promoter, the amount of shares as
subscribed by the promoter, the category of contributed capital as
well as the capital verification certification;
(4) The prospectus;
(5) The name and address of the bank that receives the funds as
generated from the issuance of stocks on the behalf of the company;
and
(6) The name of the underwriting organization as well as the
relevant agreements. In case a recommendation party shall be
employed, as prescribed by the present Law, the Recommendation
Letter of Issuance as produced by the recommendation party shall be
submitted as well. In case the establishment of a company shall be
reported for approval, as prescribed by laws and administrative
regulations, the relevant approval documents shall be submitted as
well.
Article 13 An initial public offer (IPO) of stocks of a company
shall satisfy the following requirements:
(1) Having a complete and well-operated organization;
(2) Having the capability of making profits successively and a
sound financial status;
(3) Having no false record in its financial statements over the
latest 3 years and having no other major irregularity; and
(4) Meeting any other requirements as prescribed by the
securities regulatory authority under the State Council, which has
been approved by the State Council. A listed company that makes any
initial non-public offer of stocks shall satisfy the requirements
as prescribed by the securities regulatory authority under the
State Council, which have been approved by the State Council and
shall be reported to the securities regulatory authority under the
State Council for examination and approval.
Article 14 A company that makes an IPO of stocks shall apply for
public offer of stocks as well as the following documents to the
securities regulatory authority under the State Council:
(1) The business license of the company;
(2) The constitution of the company;
(3) The resolution of the general assemble of shareholders;
(4) The prospectus;
(5) The financial statements;
(6) The name and address of the bank that receives the funds as
generated from the public offer of stocks on the behalf of the
company; and
(7) The name of the underwriting institution as well as the
relevant agreements. In case a recommendation party shall be
employed, as prescribed by the present Law, the Recommendation
Letter of Issuance as produced by the recommendation party shall be
submitted as well.
Article 15 The funds as raised through public offer of stocks as
made by a company shall be used according to the ion by the State
Council for examination and approval according to law. Without any
examination and approval according to law, no entity or individual
may make a public issuance of any securities. It shall be deemed as
a public issuance upon the occurrence of any of the following
circumstances:
(1) Making a public issuance of securities to non-specified
objects;
(2) Making a public issuance of securities to accumulatively
more than 200 specified objects; or
(3) Making a public issuance as prescribed by any law or
administrative regulation. For any securities that are not issued
in a public manner, the means of advertising, public inducement or
public issuance in any disguised form may not be adopted
thereto.The funds as raised through public offer of stocks as made
by a company shall be used according to the purpose as prescribed
in the prospectus. Any alteration of the use of funds as prescribed
in the prospectus shall be subject to a resolution of the general
assembly of shareholders. In case a company fails to correct any
unlawful alteration of its use of funds or where any alteration of
its use of funds fails to be adopted by the general assembly of
shareholders, the relevant company may not make any IPO of stocks.
In the foregoing circumstance, a listed company may not make any
non-public offer of stocks.
Article 16 A public issuance of corporate bonds shall satisfy
the following requirements:
(1) The net asset of a stock-limited company being no less than
RMB 30 million yuan and the net asset of a limited-liability
company being no less than RMB 60 million yuan;
(2) The accumulated bond balance constituting no more than 40 %
of the net asset of a company;
(3) The average distributable profits over the latest 3 years
being sufficient to pay the 1-year interests of corporate
bonds;
(4) The investment of raised funds complying with the industrial
policies of the state;
(5) The yield rate of bonds not surpassing the level of interest
rate as qualified by the State Council; and
(6) Meeting any other requirements as prescribed by the State
Council. The funds as raised through public issuance of corporate
bonds shall be used for the purpose as verified and may not be used
for covering any deficit or non-production expenditure. The public
issuance of convertible corporate bonds as made by a listed company
may not only meet the requirements as provided for in paragraph 1
herein but also meet the requirements of the present Law on public
offer of stocks, and shall be reported to the securities regulatory
authority under the State Council for examination and approval.
Article 17 With regard to an application for public issuance of
corporate bonds, the following documents shall be reported to the
department as authorized by the State Council or the securities
regulatory authority under the State Council:
(1) The business license of the company;
(2) The constitution of the company;
(3) The procedures for issuing corporate bonds;
(4) An assent appraisal report and an asset verification report;
and
(5) Any other document as prescribed by the department as
authorized by the State Council or by the securities regulatory
authority under the State Council. In case a recommendation party
shall be employed, as prescribed by the present Law, the
Recommendation Letter of Issuance as produced by the recommendation
party shall be submitted as well.
Article 18 In any of the following circumstances, no more public
issuance of corporate bonds may be carried out:
(1) Where the corporate bonds as issued in the previous public
issuance haven't been fully subscribed;
(2) Where a company has any default on corporate bonds as
publicly issued or on any other liabilities, or postpones the
payment of the relevant principal plus interests, and such
situation is still continuing; or
(3) Where a company violates the present Law by altering the use
of funds as raised through public issuance of corporate bonds.
Article 19 The formats and reporting ways of application
documents as reported by an issuer for examination and approval of
securities issuance according to law shall be prescribed by the
legally competent organ or department in charge of examination and
approval.
Article 20 The application documents for securities issuance as
reported by an issuer to the securities regulatory authority under
the State Council or the department as authorized by the State
Council shall be authentic, accurate and integrate. A securities
trading service institution and its staff that produces the
relevant documents for securities issuance shall strictly perform
its/his statutory duties and functions and guarantee the
authenticity, accuracy and integrity of the documents as produced
thereby.
Article 21 Where an issuer files an application for an IPO of
stocks, it shall, upon submitting the application documents,
disclose the relevant application documents in advance according to
the provisions of the securities regulatory authority under the
State Council.
Article 22 The securities regulatory authority under the State
Council shall establish an issuance examination committee, which
shall examine the applications for stock issuance according to law.
The issuance examination committee shall be composed of the
professionals from the securities regulatory authority under the
State Council and other relevant experts from outside the said
authority, adopt the means of voting for the determination of
applications for stock issuance and set forth the opinions on
examination. The specific formulation measures, tenure of members
as well as work procedures of the issuance examination committee
shall be formulated by the securities regulatory authority under
the State Council.
Article 23 The securities regulatory authority under the State
Council shall take charge of the examination and approval of
applications for stock issuance in light of the statutory
requirements. The procedures for examination and approval shall be
publicized and shall be subject to supervision according to law.
The personnel participating in the examination and verification of
stock issuance may not have any interest relationship with an
issuance applicant, may not directly or indirectly accept any
present of the issuance applicant, may not hold any stock as
verified for issuance and may not have any private contact with an
issuance applicant. The department as authorized by the State
Council shall conduct the examination and approval of applications
for issuance of corporate bonds by referring to the preceding 2
paragraphs herein.
Article 24 The securities regulatory authority under the State
Council or the department as authorized by the State Council shall,
within 3 months as of acceptance of an application for securities
issuance, make an decision on approval or disapproval according to
the statutory requirements and procedures, whereby the time for an
issuer to supplement or correct its application documents for
issuance according to the relevant requirements may not be
calculated within the aforesaid term for examination and approval.
In the event of disapproval, an explanation shall be given in
writing.
Article 25 Where an application for securities issuance has been
approved, the relevant issuer shall, in accordance with the
provisions of the relevant laws and administrative regulations,
announce the relevant financing documents of public issuance before
publicly issuing any securities and shall make the aforesaid
documents available for public reference in designated places.
Before the information of securities issuance is publicized
according to law, no insider may publicize or indulge the relevant
information. An issuer may not issue any securities before an
announcement of the relevant financial documents of public
issuance.
Article 26 The securities regulatory authority under the State
council or the department as authorized by the State Council shall,
where finding any decision on approving securities issuance fails
to comply with the relevant statutory requirements and procedures
and if the relevant securities haven't been issued, revoke the
decision on approval and terminate the issuance. As to any
securities that have been issued but haven't been listed, the
relevant decision on approval for issuance shall be revoked. The
relevant issuer shall, according to the issuing price plus
interests as calculated at the bank deposit rate for the
corresponding period of time, return the funds to securities
holders. A recommendation party shall bear the joint and several
liabilities together with the relevant issuer, except for one who
is able to prove his exemption of fault. Where any controlling
shareholder or actual controller has any fault, he shall bear the
joint and several liabilities together with the relevant
issuer,
Article 27 After a legal offer of stocks, an issuer shall be
liable for any alteration of its operation or its profits by
itself. The investment risk as incurred therefrom shall be borne by
investors by themselves.
Article 28 Where an issuer issues any securities to any
non-specified object and if the said securities shall be
underwritten by a securities company, as is provided for by laws
and administrative regulations, the issuer shall conclude an
underwriting agreement with a securities company. The forms of
"sale by proxy" and "exclusive sale" shall be adopted for the
underwriting operation of securities. The term "sale by proxy"
refers to an underwriting form, whereby a securities company sells
securities as a proxy of the relevant issuer and, upon the
conclusion of the underwriting period, returns all the securities
unsold to the relevant issuer. The term "exclusive sale" refers to
an underwriting form, whereby a securities company purchases all of
the securities of an issuer according to the agreement there
between or purchases all of the residing unsold securities by
itself upon the conclusion of the underwriting period.
Article 29 An issuer that makes public issuance of securities
has the right to select a securities company for underwriting
according to law at its own will. A securities company may not
canvass any securities underwriting business by any unjust
competition means.
Article 30 Where a securities company underwrites any
securities, it shall reach an agreement with the relevant issuer on
sale by proxy or exclusive sale, which shall indicate the following
items:
(1) The name, domicile as well as the name of the legal
representative of the parties concerned;
(2) The classes, quantity, amount as well as issuing prices of
the securities under sale by proxy or exclusive sale;
(3) The term of sale by proxy or exclusive sale as well as the
start-stop date;
(4) The means and date of payment for sale by proxy or exclusive
sale;
(5) The expenses for and settlement methods of sale by proxy or
exclusive sale;
(6) The liabilities of breach; and
(7) Any other matter as prescribed by the securities regulatory
authority under the State Council.
Article 31 A securities company that is engaged in the underwriting
of securities shall carry out verification on the authenticity,
accuracy and integrity of the financing documents of public
issuance. Where any false record, misleading statement or major
omission is found, no sales activity may be carried out. Where any
securities have been sold out under the foregoing circumstances,
the relevant sales activity shall be immediately terminated and
measures for correction shall be taken.
Article 32 Where the total face value of securities as issued to
non-specified objects is beyond RMB 50 million yuan, the said
securities shall be underwritten by an underwriting syndicate. An
underwriting syndicate shall be composed of securities companies
acting as principal underwriters and participant underwriters.
Article 33 The term for sale by proxy or exclusive sale may not
exceed 90 days at the most. A securities company shall, within the
term of sale by proxy or exclusive sale, guarantee the priority of
the relevant subscribers in purchasing securities under sale by
proxy or exclusive sale. A securities company may not reserve in
advance any securities under sale by proxy thereby or purchase in
advance and sustain any securities under exclusive sale
thereby.
Article 34 Where any stock is issued at a premium, the issuing
price thereof shall be agreed on through negotiation of the
relevant issuer and the securities company that is engaged in
underwriting.
Article 35 As to a public offer of stocks through sale by proxy,
when the term of sale by proxy expires and if the quantity of
stocks fails to reach 70 % of the planned quantity in a public
offer, it shall be deemed as a failure. The relevant issuer shall
return the issuing price plus interests as calculated at the bank
deposit rate for the contemporary period of time to the subscribers
of stocks.
Article 36 In a public offer of stocks, when the term for sale
by proxy or exclusive sale expires, an issuer shall report the
information on stock issuance to the securities regulatory
authority under the State Council for archival purpose within the
prescribed time.
Chapter III Transaction of Securities
Section I General Provisions
Article 37 The securities as purchased and sold by any party who
is involved in any securities transaction shall be the securities
that have been legally issued and delivered. No securities that
have been illegally issued may be purchased or sold.
Article 38 All stocks, corporate bonds or any other securities
that have been legally issued, where there are any restrictive
provisions of laws on the term of transfer thereof, may not be
purchased or sold within the restrictive term.
Article 39 All stocks, corporate bonds or any other securities
that have been publicly issued according to law shall be listed in
a stock exchange as legally established or in any other places for
securities transaction as approved by the State Council.
Article 40 The means of public and centralized transaction or
any other means as approval by the securities regulatory authority
under the State Council shall be adopted for listed trading of
securities in stock exchanges.
Article 41 The securities as purchased or sold by the parties
involved in securities transaction may be in paper form or in any
other form as approved by the securities regulatory authority under
the State Council.
Article 42 The securities transaction shall be carried out in
the form of spot goods as well as any other form as prescribed by
the State Council.
Article 43 The practitioners in stock exchanges, securities
companies as well as securities registration and clearing
institutions, the functionary of securities regulatory bodies as
well as any other personnel who have been prohibited by laws and
administrative regulations from engaging in any stock transaction
shall, within their tenures or the relevant statutory term, not
hold or purchase or sold any stock directly or in any assumed name
or in a name of any other person, nor may they accept any stocks
from any other person as a present. Anyone, when becoming any
person as prescribed in the preceding paragraph herein, shall
transfer the stocks he has held according to law.
Article 44 The stock exchanges, securities companies as well as
securities registration and clearing institutions shall keep secret
for the accounts as opened for their clients according to law.
Article 45 A securities trading service institution and the
relevant personnel that produce such documents as auditing reports,
asset appraisal reports or legal opinions for stock issuance may
not purchase or sell any of the aforesaid stocks within the
underwriting term of stocks or within 6 months as of the expiration
of the underwriting term of stocks.Except for the provisions as
prescribed in the preceding paragraph herein, a securities trading
service institutions and the relevant personnel that produce such
documents as auditing reports, asset appraisal reports or legal
opinions for listed companies may not purchase or sell any of the
aforesaid stocks within the period from the day when an entrustment
of a listed company is accepted to the day when the aforesaid
documents are publicized.
Article 46 The charge for securities transaction shall be
reasonable. The charging items, standards as well as methods shall
be publicized. The charging items, standards and administrative
measures of securities transaction shall be uniformly formulated by
the relevant administrative department under the State Council.
Article 47 Where any director, supervisor and senior manager of
a listed company or any shareholder who holds more than 5% of the
shares of a listed company, sells the stocks of the company as held
within 6 months after purchase, or purchases any stock as sold
within 6 months thereafter, the proceeds generated therefrom shall
be incorporated into the profits of the relevant company. The board
of directors of the company shall withdraw the proceeds. However,
where a securities company holds more than 5% of the shares of a
listed company, which are the residing stocks after sale by proxy
as purchased thereby, the sale of the foregoing stocks may not be
limited by a term of 6 months. Where the board of directors of a
company fails to implement the provisions as prescribed in the
preceding paragraph herein, the shareholders concerned have the
right to require the board of directors to implement them within 30
days. Where the board of directors of a company fails to implement
them within the aforesaid term, the shareholders have the right to
directly file a litigation with the people's court in their own
names for the interests of the company. Where the board of
directors of a company fail to implement the provisions as
prescribed in paragraph 1herein, the directors in charge shall bear
the joint and several liabilities according to law.
Section II Listing of Securities
Article 48 An application for the listing of any securities
shall be filed with a stock exchange and shall be subject to the
examination and approval of the stock exchange according to law and
a listing agreement shall be reached by both parties. The stock
exchanges shall, according to the decision of the department as
authorized by the State Council, arrange the listing of government
bonds.
Article 49 As for an application for the listing of any stocks,
convertible corporate bonds or any other securities, to which a
recommendation system is applied, as prescribed by laws and
administrative regulations, an institution with the qualification
of recommendation shall be employed as the recommendation party.
The provisions of paragraphs 2 and 3 of Article 11 of the present
Law shall be applied to the recommendation party of listing.
Article 50 A stock-limited company that files an application for
the listing of its stocks shall satisfy the following
requirements:
(1) The stocks shall have been subject to the examination and
approval of the securities regulatory authority under the State
Council and shall have been publicly issued;
(2) The total amount of capital stock shall be no less than RMB
30 million yuan;
(3) The shares as publicly issued shall reach more than 25 % of
the total amount of corporate shares; where the total amount of
capital stock of a company exceeds RMB 0.4 billion yuan, the shares
as publicly issued shall be no less than 10% thereof; and
(4) The company may not have any major irregularity over the
latest years and there is no false record in its financial
statements. A stock exchange may prescribe the requirements of
listing that are more strict than those as prescribed in the
preceding paragraph herein, which shall be reported to the
securities regulatory authority under the State Council for
approval.
Article 51 The state encourages the listing of corporate stocks
that comply with the relevant industrial policies and fulfill the
relevant requirements of listing.
Article 52 With regard to an application for the listing of
stocks, the following documents shall be reported to a stock
exchange:
(1) The listing report;
(2) The resolution of the general assembly of shareholders
regarding the application for the listing
of stocks;
(3) The constitution of the company;
(4) The business license of the company;
(5) The financial statements of the company for the latest years
as audited by an accounting firm according to law;
(6) The legal opinions as well as the Recommendation Letter of
Listing;
(7) The latest prospectus; and
(8) Any other document as prescribed by the listing rules of the
stock exchange.
Article 53 Where an application for the listing of stocks has
been subject to the examination and approval of a stock exchange,
the relevant company that has reached a listing agreement thereon
shall announce the relevant documents for stock listing within the
prescribed period and shall make the said documents available for
public reference in designated places.
Article 54 A company that has reached a listing agreement may
not only announce the documents as prescribed in the preceding
Article herein but also announce the following items:
(1) The date when the stocks have been approved to be listed in
a stock exchange;
(2) The name list of the top 10 shareholders who hold the
largest number of shares in the company as well as the amount of
stocks as held thereby;
(3) The actual controller of the company; and
(4) The names of the directors, supervisors and senior managers
of the company as well as the relevant information on the stocks
and bonds of the company as held thereby.
Article 55 Where a listed company is in any of the following
circumstances, the stock exchange shall decide to suspend the
listing of its stocks:
(1) Where the total amount of capital stock or share
distribution of the company changes and thus, fails to meet the
requirements of listing;
(2) Where the company fails to publicize its financial status
according to the relevant provisions or has any false record in its
financial statements, which may mislead the investors;
(3) Where the company has any major irregularity;
(4) Where the company has been operating at a loss for the
latest 3 consecutive year; or
(5) Under any other circumstance as prescribed in the listing
rules of the stock exchange.
Article 56 Where a listed company is in any of the following
circumstances, the stock exchange shall decide to terminate the
listing of its stocks:
(1) Where the total amount of capital stock or share
distribution of the company changes and thus, fails to meet the
requirements of listing, and where the company fails again to meet
the requirements of listing within the period as prescribed by the
stock exchange;
(2) Where the company fails to publicize its financial status
according to the relevant provisions or has any false record in its
financial statements, and refuses to make any correction;
(3) Where the company has been operating at a loss for the
latest 3 consecutive years and fails to gain profits in the year
thereafter;
(4) Where the company is dissolved or is announce bankruptcy;
or
(5) Under any other circumstance as prescribed in the listing
rules of the stock exchange.
Article 57 A company shall, when applying for the listing of
corporate bonds, fulfill the following requirements:
(1) The term of corporate bonds shall be more than 1 year;
(2) The amount of corporate bonds to be actually issued shall be
no less than RMB 50 million yuan; and
(3) The company shall meet the statutory requirements for the
issuance of corporate bonds when applying for the listing of its
bonds.
Article 58 A company shall, when filing an application for the
listing of its corporate bonds, report the following documents to a
stock exchange:
(1) The listing report;
(2) The resolution as adopted by the board of directors
regarding the application for listing;
(3) The constitution of the company;
(4) The business license of the company;
(5) The measures for financing through the issuance of corporate
bonds;
(6) The amount of corporate bonds to be actually issued; and
(7) Any other document as prescribed in the listing rules of the
stock exchange. With regard to an application for the listing of
convertible corporate bonds, the Recommendation Letter of Listing
as produced by the relevant recommendation party shall be
reported.
Article 59 Where an application for the listing of corporate
bonds has been subject to the examination and approval of the stock
exchange, the company that has reached a listing agreement thereon
shall, within the prescribed period, announce its report on the
listing of its corporate bonds as well as the relevant documents
and make its application documents available for public reference
in designated places.
Article 60 After any corporate bonds are listed, where the
relevant company is in any of the following circumstances, the
stock exchange may decide to suspend the listing of its corporate
bonds:
(1) Where the company has any major irregularity;
(2) Where the company has any major change and thus fails to
meet the requirements for the listing of corporate bonds;
(3) Where the funds as raised through the issuance of corporate
bonds fail to be used according to the purpose as verified;
(4) Where the company fails to perform its obligations according
to the measures for financing through the issuance of corporate
bonds; or
(5) Where the company has been operating at a loss for the
latest 2 consecutive years.
Article 61 Where a company is in any of the circumstances as
described in item (1) or (4) of the preceding Article herein and
the consequences as incurred therefrom have been verified to be
serious, or where a company is under any of the circumstances as
described in any of item (2), (3), or (5) of the preceding Article
herein and fails to eliminate the relevant consequence within a
specified time limit, the stock exchange shall decide to terminate
the listing of corporate bonds of the company. In case a company is
dissolved or declared bankrupt, the stock exchange shall terminate
the listing of corporate bonds thereof.
Article 62 Any company, which is dissatisfied with a decision of
a stock exchange on disapproving, suspending or terminating its
listing, may file an application for a review with the review organ
established by the stock exchange.
Section III On-going Information Disclosure
Article 63 The information as disclosed by issuers and listed
companies according to law shall be authentic, accurate and
integrate and may not have any false record, misleading statement
or major omission.
Article 64 As for the stocks that have been publicly issued upon
the verification of the securities regulatory authority under the
State Council or for the corporate bonds that have been publicly
issued upon the verification of the department as authorized by the
State Council according to law, the prospectus or the measures for
financing through the issuance of corporate bonds shall be
announced. In an IPO of stocks or corporate bonds, the relevant
financial statements shall be announced as well.
Article 65 A company whose shares or bonds have been listed for
trading shall, within two months as of the end of the first half of
each accounting year, submit to the securities regulatory authority
under the State Council and the stock exchange a midterm report
indicating the following contents and announce it:
(1) The financial statements and business situation of the
company;
(2) The major litigation involving the company;
(3) The particulars of any change concerning the shares or
corporate bonds thereof as already issued;
(4) The important matters as submitted to the general assembly
of shareholders for deliberation; and
(5) Any other matter as prescribed by the securities regulatory
authority under the State Council.
Article 66 A listed company whose shares or bonds have been
listed for trading shall, within four months as of the end of each
accounting year, submit to the securities regulatory authority
under the State Council and the stock exchange an annual report
indicating the following contents, and announce it:
(1) A brief account of the company's general situation;
(2) The financial statement and business situation of the
company;
(3) A brief introduction to the directors, supervisors, and
senior managers of the company well as the information regarding
their shareholdings;
(4) The information on shares and corporate bonds as already
issued, including the name list of the top 10 shareholders who hold
the largest numbers of shares in the company as well as the amount
of shares as held thereby;
(5) The actual controller of the company; and
(6) Any other matter as prescribed by the securities regulatory
authority under the State Council.
Article 67 In the event of a major event that may considerably
affect the trading price of a listed company's shares and that is
not yet known to the investors, the listed company shall
immediately submit a temporary report regarding the said major
event to the securities regulatory authority under the State
Council and the stock exchange and make an announcement to the
general public as well, in which the cause, present situation and
possible legal consequence of the event shall be indicated: The
term "major event" as mentioned in the preceding paragraph herein
refers to the following circumstances:
(1) A major change in the business guidelines or business scope
of the company;
(2) A decision of the company on any major investment or major
asset purchase;
(3) An important contract as concluded by the company, which may
have an important effect on the assets, liabilities, rights,
interests or business achievements of the company;
(4) Any incurrence of a major debt in the company or default on
an overdue major debt;
(5) Any incurrence of a major deficit or a major loss in the
company;
(6) A major change in the external conditions for the business
operation of the company;
(7) A change concerning directors, no less than one-third of
supervisors or managers of the company;
(8) A considerable change in the holdings of shareholders or
actual controllers who each hold or control no less than 5% of the
company's shares;
(9) A decision of the company on capital decrease, merger,
division, dissolution, or application for bankruptcy;
(10) Any major litigation involving the company, or where the
resolution of the general assembly of shareholders or the board of
directors have been cancelled or announced invalid;
(11) Where the company is involved in any crime, which has been
filed as a case as well as investigated into by the judicial organ
or where any director, supervisor or senior manager of the company
is subject to compulsory measures as rendered by the judicial
organ; or
(12) Any other matter as prescribed by the securities regulatory
authority under the State Council.
Article 68 The directors and senor managers of a listed company
shall subscribe their opinions for recognition in the periodic
report of their company in written form. The board of supervisors
of a listed company shall carry out an examination on the periodic
report of its company as formulated by the board of directors and
produce the relevant examination opinions in writing. The
directors, supervisors and senior managers of a listed company
shall guarantee the authenticity, accuracy and integrity of the
information as disclosed by their listed company.
Article 69 Where the prospectus, measures for financing through
issuance of corporate bonds, financial statement, listing report,
annual report, midterm report, temporary report or any information
as disclosed that has been announced by an issuer or a listed
company has any false record, misleading statement or major
omission, and thus incurs losses to investors in the process of
securities trading, the issuer or the listed company shall be
subject to the liabilities of compensation. Any director,
supervisor, senior manager or any other person of the issuer or the
listed company directly responsible shall be subject to the joint
and several liabilities of compensation, except for anyone who is
able to prove his exemption of any fault. Where any shareholder or
actual controller of an issuer or a listed company has any fault,
he shall be subject to the joint and several liabilities of
compensation together with the relevant issuer or listed
company.
Article 70 The information as prescribed by law to be disclosed
shall be publicized through the media as designated by the
securities regulatory authority under the State Council and shall,
at the same time, be made available for public reference at the
company's domicile and a stock exchange.
Article 71 The securities regulatory authority under the State
Council shall carry out supervision over annual reports, midterm
reports, temporary reports of listed companies as well as their
announcements, over the distribution or rationing of new shares of
such listed companies and over the controlling shareholders and any
other obligor of information disclosure of listed companies. The
securities regulatory body, stock exchange, recommendation party or
securities company involving in underwriting as well as the
relevant personnel thereof shall, before an announcement is made by
a company according to the provisions of the relevant laws and
administrative regulations, divulge any content concerned before
the announcement.
Article 72 Where a stock exchange decides to suspend or
terminate the listing of any securities, it shall announce the
decision in a timely manner and report it to the securities
regulatory authority under the State Council for archival
purpose.
Section IV Prohibited Trading Acts
Article 73 Any insider who has access to any insider information
of securities trading or who has unlawfully obtained any insider
information is prohibited from taking advantage of the insider
information as held thereby to engage in any securities
trading.
Article 74 The insiders who have access to insider information
of securities trading include:
(1) Directors, supervisors, and senior managers of an
issuer;
(2) Shareholders who hold no less than 5% of the shares in a
company as well as the directors, supervisors, and senior managers
thereof, or the actual controller of a company as well as the
directors, supervisors, and senior managers thereof;
(3) The holding company of an issuer as well as the directors,
supervisors, and senior managers thereof;
(4) The personnel who may take advantage of their posts in their
company to obtain any insider information of the company concerning
the issuance and transaction of its securities;
(5) The functionary of the securities regulatory body, and other
personnel who administer the issuance and transaction of securities
pursuant to their statutory functions and duties;
(6) The relevant personnel of recommendation institutions,
securities companies engaging in underwriting, stock exchanges,
securities registration and clearing institutions and securities
trading service organizations; and
(7) Any other person as prescribed by the securities regulatory
authority under the State Council.
Article 75 For the purpose of the present Law, the term "insider
information" refers to the information that concerns the business
or finance of a company or may have a major effect on the market
price of the securities thereof and that hasn't been publicized in
securities trading. The following information all falls into the
scope of insider information:
(1) The major events as prescribed in paragraph 2 of Article 62
of the present Law;
(2) The plan of a company concerning any distribution of
dividends or increase of capital;
(3) Any major change in the company's equity structure;
(4) Any major change in guaranty of the company's
obligation;
(5) Where the mortgaged, sold or discarded value of a major
asset as involved in the business operation of the company exceeds
30 % of the said asset in a one-off manner;
(6) Where any act as conducted by any director, supervisor or
senior manager of the company may be rendered liabilities of major
damage and compensation;
(7) The relevant plan of a listed company regarding acquisition;
and
(8) Any other important information that has been recognized by
the securities regulatory authority under the State Council as
having a marked effect on the trading prices of securities.
Article 76 Any insider who has access to insider information or
has unlawfully obtained any insider information on securities
trading may not purchase or sell the securities of the relevant
company, or divulge such information, or advise any other person to
purchase or sell such securities. Where there is any other
provision of the present Law on governing the purchase of shares of
a listed company by a natural person, legal person or any other
organization who holds or holds with any other person not less than
5% of the company's shares by means of an agreement or any other
arrangement, it shall prevail. Where any insider trading incurs any
loss to investors, the actor shall be subject to the liabilities of
compensation according to law.
Article 77 Anyone is prohibited from manipulating the securities
market by any of the following means:
(1) Whether anyone, independently or in collusion with others,
manipulates the trading price of securities or trading quantity of
securities by centralizing the advantage in respect of funds,
shareholding advantage or utilizing information advantage to trade
jointly or continuously;
(2) Where anyone collaborates with any other person to trade
securities pursuant to the time, price and method as agreed upon in
advance, thereby affecting the price or quantity of the securities
traded;
(3) Where anyone trades securities between the accounts under
self-control, thereby affecting the price or quantity of the
securities traded; or
(4) Where anyone manipulates the securities market by any other
means. Where anyone incurs any loss to investors by manipulating
the securities market, the actor shall be subject to the
liabilities of compensation according to law.
Article 78 It is prohibited for state functionaries,
practitioners of the news media as well as other relevant personnel
concerned to fabricate or disseminate any false information,
thereby seriously disturbing the securities market. It is
prohibited for stock exchanges, securities companies, securities
registration and clearing institutions, securities trading service
institutions and the practitioners thereof, as well as the
securities industry association, the securities regulatory body and
their functionaries to make any false statement or give any
misleading information in the activities of securities trading. The
securities market information as disseminated by any media shall be
authentic and objective. Any dissemination of misleading
information is prohibited.
Article 79 It is prohibited for securities companies as well as
their practitioners to commit any of the following fraudulent acts
in the process of securities trading, which may injure the
interests of their clients:
(1) Violating the entrustment of its client by purchasing or
selling any securities on the behalf;
(2) Failing to provide a client with written confirmation of a
transaction within the prescribed period of time;
(3) Misappropriating the securities as entrusted by a client for
purchase or sale, or the funds in a client's account;
(4) Unlawfully purchasing or selling securities for its client
without any authorization, or unlawfully purchasing or selling any
securities in the name of a client;
(5) Inveigling a client into making any unnecessary purchase or
sale of securities in order to obtain commissions;
(6) Making use of mass media or by any other means to provide or
disseminate any false or misleading information to investors;
or
(7) Having any other act that goes against the true intention as
expressed by a client and damages the interests thereof. Where
anyone practices any trickery and thus incurs any loss to the
relevant clients, the actor shall be subject to the liabilities of
compensation according to law.
Article 80 It's prohibited for any legal person to unlawfully
make use of any other person's account to undertake any securities
trading. It's prohibited for any legal person to lend its or any
other's securities account.
Article 81 The channel for capital to go into the stock market
shall be broadened according to law. It's prohibited for any
unqualified capital to go into the stock market.
Article 82 It's prohibited for any person to misappropriate any
public fund to trade securities.
Article 83 The state-owned enterprises and state-holding
enterprises that engage in any transaction of listed stocks shall
observe the relevant provisions of the state.
Article 84 When stock exchanges, securities companies,
securities registration and clearing institutions, securities
trading service organizations as well as their functionaries
discover any prohibited activities in securities trading, they
shall report such activities to the securities regulation body in
time.
Section V Acquisition of Listed Companies
Article 85 An investor may purchase a listed company by means of
tender offer or agreement as well as by any other legal means.
Article 86 Where an investor, through securities trading at a
stock exchange, comes to hold or holds with any other person 5 % of
the shares as issued by a listed company by means of agreement or
any other arrangement, the investor shall, within three days as of
the date when such shareholding becomes a fact, submit a written
report to the securities regulatory authority under the State
Council and the stock exchange, notify the relevant listed company
and announce the fact to the general public. Within the aforesaid
prescribed period, the investor may not purchase or sell any more
shares of the listed company. In case an investor holds or holds
with any other person 5 % of the shares as issued by a listed
company by means of agreement or any other arrangement, he shall,
pursuant to the provisions of the preceding paragraph herein, make
report and announcement of each 5% increase or decrease in the
proportion of the issued shares of the said company he holds
through securities trading at a stock exchange. Within the
reporting period as well as two days after the relevant report and
announcement are made, the investor may not purchase or sell any
more shares of the listed company.
Article 87 The written report and announcement as made according
to the provisions of the preceding Article herein shall include the
following contents:
(1) The name and domicile of the shareholder;
(2) The description and amount of the shares as held; and
(3) The date on which the shareholding or any increase or
decrease in the shareholding reaches the statutory percentage.
Article 88 Where an investor holds or holds with any other
person 30% of the stocks as issued by a listed company by means of
agreement or any other arrangement through securities trading at a
stock exchange and if the purchase is continued, he shall issue a
tender offer to all the shareholders of the said listed company to
purchase all of or part of the shares of the listed company. It
shall be stipulated in a tender offer as issued to a listed company
that, where the share amount as promised to be sold by the
shareholders of the target company exceeds the scheduled amount of
stocks for purchase, the purchaser shall carry out the acquisition
according to the relevant percentage.
Article 89 Before any tender offer is issued pursuant to the
provisions in the preceding Article herein, the relevant purchaser
shall submit a report on the acquisition of a listed company to the
securities regulatory authority under the State Council beforehand,
which shall indicate the following items:
(1) The name and domicile of the purchaser;
(2) The decision of the purchaser on acquisition;
(3) The name of the target listed company;
(4) The purpose of acquisition;
(5) The detailed description of the shares to be purchased and
the amount of shares to be purchased in schedule;
(6) The term and price of the acquisition;
(7) The amount and warranty of the funds as required by the
acquisition; and
(8) The proportion of the amount of shares of the target company
as held by the purchaser in the total amount of shares of the
target company as issued, when the report on the acquisition of the
listed company is reported. A purchaser shall concurrently submit
to the stock exchange a report on the acquisition of the relevant
company.
Article 90 A purchaser shall, after 15 days as of the day when
the report on the acquisition of a listed company is submitted
pursuant to the preceding Article herein, announce its tender
offer. Within the aforesaid term, where the securities regulatory
authority under the State Council finds that any report in the
acquisition of a listed company fails to satisfy the provisions of
the relevant laws and administrative regulations, it shall notify
the relevant purchaser in a timely manner. The relevant purchaser
may not announce its tender offer. The term for acquisition as
stipulated in a tender offer shall be not less than 30 days but not
more than 60 days.
Article 91 Within the acceptance term as prescribed in a tender
offer, no purchaser may revoke its tender offer. Where a purchaser
requests for altering its tender offer, it shall submit a report to
the securities regulatory authority under the State Council and the
stock exchange in advance and announce the alteration upon the
approval thereby.
Article 92 All the terms of acquisition as stipulated in a
tender offer shall apply to all the shareholders of a target
company.
Article 93 In the event of an acquisition by tender offer, a
purchaser shall, within the term for acquisition, not sell any
share of the target company, nor shall it buy any share of the
target company by any other means that hasn't been stipulated by
provisions of its tender offer or that oversteps the terms as
stipulated in its tender offer.
Article 94 In the event of an acquisition by agreement, a
purchaser may carry out share transfer with the shareholders of the
target company by means of agreement according to the provisions of
the relevant laws and administrative regulations. In the case of an
acquisition of a listed company by agreement, a purchaser shall,
within three days after the acquisition agreement is reached,
submit a written report on the acquisition agreement to the
securities regulatory authority under the State Council and the
stock exchange as well as announce it to the general public. No
acquisition agreement may be performed before the relevant
announcement.
Article 95 In the event of an acquisition by agreement, both
parties to the agreement may temporarily entrust a securities
registration and clearing institution to keep the stocks as
transferred and deposit the relevant funds in a designated
bank.
Article 96 In the event of an acquisition by agreement, where a
purchaser has purchased, held or held with any other person 30% of
the shares as issued by a listed company through agreement or any
other arrangement and if the acquisition is continued, the
purchaser shall issue an offer to all of the shareholders of the
target listed company for purchasing all of or part of the
company's shares, unless a tender offer is been exempted from being
issued by the securities regulatory authority under the State
Council. A purchaser that purchases the shares of a listed company
by means of tender offer according to the provisions of the
preceding paragraph herein shall abide by the provisions of
Articles 89~93 of the present Law.
Article 97 Upon the expiration of a term for acquisition, where
the share distribution of an target company fails to fulfill the
requirements of listing, the listing of stocks of the said listed
company shall be terminated by the stock exchange according to law.
The shareholders that still hold the shares of the target company
have the right to sell their shares pursuant to the equal terms as
stipulated in the relevant tender offer. The purchaser shall make
the purchase. When an acquisition is concluded, if a target company
fails to meet the requirements of being a stock-limited company any
more, its form of enterprise shall be altered according to law.
Article 98 In an acquisition of a listed company, the stocks of
the target company as held by a purchaser may not be transferred
within 12 months after the acquisition is concluded.
Article 99 When an acquisition is concluded, if the purchaser
merges with the target company by dissolving the target company,
the original shares of the company as dissolved shall be changed by
the purchaser according to law.
Article 100 Where an acquisition is concluded, a purchaser
shall, within 15 days, report the acquisition to the securities
regulatory authority under the State Council and the stock exchange
as well as announce it.
Article 101 The purchase of the shares of a listed company as
held by an organization that has been authorized by the state for
investment shall be subject to the approval of the relevant
administrative departments according to the provisions of the State
Council. The securities regulatory authority under the State
Council shall formulate the specific measures for acquisition of
listed companies in light of the principles of the present Law.
Chapter V Stock Exchanges
Article 102 For the purpose of the present Law, the term "stock
exchange" refers to a legal person that provides the relevant place
and facilities for concentrated securities trading, organizes and
supervises the securities trading and applies a self-regulating
administration. The establishment and dissolution of a stock
exchange shall be subject to the decision of the State Council.
Article 103 A constitution shall be formulated for the
establishment of a stock exchange. The formulation and revision of
the constitution of a stock exchange shall be subject to the
approval of the securities regulatory authority under the State
Council.
Article 104 The words "stock exchange" shall be indicated in the
name of a stock exchange. No other entity or individual may use the
name of "stock exchange" or an identical name.
Article 105 The income that is at the discretion of a stock
exchange, as generated from various commissions, shall first be
used to guarantee the normal operation of the place and facilities
of the stock exchange as well as the gradual improvement thereof.
The gains as accumulated by a stock exchange that adopts a
membership system shall belong to its members. The rights and
interests of a stock exchange shall be jointly shared by its
members. No accumulated gains of a stock exchange may be
distributed to any member within the holding term.
Article 106 A stock exchange shall have a council.
Article 107 There shall be a general manager in a stock
exchange, who shall be subject to the appointment and dismissal of
the securities regulatory authority under the State Council.
Article 108 Anyone, under the circumstance as prescribed in
Article 147 of the Corporation Law of the People's Republic of
China or under any of the following circumstances, may not assume
the post of person-in-charge of a stock exchange:
(1) Where a person-in-charge of a stock exchange or securities
registration and clearing institution or any director, supervisor
or senior manager of a securities company who has been removed from
his post for his irregularity or disciplinary breach and if it has
been within 5 years as of the day when he is removed from his post;
or
(2) Where a professional of a law firm, accounting firm or
investment consulting organization, financial advising
organization, credit rating institution, asset appraisal
institution or asset verification institution who has been
disqualified for his irregularity or disciplinary breach and if it'
has been within 5 years as of the day when he is removed from his
post.
Article 109 A practitioner of a stock exchange, securities
registration and clearing institution, securities trading service
organization or securities company or any functionary of the state
organ, who has been dismissed for his irregularity or disciplinary
breach, may not be employed as a practitioner of a stock
exchange.
Article 110 Only a member of a stock exchange may enter into a
stock exchange to engage in the centralized trading of
securities.
Article 111 An investor shall conclude an entrustment agreement
with a securities company on securities trading, open an account of
securities trading in a securities company and entrust the
securities company to purchase or sell securities on the behalf in
writing, by telephone or any other means.
Article 112 A securities company shall, based on the entrustment
of its investors, declare orders and engage in the centralized
trading at a stock exchange according to the rules of securities
trading and shall, based on trading results, bear the relevant
liabilities of settlement and delivery. A securities registration
and clearing institution shall, on the basis of trading results and
according to the rules of settlement and delivery, conduct
settlement and delivery of securities and capital with the relevant
securities company and handle the formalities of transfer
registration of securities for clients of the relevant securities
company.
Article 113 A stock exchange shall guarantee a fair centralized
trading, announce up-to-the-minute quotations of securities
trading, formulate the quotation tables of the securities market on
the basis of trading days as well as announce it. Without
permission of a stock exchange, no entity or individual may
announce any up-to-the-minute quotations of securities trading.
Article 114 Where any normal trading of securities is disturbed
by an emergency, a stock exchange may take the measures of a
technical suspension of trading. In the event of an emergency of
force majeure or with a view to preserving the normal order of
securities trading, a stock exchange may decide a temporary speed
bump. Where a stock exchange adopts the measure of a technical
suspension of trading or decides a temporary speed bump, it shall
report it to the securities regulatory authority under the State
Council in a timely manner.
Article 115 A stock exchange shall exercise a real-time
monitoring of securities trading and shall, according to the
requirements of the securities regulatory authority under the State
Council, report any abnormal trading thereto. A stock exchange
shall carry out supervision over the information as disclosed by a
listed company or the relevant obligor of information disclosure,
supervise and urge it/him to disclose information in a timely and
accurate manner according to law. A stock exchange may, when it
requires so, restrict the trading through a securities account
where there is any major abnormal trading and shall report it to
the securities regulatory authority under the State Council for
archival filing.
Article 116 A stock exchange shall withdraw a certain proportion
of funds from the transaction fees, membership fees and seat fees
as charged thereby to establish a risk fund. The risk fund shall be
subject to the administration of the council of the stock exchange.
The specific withdrawal proportion and use of risk fund shall be
provided for by the securities regulatory authority under the State
Council in collaboration with the fiscal department of the State
Council.
Article 117 A stock exchange shall deposit its risk fund into a
special account of its opening bank and may not unlawfully misuse
it.
Article 118 A stock exchange shall, pursuant to laws and
administrative regulations of securities, formulate the rules on
listing, trading and membership administration as well as any other
relevant rules, and shall report them to the securities regulatory
authority under the State Council for approval.
Article 119 Any person-in-charge and any other practitioner of a
stock exchange that has any interest relationship or any of his
relatives has any interest relationship with the performance of his
duties relating to securities trading shall withdraw.
Article 120 Any trading result of a transaction, which has been
conducted in accordance with the trading rules as formulated
according to law, may not be altered. A trader who has conducted
any rule-breaking trading may not be exempted from civil
liabilities. The proceeds as generated from any rule-breaking
trading shall be dealt with pursuant to the relevant
regulations.
Article 121 Where any staff of a stock exchange who is engaged
in securities trading violates any trading rule of the stock
exchange, the stock exchange shall impose him disciplinary
sanctions. Under any serious circumstances, the qualification
thereof shall be revoked and the violator shall be prohibited from
entering into the stock exchange to engage in any securities
trading.
Chapter VI Securities Companies
Article 122 The establishment of a securities company shall be
subject to the examination and approval of the securities
regulatory under the State Council. No entity or individual may
engage in any securities business without the approval of the
securities regulatory under the State Council.
Article 123 For the purpose of the present Law, the term
"securities company" as mentioned in the present Law refers to a
limited- liability company or stock-limited company that has been
established and engages in business operation of securities
according to the Corporation Law of the People's Republic of China
as well as the provisions of the present Law.
Article 124 The establishment of a securities company shall
fulfill the following requirements:
(1) Having a corporation constitution that meets the relevant
laws and administrative regulations;
(2) The major shareholders having the ability to make profits
successively, enjoying good credit standing and having no irregular
or rule-breaking record over the latest 3 years, and its net asset
being no less than 0.2 billion yuan.
(3) Having a registered capital that meets the provisions of the
present Law;
(4) The directors, supervisors and senior managers thereof
having the post-holding qualification and its practitioners having
the qualification to engage in securities business;
(5) Having a complete risk management system as well as an
internal control system;
(6) Having a qualified business place and facilities for
operation; and
(7) Meeting any other requirement as prescribed by laws and
administrative regulations as well as the provisions of the
securities regulatory authority under the State Council, which have
been approved by the State Council.
Article 125 A securities company may undertake some of or all
the following business operations upon the approval of the
securities regulatory authority under the State Council:
(1) Securities brokerage;
(2) Securities Investment consulting;
(3) Financial advising relating to activities of securities
trading or securities investment;
(4) Underwriting and recommendation of securities;
(5) Self-operation of securities;
(6) Securities asset management; and
(7) Any other business operation concerning securities.
Article 126 A securities company shall indicate the words
"limited-liability securities company" or "stock-limited securities
company" in its name.
Article 127 Where a securities company engages in the business
operation as prescribed in item (1), (2) or (3) of Article 125 of
the present Law, its registered capital shall be RMB 50 million
yuan at the least. Where a securities company engages in any of the
business operations as prescribed in item (4), (5), (6) or (7), its
registered capital shall be RMB 100 million yuan at the least;
Where a securities company engages in two or more business
operations as prescribed in item (4), (5), (6) or (7), its
registered capital shall be 500 million yuan at the least. The
registered capital of a securities company shall be the paid-in
capital. The securities regulatory authority under the State
Council may, according to the principals of prudent supervision and
in light of the risk rating of all business operations, adjust the
requirement of minimum amount of registered capital, which shall be
no less than the minimum amount as prescribed in the preceding
paragraph herein.
Article 128 The securities regulatory authority under the State
Council shall, within 6 months as of accepting an application for
establishing a securities company, carry out an examination
according to the statutory requirements and procedures and on the
basis of the principle of prudent supervision, make a decision on
approval or disapproval and thereafter, notify the relevant
applicant. In the case of disapproval, an explanation shall be
given. Where an application for establishing a securities company
has been approved, an applicant shall, within the prescribed
period, apply for registration of establishment with the organ in
charge of corporation registration and collect its business license
therefrom. A securities company shall, within 15 days as of
collecting its business license, file an application for the
Securities Business Permit with the securities regulatory authority
under the State Council. Without a Securities Business Permit, a
securities company may not engage in any business operation of
securities.
Article 129 Where a securities company establishes, purchases or
cancels a branch, alters its business scope or registered capital,
alters its shareholders or actual controllers who hold more than 5%
of its stock rights, alters any important article of its
constitution, has any merger or spilt-up, alters its form of
corporation, suspends its business, goes through dissolution or
bankruptcy, it shall be subject to the approval of the securities
regulatory authority under the State Council. Where a securities
company establishes, purchases a securities operation institution
abroad or purchases the shares of any securities operational
institution abroad, it shall be subject to the approval of the
securities regulatory authority under the State Council.
Article 130 The securities regulatory authority under the State
Council shall formulate provisions on the risk control indicators
of a securities company such as net capital, the ratio between net
capital and liabilities, the ratio between net capital and net
assets, the ratio between net capital and operational scale of
self-operation, underwriting and asset management, the ratio
between liabilities and net asset as well as the ratio between
current assets and current liabilities. A securities company may
not provide any financing or guaranty for its shareholders or any
related person thereof.
Article 131 The directors, supervisors and senior managers of a
securities company shall be honest and integrate, have good moral
grade, be familiar with the laws and administrative regulations on
securities and have the ability of operation and management as
required by the performance of their functions and duties, and
shall have obtained the post-holding qualification as verified by
the securities regulatory authority under the State Council before
assuming his post. Anyone who is under any circumstance as
prescribed in Article 147 of the Corporation Law of the People's
Republic of China or is under any of the following circumstances
may not hold the post of director, supervisor or senior manager of
a securities company:
(1) Where a person-in-charge of a stock exchange or securities
registration and clearing institution or a director, supervisor or
senior manager of a securities company has been removed from his
post for his irregularity or disciplinary breach and if it has been
within 5 years as of the day when he is removed from his post;
and
(2) Where a professional of a law firm, accounting firm or
investment consulting organization, financial advising
organization, credit rating institution, asset appraisal
institution or asset verification institution has been disqualified
for his irregularity or disciplinary breach and if it has been
within 5 years as of the day when he is removed from his post.
Article 132 A practitioner of a stock exchange, securities
registration and clearing institution, securities trading service
institution or securities company or any functionary of the state
organ, who has been dismissed for his irregularity or disciplinary
breach, may not be employed as a practitioner of a stock
exchange.
Article 133 A functionary of the state organ and any other
personnel as prohibited by laws and administrative regulations from
taking any job in a company on a part-time basis may not take any
job in a securities company on a part-time basis.
Article 134 The state shall establish the securities investor
protection fund. The securities investor protection fund shall be
composed of the capital as paid by securities companies and any
other capital as lawfully raised. The specific measures for
financing, administration and use of the foregoing fund shall be
formulated by the State Council.
Article 135 A securities company shall withdraw a trading risk
reserve from its annual after-tax profits to cover any loss from
securities transaction. The specific proportion for withdrawal
shall be prescribed by the securities regulatory authority under
the State Council.
Article 136 A securities company shall establish and improve an
internal control system, adopt an effective measures of separation
so as to prevent any interest conflict between the company and its
clients or between different clients thereof. A securities company
shall undertake its operations of securities brokerage,
underwriting, self-operation and asset management in a separate
manner but not in a mixed manner.
Article 137 A securities company shall undertake its
self-operation in its own name and may not make use of any other
person's name or in an individual's name. A securities company
shall undertake its self-operation by using its own capital and
funds as lawfully raised. A securities company may not lend its
self-operation account to any other person.
Article 138 A securities company may enjoy its right of
independent management according to law and its legal operation may
not be interfered.
Article 139 The trading settlement funds of the clients of a
securities company shall be deposited in a commercial bank and be
managed through accounts as separately opened in the name of each
client. The specific measures and implementation procedures shall
be formulated by the State Council. A securities company may not
incorporate any trading settlement funds or securities of its
clients into its own assets. Any entity or individual is prohibited
from misusing any trading settlement funds or securities of its/his
clients in any form. Where a securities company goes bankruptcy or
goes through liquidation. The trading settlement funds or
securities of its client may not be defined as its insolvent assets
or liquidation assets. Under any other circumstance as irrelevant
to the liabilities of its clients or under any other circumstance
as prescribed by law, the trading settlement funds or securities of
its clients may not be sealed-up, frozen, deducted or enforced
compulsorily.
Article 140 Where a securities company engages in any brokerage
business, it shall arrange a uniformly formulated the power of
attorney of securities transactions for the entrusting party. Where
any other means of entrustment is adopted, the relevant entrustment
records shall be made. For an entrustment of securities transaction
as made by a client, whether the transaction is concluded or not,
the entrustment records shall be kept in the relevant securities
company within the prescribed period.
Article 141 Upon accepting an entrustment of securities
transaction, a securities company shall, on the basis of the
description of the securities, trading volume, method of bidding,
price band, etc. as indicated in the power of attorney, undertake
securities trading as an agent according to the trading rules and
make trading records in a faithful manner. After a transaction is
concluded, a securities company shall, according to the relevant
regulations, formulate a transaction report and deliver it to the
relevant clients. The statements in a check sheet that confirms
trading acts and results in securities trading shall be authentic.
Such statements shall be subject to the examination of an examiner,
other than the relevant transaction handler, on a
transaction-by-transaction basis, so as to guarantee the
consistency between the balance of securities in book account and
the securities as actually held.
Article 142 Where a securities company provides any service of
securities financing through securities transactions for its
client, it shall meet the provisions of the State Council and shall
be subject to the approval of the securities regulatory authority
under the State Council.
Article 143 A securities company that engages in brokerage
operation may not decide any purchase or sale of securities, class
selection of securities, trading volume or trading price on the
basis of full entrustment of its client.
Article 144 A securities company may not make a promise to its
clients on the proceeds as generated from securities transactions
or on compensating the loss as incurred from securities
transactions by any means.
Article 145 A securities company and the practitioners thereof
may not privately accept any entrustment of its client for
securities transaction beyond its business place as established
according to law.
Article 146 Where any practitioner of a securities company
violates the trading rules by implementing the instructions of his
securities company or taking advantage of his post in any
securities trading, the relevant securities company shall bear all
the liabilities as incurred therefrom.
Article 147 A securities company shall keep the materials of its
clients regarding account opening, entrustment records, trading
records and internal management as well as business operation in a
proper manner. No one may conceal, forge, alter or damage the
aforesaid materials. The term for keeping the aforesaid materials
shall be no less than 20 years.
Article 148 A securities company shall, according to the
relevant provisions, report the information and materials regarding
operation and management such as its business operation and
financial status to the securities regulatory authority under the
State Council. The securities regulatory authority under the State
Council has the right to require a securities company as well as
the shareholders and actual controllers thereof to provide the
relevant information and materials within a prescribed period. The
information and materials as reported or provided by a securities
company and the shareholders and actual controllers thereof to the
securities regulatory authority under the State Council shall be
authentic, accurate and complete.
Article 149 The securities regulatory authority under the State
Council may, when believing it requires so, entrust an accounting
firm or an asset appraisal institution to carry out an auditing or
appraisal on the financial status, internal control as well as
asset value of a securities company. The specific measures thereof
shall be formulated by the securities regulatory authority under
the State Council in collaboration with the relevant administrative
departments.
Article 150 Where the net capital or any other indicator of risk
control of a securities company fails to satisfy the relevant
provisions, the securities regulatory authority under the State
Council shall order it to correct in a prescribed period. Where a
securities company fails to correct within the prescribed period or
any act thereof has injured the sound operation of the securities
company or has damaged the legitimate rights and interests of its
clients, the securities regulatory authority under the State
Council may take the following measures in light of different
circumstances:
(1) Restricting its business operation, ordering it to suspend
some business operations and stopping the approval of any new
operation thereof;
(2) Stopping the approval for establishing or taking over any
business branch;
(3) Restricting its distribution of dividends, restricting the
payment of remunerations to or provision of welfare for its
directors, supervisors or senior managers;
(4) Restricting any transfer of property or the setting of any
other right to its property;
(5) Ordering it to alter its directors, supervisors and senior
managers or restricting the right thereof;
(6) Ordering the controlling shareholders to transfer their
stock right or restricting its shareholders from exercising the
shareholders' rights; and
(7) Revoking the relevant business license. A securities company
shall, upon rectification, submit a report to the securities
regulatory authority under the State Council. The securities
regulatory authority under the State Council shall lift the
relevant measures as prescribed in the preceding paragraph herein
within 3 days as of concluding the relevant examination and
acceptance of a securities company that has met the requirements of
risk control indicators upon examination and acceptance.
Article 151 Where a shareholder of a securities company makes
any fake capital contribution or spirits away registered capital,
the securities regulatory authority under the State Council shall
order him to correct within the prescribed period and may order him
to transfer the stock rights of the securities company as held
thereby. Before a shareholder as prescribed in the preceding
paragraph herein corrects his irregularity and transfers the stock
right of the securities company as held thereby according to the
relevant requirements, the securities regulatory authority under
the State Council may restrict the shareholders' rights
thereof.
Article 152 Where any director, supervisor or senior manager of
a securities company fails to fulfill his accountability in a
diligent manner and thus incurs any major irregularity or
rule-breaking act or major risk to his securities company, the
securities regulatory authority under the State Council may revoke
the post-holding qualification thereof and order his company to
remove him from his post for alteration.
Article 153 Where any illegal operation of a securities company
or any major risk thereof seriously disturbs the order of the
securities market or injures the interests of the relevant
investors, the securities regulatory authority under the State
Council may take such supervisory measures as suspending its
business for rectification, designating any other institution for
trusteeship, take-over or cancellation.
Article 154 During a period when a securities company is ordered
to suspend its business for rectification, or is designated for
trusteeship, or is being taken over or liquidated, or where any
major risk occurs, the following measures may be adopted to any
director, supervisor, senior manager or any other person of the
securities company directly responsible upon the approval of the
securities regulatory authority under the State Council:
(1) Notifying the export administrative organ to prevent him
from exiting the Chinese territory; and
(2) Requesting the judicial organ to prohibit him from moving,
transferring his properties or disposing his properties by any
other means, or setting any other right to his properties.
Chapter VII Securities Registration and Clearing
Institutions
Article 155 A securities registration and clearing institution
is a non-profit legal person that provides centralized
registration, custody and settlement services for securities
transactions. The establishment of a securities registration and
clearing institution shall be subject to the approval of the
securities regulatory authority under the State Council.
Article 156 The establishment of a securities registration and
clearing institution shall fulfill the following requirements:
(1) Its self-owned capital shall be no less than 0.2 billion
yuan;
(2) It shall have a place and facilities as required by the
services of securities registration, custody and settlement;
(3) Its major managers and practitioners shall have the
securities practice qualification; and
(4) It shall meet any other requirement as prescribed by the
securities regulatory authority under the State Council. The words
"securities registration and clearing" shall be indicated in the
name of a securities registration and clearing institution.
Article 157 A securities registration and clearing institution
shall perform the following functions:
(1) The establishment of securities accounts and settlement
accounts;
(2) The custody and transfer of securities;
(3) The registration of roster of securities holders;
(4) The settlement and delivery for listed securities trading of
a stock exchange;
(5) The distribution of securities rights and interests on the
basis of the entrustment of issuers;
(6) The handling of any inquiry relating to the aforesaid
business operation; and
(7) Any other business operation as approved by the securities
regulatory authority under the State Council.
Article 158 A national centralized and unified operation shall
be adopted for the registration and settlement of securities. The
constitution and operational rules of a securities registration and
clearing institution shall be formulated according to law and shall
be subject to the approval of the securities regulatory authority
under the State Council.
Article 159 The securities as held by the relevant holders shall
be all put under the custody of a securities registration and
clearing institution in a listed trading. A securities registration
and clearing institution may not misuse any securities of its
clients.
Article 160 A securities registration and clearing institution
shall provide the roster of securities holders as well as the
relevant materials to a securities issuer. A securities
registration and clearing institution shall, according to the
result of securities registration and settlement, affirm the fact
that a securities holder holds the relevant securities and provide
the relevant registration materials to a securities holder. A
securities registration and clearing institution shall guarantee
the authenticity, accuracy and integrity of the roster of
securities holders as well as records of transfer registration and
may not conceal, forge, alter or damage any of the aforesaid
materials.
Article 161 A securities registration and clearing institution
shall take the following measures to guarantee a sound operation of
its business:
(1) Having the necessary service equipment and complete data
protection measures;
(2) Having established complete management systems concerning
operation, finance and security protection; and
(3) Having established a complete risk management system.
Article 162 A securities registration and clearing institution
shall keep the original voucher of registration, custody and
settlement as well as the relevant documents and materials in a
proper manner. The term for keeping the aforesaid materials shall
be no less than 20 years.
Article 163 A securities registration and clearing institution
shall establish a clearing risk fund so as to pay in advance or
make up any loss of the securities registration and clearing
institution as incurred from default delivery, technical
malfunction, operational fault or force majeure. The securities
clearing risk fund shall be withdrawn from the business incomes and
proceeds of a securities registration and clearing institution and
may be paid by clearing participants according to a specified
percentage of securities trading volume. The measures for raising
and managing the securities clearing risk fund shall be formulated
by the securities regulatory authority under the State Council in
collaboration with the fiscal department of the State Council.
Article 164 The securities clearing risk fund shall be deposited
into a special account of a designated bank and shall be subject to
special management. Where a securities registration and clearing
institution makes any compensation by using the securities clearing
risk fund, it may recourse the payment to the relevant person as
held responsible.
Article 165 An application for dissolving a securities
registration and clearing institution shall be subject to the
approval of the securities regulatory authority under the State
Council.
Article 166 An investor who entrusts a securities company to
undertake any securities trading shall apply for opening a
securities account. A securities registration and clearing
institution shall, according to the relevant provisions, open a
securities account for an investor in his own name. An investor who
applies for opening an account shall hold the legitimate
certificates certifying his identity of a Chinese citizen or its
qualification of a Chinese legal person, unless it is otherwise
provided for by the state.
Article 167 A securities registration and clearing institution
shall, when providing the netting service for a stock exchange,
require the relevant clearing participant to deliver securities and
funds in full amount and provide the guaranty of delivery according
to the principles of delivery versus payment (DVP). Before a
delivery is concluded, nobody may use the securities, funds or
collaterals as involved in the delivery. Where a clearing
participant fails to perform the duty of delivery according to the
schedule, a securities registration and clearing institution has
the right to dispose the properties as prescribed in the preceding
paragraph herein according to the operational rules.
Article 168 The clearing funds and securities as collected by a
securities registration and clearing institution according to the
operational rules shall be deposited into a special account for
settlement and delivery. The settlement and delivery that can only
be applied to the securities trading as concluded according to the
operational rules may not be enforced compulsorily.
Chapter VIII Securities Trading Service
Institutions
Article 169 Where an investment consulting institution,
financial advising institution, credit rating institution, asset
appraisal institution or accounting firm engages in any securities
trading service, it shall be subject to the approval of the
securities regulatory authority under the State Council and the
relevant administrative departments. The measures for the
administration of examination and approval of the practice of
securities trading services, in which an investment consulting
institution, financial advising institution, credit rating
institution, asset appraisal institution or accounting firm
engages, shall be formulated by the securities regulatory authority
under the State Council and the relevant administrative
departments.
Article 170 The staff of an investment consulting institution,
financial advising institution or credit rating institution who
engage in securities trading service shall have the special
knowledge of securities as well as work experience on securities
business or securities trading service for more than 2 years. The
standards for recognizing the securities practice qualification and
the measures for administration thereof shall be formulated by the
securities regulatory authority under the State Council.
Article 171 An investment consulting institution as well as its
practitioners that engage in securities trading services may not
have any of the following acts:
(1) Engaging in any securities investment as an agent on the
behalf of its entrusting party;
(2) Concluding any agreement with an entrusting party on sharing
the gains of securities investment or bearing the loss of
securities investment;
(3) Purchasing or selling any stock of a listed company, for
which the consulting institution provides services;
(4) Providing or disseminating any false or misleading
information to investors through media or by any other means;
or
(5) Having any other act as prohibited by any law or
administrative regulation. Any institution or person that has any
of the acts as prescribed in the preceding paragraph herein and
thus incurs any loss to investors shall be subject to the
liabilities of compensation.
Article 172 An investment consulting institution or credit
rating institution that engages in securities trading services
shall, according to the standards of or measures for charging as
formulated by the relevant administrative department of the State
Council, charge the relevant service commissions.
Article 173 Where a securities trading service institution
formulates and generates any auditing report, asset appraisal
report, financial advising report, credit rating report or legal
opinions for the issuance, listing and trading of securities, it
shall be diligent and responsible by carrying out examination and
verification for the authenticity, accuracy and integrity of the
contents of the documents as formulated and generated. In the case
of any false record, misleading statement or major omission in the
documents as formulated and generated, which incurs any loss to any
other person, the relevant securities trading service institution
shall bear the joint and several liabilities together with the
relevant issuer and listed company, unless a securities trading
service institution has the ability to prove its exemption of
fault.
Chapter IX Securities Industry Association
Article 174 The securities industry association is a
self-regulating organization for the securities industry and is a
public organization with the status of a legal person. A securities
company shall join the securities industrial association. The power
organ of the securities industrial association is the general
assembly of its members.
Article 175 The constitution of the securities industrial
association shall be formulated by the general assembly of its
members and shall be report to the securities regulatory authority
under the State Council for archival purpose.
Article 176 The securities industrial association shall perform
the following functions and duties:
(1) Educating and organizing its members to observe the laws and
administrative regulations on securities;
(2) Safeguarding the legitimate rights and interests of its
members and reporting the suggestions and requirements of its
members to the securities regulatory body;
(3) Collecting and straightening out the securities information
and providing services for its members;
(4) Formulating the rules that shall be observed by its members,
organizing the vocational training for the practitioners of its
member entities and carrying out vocational exchange between its
members;
(5) Holding mediation over any dispute regarding securities
operation between its members or between its members and
clients;
(6) Organizing its members to make research on the development,
operation and the relevant contents of the securities industry;
(7) Supervising and examining the acts of its members and,
according to the relevant provisions, giving a disciplinary
sanction to any member that violates any law or administrative
regulation or the constitution of the association; and
(8) Performing any other function and duty as stipulated by the
constitution of the industrial association.
Article 177 A council shall be established within the securities
industrial association. The members of the council shall be
selected through election according to the provisions of the
constitution．
Chapter X Securities Regulatory Bodies
Article 178 The securities regulatory authority under the State
Council shall carry out supervision and administration of the
securities market according to law so as to preserve the order of
the securities market and guarantee the legitimate operation
thereof.
Article 179 The securities regulatory authority under the State
Council shall perform the following functions and duties regarding
the supervision and administration of the securities market:
(1) Formulating the relevant rules and regulations on the
supervision and administration of the securities market and
exercising the power of examination or verification according to
law;
(2) Carrying out the supervision and administration of the
issuance, listing, trading, registration, custody and settlement of
securities according to law;
(3) Carrying out the supervision and administration of the
securities activities of a securities issuer, listed company, stock
exchange, securities company, securities registration and clearing
institution, securities investment fund management company or
securities trading service institution according to law;
(4) Formulating the standards for securities practice
qualification and code of conduct and carrying out supervision and
implementation according to law;
(5) Carrying out the supervision and examination of information
disclosure regarding the issuance, listing and trading of
securities;
(6) Offering guidance for and carrying out supervision of the
activities of the securities industrial association according to
law;
(7) Investigating into and punishing any violation of any law or
administrative regulation on the supervision and administration of
the securities market according to law; and
(8) Performing any other functions and duties as prescribed by
any law or administrative regulation. The securities regulatory
authority under the State council may establish a cooperative
mechanism of supervision and administration in collaboration with
the securities regulatory bodies of any other country or region and
apply a trans-border supervision and administration.
Article 180 Where the securities regulatory authority under the
State Council performs its duties and functions, it has the right
to take the following measures:
(1) Carrying an on-the-spot examination of a securities issuer,
listing company, securities company, securities investment fund
management company, securities trading service company, stock
exchange or securities registration and clearing institution;
(2) Making investigation and collecting evidence in a place
where any suspected irregularity has happened;
(3) Consulting the parties concerned or any entity or individual
relating to a case under investigation and requiring the relevant
entity or person to give explanations on the matters relating to a
case under investigation;
(4) Referring to and photocopying such materials as the
registration of property right and the communication records
relating to the case under investigation;
(5) Referring to and photocopying the securities trading
records, transfer registration records, financial statements as
well as any other relevant documents and materials of any entity or
individual relating to a case under investigation; sealing up any
document or material that may be transferred, concealed or
damaged;
(6) Consulting the capital account, security account or bank
account of any relevant party concerned in or any entity or
individual relating to a case under investigation; in the case of
any evidence certifying that any property as involved in a case
such as illegal proceeds or securities has been or may be
transferred or concealed or where any important evidence has been
or may be concealed, forged or damaged, freezing or sealing up the
foregoing properties or evidence upon the approval of the principal
of the securities regulatory authority under the State Council;
(7) When investigating into any major securities irregularity
such as manipulation of the securities market or insider trading,
upon the approval of the principal of the securities regulatory
authority under the State Council, restricting the securities
transactions of the parties concerned in a case under
investigation, whereby the restriction term may not exceed 15
trading days; under any complicated circumstance, the restriction
term may be extended for another 15 trading day.
Article 181 Where the securities regulatory authority under the
State Council performs its functions and duties of supervision or
examination or investigation, the personnel in charge of
supervision and examination or investigators shall be no less than
2 and shall show their legitimate certificates and the notice of
supervision and examination as well as investigation. Where the
personnel in charge of supervision and examination or investigation
are less than 2 or fail to show their legitimate certificates and
the notice of supervision and examination or investigation, an
entity under examination and investigation has the right to
refuse.
Article 182 The functionary of the securities regulatory
authority under the State Council shall be duteous, impartial and
clean, and handle matters according to law, and may not take
advantage of his post to seek any unjust interests or divulge any
commercial secrete of the relevant entity or individual as
accessible in his performance.
Article 183 Where the securities regulatory authority under the
State Council performs its functions and duties according to law,
the entity or individual under examination and investigation shall
coordinate with it, provide the relevant documents and materials in
a faithful manner and may not refuse any legitimate requirement,
obstruct the performance of duties and functions or conceal any
document or material concerned.
Article 184 The regulations, rules as well as the working system
of supervision and administration as formulated by the securities
regulatory authority under the State Council according to law shall
be publicized to the general public. The securities regulatory
authority under the State Council shall, according to the results
of investigation, decide the punishment on any securities
irregularity, which shall be publicized to the general public.
Article 185 The securities regulatory authority under the State
Council shall establish an information pooling mechanism of
supervision and administration in collaboration with any other
financial regulatory authority under the State Council. Where the
securities regulatory authority under the State Council performs
its functions and duties of supervision and examination or
investigation according to law, the relevant departments shall
coordinate with it.
Article 186 Where the securities regulatory authority under the
State Council founds any securities irregularity as involved in a
suspected crime when performing its functions and duties according
to law, it shall transfer the case to the judicial organ for
handling.
Article 187 The functionary of the securities regulatory
authority under the State Council may not hold any post in an
organization under its supervision.
Chapter XI Legal Liabilities
Article 188 Where any company unlawfully makes any public
issuance of securities or does so in any disguised form without any
examination and approval of the statutory organ, it shall be
ordered to cease the issuance, return the funds as raised plus the
deposit interests as calculated at the interest rate of the bank at
the corresponding period of time and be imposed a fine of 1% up to
5% of the funds as illegally raised. A company that has been
established through any unlawful public issuance of securities or
through any unlawful public issuance of securities in a disguised
form shall be revoked by the organ or department that performs the
functions and duties of supervision and administration in
collaboration with the local people's government at or above the
county level. The person-in-charge or any other person directly
responsible shall be given a warning and imposed a fine of 30, 000
yuan up to 300, 000 yuan.
Article 189 Where an issuer fails to meet the requirements of
issuance and cheats for the verification for issuance by any
fraudulent means, if the relevant securities haven't been issued, a
fine of 300, 000 yuan up to 600, 000 yuan shall be imposed; if the
relevant securities have been issued, a fine of 1% up to 5% of the
illegal proceeds as unlawfully raised shall be imposed. The
person-in-charge and any other person directly responsible shall be
imposed a fine of 30, 000 yuan up to 300, 000 yuan. Any controlling
shareholder or actual controller of an issuer that instigates any
irregularity as prescribed in the preceding paragraph herein shall
be subject to the punishments as prescribed in the preceding
paragraph.
Article 190 Where a securities company underwrites or, as an
agent, purchases or sells any securities, which have been
unlawfully issued in a public manner without any examination and
approval, it shall be ordered to stop its underwriting operation or
purchase or sale on an agency basis. The illegal proceeds shall be
confiscated and a fine of 1~5 times of its illegal proceeds shall
be imposed. Where there is no illegal proceeds or its illegal
proceeds is less than 300, 000 yuan, a fine of 300, 000 yuan up to
60, 000 yuan shall be imposed. Where any loss has been incurred to
an investor, the securities company shall bear the joint and
several liabilities of compensation together with the issuer. The
person-in-charge and any other person directly responsible shall be
given a warning and imposed a fine of 30, 000 yuan up to 300, 000
yuan and the post-holding qualification or securities practice
qualification thereof shall be revoked.
Article 191 Where a securities company that engages in
securities underwriting is under any of the following
circumstances, it shall be ordered to correct and given a warning.
The illegal proceeds shall be confiscated and a fine of 30, 000
yuan up to 600, 000 yuan may be imposed concurrently. Under any
serious circumstances, the relevant business licenses shall be
suspended or revoked. Where any loss has been incurred to any other
securities underwriting institution or investor, it shall be
subject to the liabilities of compensation according to law. The
person-in-charge and any other person directly responsible shall be
given a warning and may be concurrently imposed a fine of 30, 000
yuan up to 300, 000 yuan. Under any serious circumstances, the
post-holding qualification or securities practice qualification
thereof shall be revoked:
(1) Conducting any advertising or any other publicity for
recommendation, which is false or may mislead investors;
(2) Canvassing any underwriting business by any means of unjust
competition; or
(3) Having any other irregularity in violation of the relevant
provisions on securities underwriting.
Article 192 Where a recommendation party produces a
recommendation letter with any false record, misleading statement
or major omission, or fails to perform any other statutory
functions and duties, it shall be ordered to correct and given a
warning. Its business income shall be confiscated and a fine of 1~5
times of its business income shall be imposed. Under any serious
circumstances, the relevant business license shall be suspended or
revoked. The person-in-charge and any other person directly
responsible shall be given a warning and imposed a fine of 30, 000
yuan up to 300, 000 yuan. Under any serious circumstances, the
post-holding qualification or securities practice qualification
thereof shall be revoked.
Article 193 Where an issuer, a listed company or any other
obligor of information disclosure fails to disclose information
according to the relevant provisions or where there is any false
record, misleading or major omission in the information as
disclosed, the securities regulatory body shall order it to
correct, give a warning and impose it a fine of 300, 000 yuan up to
600, 000 yuan. The person-in-charge and any other person directly
responsible shall be given a warning and imposed a fine of 30,000
yuan up to 300, 000 yuan. Where an issuer, a listed company or any
other obligor of information disclosure fails to submit the
relevant reports or where there is any false record, misleading or
major omission in any report as submitted, the securities
regulatory body shall order it to correct, give a warning and
impose it a fine of 300, 000 yuan up to 600, 000 yuan. The
person-in-charge and any other person-in-charge directly
responsible shall be given a warning and imposed a fine of 30,000
yuan up to 300, 000 yuan. Any controlling shareholder or actual
controller of an issuer, a listed company or any other obligor of
information disclosure instigates any irregularity as prescribed in
the preceding 2 paragraphs herein shall be subject to the
punishments as prescribed in the preceding 2 paragraphs.
Article 194 Where an issuer or a listed company unlawfully
alters the use of funds as raised through public issuance of
securities, it shall be ordered to correct. The person-in-charge
and any other person directly responsible shall be given a warning
and imposed a fine of 30,000 yuan up to 300, 000 yuan. Any
controlling shareholder or actual controller of an issuer or a
listed company who instigates any irregularity as prescribed in the
preceding paragraph herein shall be given a warning and imposed a
fine of 300, 000 yuan up to 600, 000 yuan. The person-in-charge and
any other person directly responsible shall be subject to the
punishment according to the provisions of the preceding
paragraph.
Article 195 Where a director, supervisor, senior manager of a
listed company or a shareholder who holds more than 5% of the
shares of a listed company violates the provisions of Article 47 of
the present Law by buying or purchasing any stock of the listed
company, he shall be given a warning and be concurrently imposed a
fine of 30,000 yuan up to 100, 000 yuan.
Article 196 Any stock exchange as illegally established shall be
banned by the people's government above the county level. Its
illegal proceeds shall be confiscated and a fine of 1~5 times of
its illegal proceeds shall be imposed. Where there is no illegal
proceeds or the illegal proceeds is less than 100, 000 yuan, a fine
of 100, 000 yuan up to 500, 000 yuan shall be imposed, The
person-in-charge and an other directly responsible shall be given a
warning and imposed a fine of 30,000 yuan up to 300, 000 yuan.
Article 197 Any securities company that is unlawfully
established or that unlawfully undertakes any securities operation
without an approval shall be banned by the securities regulatory
body, the illegal proceeds shall be confiscated and a fine of 1~5
times of the illegal proceeds shall be imposed. Where there is no
illegal proceeds or the illegal proceeds is less than 300, 000
yuan, a fine of 300, 000 yuan up to 600, 000 yuan shall be imposed,
The person-in-charge and any other person directly responsible
shall be given a warning and imposed a fine of 30,000 yuan up to
300, 000 yuan.
Article 198 Where any personnel without a post-holding
qualification or securities practice qualification is unlawfully
employed in violation of the provisions of the present Law, the
securities regulatory body shall order it to correct, give a
warning and impose it a fine of 100, 000 yuan up to 300, 000 yuan.
The person-in-charge and any other person directly responsible
shall be given a warning and imposed a fine of 30,000 yuan up to
300, 000 yuan.
Article 199 Where any person who is prohibited by laws and
administrative regulations from engaging in securities trading
holds or purchases or sells any stock directly or in an assumed
name or in a name of any other person, he shall be ordered to
dispose the stocks as unlawfully held thereby according to law. The
illegal proceeds shall be confiscated and a fine of no more than
the equivalent value of stocks as traded shall be imposed. In the
case of any functionary of the state, an administrative sanction
shall be given according to law.
Article 200 Where any practitioner of a stock exchange,
securities company, securities registration and clearing
institution or any functionary of the securities industrial
association provides any false material or conceals, forges, alters
or damages any trading record for the purpose of inducing investors
to purchase or sell securities, the securities practice
qualification thereof shall be revoked and a fine of 30, 000 yuan
up to 100, 000 yuan shall be imposed. In the case of any
functionary of the state, an administrative sanction shall be given
according to law.
Article 201 Where a securities trading service institution and
its staffs that produce any auditing report, asset appraisal report
or legal opinions for the issuance of stocks violate the provisions
of Article 45 of the present Law by purchasing or selling any
stock, it shall be ordered to dispose the stocks as illegally held
thereby according to law. The illegal proceeds shall be confiscated
and a fine of no more than the equivalent value of the stocks as
traded shall be imposed.
Article 202 Where an insider who has access to insider
information of securities trading or any person who has obtained
any insider information purchases or sells the securities, divulges
the relevant information or advises any other person to purchase or
sell the securities before the information regarding the issuance
or trading of securities or any other information that may have any
big impact on the price of the securities is publicized, he shall
be ordered to dispose the securities as illegally held thereby
according to law. The illegal proceeds shall be confiscated and a
fine of 1~5 times of the illegal proceeds shall be imposed. Where
there is no illegal proceeds or the illegal proceeds is less than
30, 000 yuan, a fine of 30, 000 yuan up to 600, 000 yuan shall be
imposed. Where an entity is involved in any insider trading, the
person-in-charge and any other person directly responsible shall be
given a warning and imposed a fine of 30,000 yuan up to 300, 000
yuan. Any functionary of the securities regulatory body that
conducts any insider trading shall be given a heavier
punishment.
Article 203 Where anyone violates the present Law by
manipulating the securities market, he shall be ordered to dispose
the securities as illegally held thereby according to law. The
illegal proceeds shall be confiscated and a fine of a fine of 1~5
times of the illegal proceeds shall be imposed. Where there is no
illegal proceeds or the illegal proceeds is less than 30, 000 yuan,
a fine of 30, 000 yuan up to 300, 000 yuan shall be imposed. Where
an entity manipulates the securities market, the person-in-charge
and any other person directly responsible shall be given a warning
and imposed a fine of 100,000 yuan up to 600, 000 yuan as well.
Article 204 Where anyone violates the relevant laws by
purchasing or selling any securities during a period when any
transfer of securities is prohibited, he shall be ordered to
correct, given a warning and imposed a fine of no more than the
equivalent value of the securities as illegally traded shall be
imposed. The person-in-charge and any other person directly
responsible shall be given a warning and imposed a fine of 30,000
yuan up to 300, 000 yuan.
Article 205 Where a securities company violates the present Law
by providing any securities financing, the illegal proceeds shall
be confiscated, the relevant business license shall be suspended or
revoked, and a fine of no more than the equivalent value of the
funds as raised through securities financing shall be imposed. The
person-in-charge and any other person directly responsible shall be
given a warning and imposed a fine of 30,000 yuan up to 300, 000
yuan and the relevant post-holding qualification or securities
practice qualification shall be revoked.
Article 206 Where anyone violates the provisions of paragraph 1
or 3 of Article 78 of the present Law by disturbing the securities
market, the securities regulatory body shall order it to correct.
The illegal proceeds shall be revoked and a fine of 1~5 times of
the illegal proceeds shall be imposed. Where there is no illegal
proceeds or the illegal proceeds is less than 30, 000 yuan, a fine
of 30, 000 yuan up to 200, 000 yuan shall be imposed.
Article 207 Where anyone violates the provisions of paragraph 2
of Article 78 by making any false statement or giving any
misleading information in the activities of securities trading, the
securities regulatory body shall order it to correct and a fine of
not less than 30,000 yuan up to 200,000 yuan shall be imposed; in
the case of any state functionary, an administrative sanction shall
be given according to law.
Article 208 Where any legal person violates the present Law by
opening any account in any other person's name or making use of any
other person's account to purchase or sell any securities, it shall
be ordered to correct and be imposed a fine of 1~5 times of the
illegal proceeds. Where there is no illegal proceeds or the illegal
proceeds is less than 30, 000 yuan, a fine of 30, 000 yuan up to
300, 000 yuan shall be imposed. The person-in-charge and any other
person directly responsible shall be given a warning and imposed a
fine of 30,000 yuan up to 100, 000 yuan. Where a securities company
provides any securities trading account of its own or of any other
person for any irregularity as prescribed in the preceding
paragraph herein, not only the punishments as prescribed in the
preceding paragraph shall be given accordingly, but also the
post-holding qualification or securities practice qualification of
the person-in-charge or any other person directly responsible shall
be revoked.
Article 209 Where a securities company violates the present Law
by engaging in the self-operation of securities by making use of
any other's name or an individual's name, it shall be ordered to
correct. The illegal proceeds shall be confiscated and a fine of
1~5 times of the illegal proceeds shall be imposed. Where there is
no illegal proceeds or the illegal proceeds is less than 30, 000
yuan, a fine of 30, 000 yuan up to 200, 000 yuan shall be imposed.
Under any serious circumstances, the business license of securities
self-operation shall be suspended or revoked. The person-in-charge
and any other person directly responsible shall be given a warning
and be imposed a fine of 30,000 yuan up to 100, 000 yuan and the
relevant post-holding qualification or securities practice
qualification shall be revoked.
Article 210 Where a securities company purchases or sells any
securities or handles any trading matter in violation of the
entrustment of its clients or handles any other non-trading matter
in violation of the true intension as expressed by its clients, it
shall be ordered to correct and imposed a fine of 10, 000 yuan up
to 100, 000 yuan. Where any loss has been incurred to its client,
it shall be subject to the liabilities of compensation according to
law.
Article 211 Where a securities company or securities
registration and clearing institution misuses any fund or
securities of its client, or unlawfully purchases or sells any
securities for its client without any entrustment thereby, it shall
be ordered to correct. The illegal proceeds shall be confiscated
and a fine of 1~5 times of the illegal proceeds shall be imposed.
Where there is no illegal proceeds or the illegal proceeds is less
than 100, 000 yuan, a fine of 100, 000 yuan up to 300, 000 yuan
shall be imposed. Under any serious circumstances, it shall be
ordered to close or the relevant business license thereof shall be
revoked. The person-in-charge and any other person directly
responsible shall be given a warning and imposed a fine of 30,000
yuan up to 100, 000 yuan and the relevant post-holding
qualification or securities practice qualification thereof shall be
revoked.
Article 212 Where a securities company undertakes any brokerage
business, accepts a full entrustment of its client to purchase or
sell any securities or makes any promise on the proceeds as
generated from securities trading or on the compensation of any
loss as incurred from securities trading, it shall be ordered to
correct. The illegal proceeds shall be confiscated and a fine of
50, 000 yuan up to 200, 000 yuan shall be imposed. The relevant
business license may be suspended or revoked. The person-in-charge
and any other person directly responsible shall be given a warning
and imposed a fine of 30,000 yuan up to 100, 000 yuan. The relevant
post-holding qualification or securities practice qualification
thereof may be revoked.
Article 213 Where a purchaser fails to perform its obligations
such as announcing the acquisition of a listed company, issuing a
tender offer or reporting the acquisition report of a listed
company or unlawfully alters its tender offer according to the
present Law, it shall be ordered to correct, given a warning and
imposed a fine of 100, 000 yuan up to 300, 000 yuan. Before any
correction, for the stocks that constitute more than 30% of shares
of the target company as held thereby or held within any other
person through an agreement or any other arrangement, the voting
right thereof may not be exercised. The person-in-charge and any
other person directly responsible shall be given a warning and
imposed a fine of 30,000 yuan up to 300, 000 yuan.
Article 214 Where a purchaser or any controlling shareholder of
a purchaser takes advantage of the acquisition of a listed company
to injure the legitimate rights and interests of the target company
as well as the shareholders thereof, it shall be ordered to correct
and given a warning. Under any serious circumstances, a fine of
100, 000 yuan up to 600, 000 yuan shall be imposed. Where any loss
is incurred to the target company or the shareholders thereof, it
shall be subject to the liabilities of compensation according to
law. The person-in-charge and any other person directly responsible
shall be given a warning and imposed a fine of 30,000 yuan up to
300, 000 yuan.
Article 215 Where a securities company or any of its
practitioners violates the present Law by privately accepting any
entrustment of purchasing or selling securities from a client, it
shall be ordered to correct and given a warning. The illegal
proceeds shall be confiscated and a fine of 1~5 times of the
illegal proceeds shall be imposed. Where there is no illegal
proceeds or the illegal proceeds is less than 100, 000 yuan, a fine
of 100, 000 yuan up to 300, 000 yuan shall be imposed.
Article 216 Where a securities company violates the relevant
provisions by undertaking any transaction of unlisted securities
without an approval, it shall be ordered to correct. The illegal
proceeds shall be confiscated and a fine of 1~5 times of the
illegal proceeds shall be imposed.
Article 217 Where a securities company fails to start its
business within 3 months after establishment without any
justifiable reason, or suspends its business for a consecutive 3
months, the organ in charge of corporation registration shall
revoke the business license of the company.
Article 218 Where a securities company violates the provisions
of Article 129 of the present Law by unlawfully establishing,
purchasing or revoking any branch, or unlawfully going through any
merge, split-up, business suspension, dissolution or bankruptcy, or
establishing, purchasing a securities operation institution abroad
or purchasing the shares of a securities operation institution
abroad, it shall be ordered to correct. The illegal proceeds shall
be confiscated and a fine of 1~5 times of the illegal proceeds
shall be imposed. Where there is no illegal proceeds or the illegal
proceeds is less than 100, 000 yuan, a fine of 100, 000 yuan up to
600, 000 yuan shall be imposed. The person-in-charge and any other
person directly responsible shall be given a warning and imposed a
fine of 30,000 yuan up to 100, 000 yuan. Where a securities company
violates the provisions of Article 129 of the present Law by
altering the relevant items, it shall be ordered to correct and
imposed a fine of 100, 000 yuan up to 300, 000 yuan. The
person-in-charge and any other person directly responsible shall be
given a warning and imposed a fine of no more than 50, 000
yuan.
Article 219 Where a securities company violates the present Law
by engaging in any securities operation beyond its business scope
as permitted, it shall be ordered to correct. The illegal proceeds
shall be confiscated and a fine of 1~5 times of the illegal
proceeds shall be imposed. Where there is no illegal proceeds or
the illegal proceeds is less than 300, 000 yuan, a fine of 300, 000
yuan up to 600, 000 yuan shall be imposed. Under any serious
circumstances, it shall be ordered to close down. The
person-in-charge and any other person directly responsible shall be
given a warning and imposed a fine of 30,000 yuan up to 100, 000
yuan and the relevant post-holding qualification or securities
practice qualification shall be revoked.
Article 220 Where a securities company fails to carry out its
securities operation of brokerage, underwriting, self-operation or
asset management in a separate manner according to law but carries
out its securities operation in a mixed operation, it shall be
ordered to correct. The illegal proceeds shall be confiscated and a
fine of 300, 000 yuan up to 600, 000 yuan shall be imposed. Under
any serious circumstances, the relevant business license shall be
revoked. The person-in-charge and any other person directly
responsible shall be given a warning and imposed a fine of 30,000
yuan up to 100, 000 yuan. Under any serious circumstances, the
relevant post-holding qualification or securities practice
qualification shall be revoked.
Article 221 Where a securities company submits any false
document of certification or adopts any other fraudulent means to
conceal any major fact so as to cheat for the securities business
license or a securities company has any severe irregularity in the
securities trading and thus, fails to meet the requirements of
business operation any more, the securities regulatory body shall
revoke its securities business license.
Article 222 Where a securities company or its shareholder or
actual controller violates the relevant provisions by refusing to
report or provide information or materials regarding its business
and management to the securities regulatory body or in the case of
any false record, misleading statement or major omission in the
aforesaid information or materials as reported or submitted, it
shall be ordered to correct, given a warning and imposed a fine of
30, 000 yuan up to 300, 000 yuan. The relevant business license of
the securities company may be suspended or revoked. The
person-in-charge and any other person directly responsible shall be
given a warning and imposed a fine of no more than 30,000 yuan and
the relevant post-holding qualification or securities practice
qualification shall be revoked. Where a securities company provides
financing or guaranty for its shareholder or any person related to
its shareholder, it shall be ordered to correct, given a warning
and imposed a fine of 100, 000 yuan up to 300, 000. The
person-in-charge and any other person directly responsible shall be
imposed a fine of 30, 000 yuan up to 100, 000 yuan. Where a
shareholder has any fault, the securities regulatory authority
under the State Council may restrict his shareholders' right before
he makes correction according to the relevant requirements. Where
anyone refuses to correct, he may be ordered to transfer the stock
right of the securities company as held thereby.
Article 223 Where a securities trading service institution fails
to fulfill its accountability in a diligent manner so that any
document as formulated or produced thereby has any false record,
misleading statement or major omission, it shall be ordered to
correct. The proceeds as generated from its business shall be
confiscated. Its securities business license shall be suspended or
revoked. A fine of 1~5 times of its business income shall be
imposed. The person-in-charge and any other person directly
responsible shall be given a warning and imposed a fine of 30,000
yuan up to 100, 000 yuan and the relevant post-holding
qualification or securities practice qualification shall be
revoked.
Article 224 Where anyone violates the present Law by issuing or
underwriting any corporate bond, he shall be given a punishment by
the department as authorized by the State Council in accordance
with the relevant provisions of the present Law.
Article 225 Where a listed company, securities company, stock
exchange, securities registration and clearing institution, or
securities trading service institution fails to keep the relevant
documents and materials according to the relevant provisions, it
shall be ordered to correct, given a warning and imposed a fine of
30, 000 yuan up to 300, 000 yuan. Where any relevant document or
material is concealed, forged, altered or damaged, the violator
shall be given a warning and imposed a fine of 300, 000 yuan up to
600, 000 yuan.
Article 226 Where a securities registration and clearing
institution is unlawfully established without any approval of the
State Council, it shall be cancelled by the securities regulatory
body, the illegal proceeds shall be confiscated and a fine of 1~5
times of the illegal proceeds shall be imposed. Where an investment
consulting institution, financial advising institution, credit
rating institution, asset appraisal institution or accounting firm
undertakes any securities trading service without the relevant
approval, it shall be ordered to correct. The illegal proceeds
shall be confiscated and a fine of 1~5 times of the illegal
proceeds shall be imposed. In case a securities registration and
clearing institution or a securities service trading institution
violates the present Law or any operational rules as formulated
according to law, the securities regulatory body shall order it to
correct and confiscate the illegal proceeds and impose it a fine of
1~5 times of the illegal proceeds. Where there is no illegal
proceeds or the illegal proceeds is less than 100, 000 yuan, a fine
of 100, 000 yuan up to 300, 000 yuan shall be imposed. Under any
serious circumstances, it shall be ordered to close down or its
securities business license shall be revoked.
Article 227 Where the securities regulatory authority under the
State Council or the department as authorized by the State Council
is in any of the following circumstances, the person-in-charge and
any other person directly responsible shall be given an
administrative sanction according to law:
(1) Verifying or approving an application for issuing securities
or for establishing a securities company, which fails to comply
with the present Law;
(2) Violating the provisions of Article 180 of the present Law
by taking such measures as on-the-spot examination, investigation
and evidence collection, consultation, freeze-up or seal-up;
(3) Violating the relevant provisions by giving any
administrative sanction to the relevant institution or personnel;
or
(4) Performing any other functions and duties in an unlawful
manner.
Article 228 Where any functionary of the securities regulatory
body or any member of the issuance examination committee fails to
perform the duties and functions as prescribed in the present Law,
misuses his power, neglects his duty, takes advantage of his post
to seek any unjust interests or divulges any commercial secrete of
the relevant entity or individual as accessible in his performance,
he shall be subject to legal liabilities.
Article 229 A stock exchange that grants any approval to an
application for securities listing that fail to meet the
requirements as prescribed in the present Law shall be given a
warning. Its business income shall be confiscated and a fine of 1~5
times of its business income shall be imposed. The person-in-charge
and any other person directly responsible shall be imposed a fine
of 30, 000 yuan up to 300, 000 yuan.
Article 230 Anyone that refuses or obstructs the performance of
the securities regulatory body as well as its functionary on the
functions and duties of supervision, examination and investigation
by no means of violence or threat shall be given an administrative
sanction of public security according to law.
Article 231 Where anyone violates the present Law and
constitutes a crime, he shall be subject to criminal liabilities
according to law.
Article 232 Where anyone violates the present Law and shall be
subject to civil liabilities of compensation and payment of fines
and penalties and if his properties are not sufficient to cover all
the payment at the same time, he shall be first subject to civil
liabilities.
Article 233 In case anyone violates the relevant laws and
administrative regulations or the relevant provisions of the
securities regulatory authority under the State Council and is
under any serious circumstances, the securities regulatory
authority under the State Council may take measures of prohibiting
the relevant responsible persons from entering into the securities
market. For the purpose of the present Law, the term of
"prohibition from entering into the securities market" as mentioned
in the preceding paragraph refers to a system, whereby a person may
not undertake any securities practice or hold any post of director,
supervisor or senior manager of a listed company within a
prescribed term or for life.
Article 234 The fines as collected and the illegal proceeds as
confiscated shall be all turned over into the State Treasury.
Article 235 Where any party concerned is dissatisfied with a
decision of the securities regulatory body or a department as
authorized by the State Council on punishment, it may file an
application for an administrative review or file an litigation with
the people's court.
Chapter XII Supplementary Articles
Article 236 The securities that have been approved for listed
trading in a stock exchange according to the relevant
administrative regulations before the present Law comes into force
may continue to be traded according to law. The securities
operation institution that has been approved for establishment in
accordance with the relevant administrative regulations and the
provisions of the administrative department of finance of the State
Council before the present Law comes into force but fails to comply
with the provisions of the present Law in a complete manner shall
satisfy the requirements as prescribed by the present Law within
the prescribed term. The specific measures for implementation shall
be separately prescribed by the State Council.
Article 237 Where an issuer applies for verifying the public
issuance of any stocks or corporate bonds, it shall pay the
expenses for examination according to the relevant provisions.
Article 238 Any domestic enterprise that directly or indirectly
issues any securities abroad or lists its securities abroad for
trading shall be subject to the approval of the securities
regulatory authority under the State Council according to the
relevant provisions of the State Council.
Article 239 As for any subscription or trading of stocks of a
domestic company in a foreign currency, the specific measures
thereof shall be formulated by the State Council separately.
Article 240 The present Law shall be implemented as of January
1, 2006.?
Source: Ministry of Commerce