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| Category | SECURITIES | Organ of Promulgation | The State Council | Status of Effect | In Force |
| Date of Promulgation | 1993-04-22 | Effective Date | 1993-04-22 |
|
Provisional Regulations on the Administration of Share Issuance and Trading |
|---|
Article 1 These Regulations have been formulated in order to suit the
needs of the development of the socialist market economy, to establish and
develop a uniform and efficient national share market, to protect the lawful
interests of investors and the public interest of the society at large and to
promote the development of the national economy.
Article 2 All issuance or trading of shares and related activities within
the territory of the People's Republic of China must abide by these
Regulations.
The provisions of these Regulations concerning shares shall apply to
securities that have the nature or function of shares.
Article 3 The issuance and trading of shares shall comply with the
principles of openness, fairness, and credit-worthiness.
Article 4 Shares shall be issued and traded so as to preserve the leading
position of socialist public ownership and so as not to endanger state-owned
assets.
Article 5 The State Council Securities Commission (hereinafter referred
to as "SCSC") shall be the agency in charge of the national securities market
and shall be responsible for the unified administration of securities markets
throughout China in accordance with the provisions of laws and regulations.
The China Securities Supervisory and Regulatory Commission (hereinafter
referred to as "CSSRC") shall be the supervising and administering agency of
the SCSC and supervise specific activities relating to the issuance and
trading of securities in accordance with the provisions of laws and
regulations.
Article 6 Specific measures with respect to the issuance and trading of
special Renminbi denominated shares shall be formulated separately.
A domestic enterprise must obtain approval from the SCSC before it Article 7 Only companies limited by shares qualified to issue shares may Companies limited by shares referred to in the preceding paragraph include Article 8 To establish a company limited by shares and to apply for the 1. Its production and operations are in compliance with the industrial 2. Only one class of common shares are to be issued, with equal rights 3. Shares subscribed for by promoters shall not represent less than 35% of 4. Of the total amount of capital that the company intends to issue, the 5. The shares to be offered to the public shall represent not less than 6. The promoters have not engaged in serious illegal activities in the 7. Other conditions that the SCSC may impose. Article 9 If an existing enterprise that is to be restructured as a 1. At the end of the year preceding the issuance, net assets shall account 2. It shall have shown a profit in each of the most recent three If an existing state-owned enterprise is to be restructured as a company Article 10 A company limited by shares that applies to issue shares to the 1. The proceeds raised from any immediately preceding public issuance of 2. Not less than twelve months shall have elapsed since the preceding 3. There shall have been no serious illegal activities during the period 4. Other conditions that the SCSC may impose. Article 11 A company that has raised capital by private placement that 1. The funds raised by private placement shall have been used in 2. Not less than twelve months shall have elapsed since the preceding 3. There shall have been no serious illegal activities during the period 4. Stock purchase warrants for staff and employees shall have been 5. Other conditions that the SCSC may impose. Article 12 An application to issue shares to the public shall be made in 1. The applicant shall retain professionals such as an accounting firm, an 2. Within the scope of permitted share issuances designated by the state, 3. The approved issuance application shall be submitted to the CSSRC for Article 13 Applicants seeking to issue shares to the public shall submit 1. an application report; 2. resolutions of the promoters' or shareholders' general meeting 3. approval documentation with respect to the establishment of the company 4. the business license of the company limited by shares or a registration 5. the articles of association or the draft articles of association of the 6. the share prospectus; 7. a feasibility study concerning the use of proceeds; in the case of the 8. audited financial statements for the most recent three years or the 9. a written legal opinion signed by more than two lawyers and sealed by 10. an asset valuation report signed by more than two professional 11. the proposed share distribution and the distribution agreement; 12. other documents that the Local Governments or the departments in Article 14 When the approved share issuance application is submitted to 1. the document of the Local Government or the department in charge of 2. other documents that the CSSRC may require. Article 15 The prospectus referred to in Article 13 hereof shall be 1. the name and domicile of the company; 2. a brief description of the promoter(s) and issuer; 3. the purpose of the funds subscription; 4. the company's current total capital, the classes and total value of the 5. information regarding share subscriptions by the promoters of the 6. the name of the distributing institutions, the method of distribution 7. the proposed purchasers of the share issuance, the time and place of 8. the plan for the use of proceeds and the prediction of profitability 9. a near-term development plan of the company, and a projection of the 10. major contracts; 11. major litigations involving the company; 12. a list of the names and brief biographies of each of the board 13. a description of production and operations for the most recent three 14. audited financial statements of the company for the most recent three 15. with respect to any company seeking to increase its capital, 16. other matters that the CSSRC requires to be addressed. Article 16 The cover of the share prospectus shall set forth the Article 17 All the promoters or directors and the principal distributors Article 18 In performing their duties, the certified accountants and Article 19 Before a public share issuance has been approved, no person The issuer shall provide all subscribers with a prospectus. Institutions The prospectus shall be effective for a period of six months, commencing Article 20 Shares being offered to the public shall be distributed by The issuer and the securities dealing institution shall execute a 1. the names and domiciles of the parties and the names of their legal 2. the method of distribution; 3. the types, volume, value and issue price of the shares to be 4. the distribution period and the commencement and termination dates; 5. the time and method of payment for the distribution; 6. calculation of the distribution expenses, and the method and time of 7. liability for breach of contracts; 8. other matters that need to be agreed upon. The principles pursuant to which a securities dealing institution Article 21 In distributing the shares, a securities dealing institution Article 22 Public share issuances, the total par value of which exceeds A distribution syndicate shall be made up of two or more distributing Article 23 If the total par value of the shares to be offered to the "Other localities" referred to in the preceding paragraph means places Article 24 The distribution period shall not be less than ten days and During the distribution period, the distributing institution must make Upon the expiration of the distribution period, the then unsold shares Article 25 In issuing share subscription or applications to the public, a If the number of shares subscribed for exceeds the total number of shares Other than the distributing institutions or their authorized organs, no Article 26 Within fifteen business days after the expiration of the share Article 27 If, after the distribution period expires, the securities Article 28 The provisions of this Chapter shall not apply if an issuer Article 29 The trading of shares must be conducted at securities Article 30 A company limited by shares that applies to have its shares 1. Its shares shall have been already offered to the public; 2. Its total amount of capital after the issuance shall be not less than 3. Not less than 1,000 shareholders hold individually shares the par value 4. The company has a record of profitability over the most recent three 5. Other conditions that the SCSC may impose. Article 31 A company limited by shares which intends to apply to have its Article 32 A company limited by shares that applies for its shares to be 1. the application document; 2. the registration document of the company; 3. the document approving the public issuance of shares; 4. the company's financial statements for the three most recent years or 5. recommendation letter(s) from members of the securities exchange; 6. the most recent prospectus; and 7. other documents that the securities exchange may require. Article 33 After the shares are approved for trading on a securities Article 34 In addition to the major items of the prospectus provided for 1. the date when approval is granted for the shares to be traded at the 2. information on the share issue, the share rights structure and the 3. the resolution of the company's inaugural meeting or a shareholder's 4. brief biographies of the directors, supervisors and senior managers and 5. documents showing the operating results and financial status of the 6. other matters that the securities exchange may require to be specified. Article 35 In performing their duties, the certified accountants and Article 36 The transfer of state-owned shares shall be subject to The transfer of state-owned shares may not jeopardize the rights and Article 37 The securities exchanges and institutions administering the Article 38 Any profits made by any company limited by shares' director, The preceding paragraph shall apply to the directors, supervisors and Article 39 No person engaged in the securities industry, securities Article 40 Professionals that issue documents such as audit reports, Professionals that issue documents such as audit reports, asset valuation Article 41 A company limited by shares may not redeem its outstanding Artcle 42 Without the approval of the SCSC, no person may trade share Article 43 No financial institution may provide credit for the trading of Article 44 Securities dealing institution may not lend the shares of Article 45 Any securities dealing institution that has been granted Article 46 No individual may own more than 0.5% of the outstanding common Special Renminbi denominated shares issued by the company and shares Article 47 When any legal person directly or indirectly holds 5% of the When a legal person's ownership of the outstanding common shares of a Such legal person may not directly or indirectly make further purchase or Article 48 When any legal person other than a promoter directly or 1. the highest price paid by the acquisition offeror for such shares in 2. the average market price of such shares for the thirty business days Holders referred to in the preceding paragraph are prohibited from making Article 49 Before it makes the acquisition offer, the acquisition offeror The acquisition offer shall remain valid for not less than thirty business Article 50 All conditions of the acquisition offer shall apply to all Article 51 The acquisition shall fail if, at the expiration of the If, at the expiration of an acquisition offer, the acquisition offeror If the acquisition offeror offers to purchase less than the total number If, at the expiration of the acquisition offer, the acquisition offeror Article 52 If, after the acquisition offer has been given, there is any During the offer period and for thirty business days after the expiration Offerees that have accepted a compulsory offer shall have withdrawal Article 53 All issued shares shall be registered shares. The issuer may Article 54 Without the written consent of the holder of the subject Article 55 The securities clearance institution shall, in accordance with The securities clearance institution shall accept new member in accordance Article 56 The institutions responsible for the safekeeping, clearance, Article 57 A listed company shall furnish the CSSRC and relevant 1. an interim report furnished within sixty days following the end of the 2. an annual report audited by a certified accountant, submitted within The interim report and annual report must comply with state accounting Article 58 The interim report referred to in Article 57 hereof shall 1. the company's financial report; 2. the company management's analysis of the financial situation and 3. major litigations relating to the company; 4. any change in the outstanding shares of the company; 5. important matters that the company has submitted to the voting 6. other matters that the CSSRC may require to be specified. Article 59 The annual report referred to in Article 57 hereof shall 1. basic information on the company; 2. basic information on the primary products or services of the company; 3. basic information on the company's industry; 4. basic information on the assets and property of the company, such as 5. information on the outstanding shares of the company, including the 6. the number of shareholders of the company; 7. basic information on the directors, supervisors and senior managers of 8. basic information regarding the corporate structure of the company and 9. an abstract of the company's financial information for the prior three 10. the company management's analysis of the financial situation and 11. any changes with respect to the outstanding bonds and/or debentures of 12. major litigations relating to the company; 13. a financial report of the company comparing the two most recent 14. other matters that the CSSRC may require to be specified. Article 60 If there occurs any major event that may have a substantial The "major events" referred to in the preceding paragraph shall include 1. The company enters into an important contract which may have 2. Major changes take place in the operational policies or projects of the 3. The company makes a major investment or purchases long-term assets for 4. The company incurs major debts; 5. The company defaults by failing to make payment when due on a major 6. The company suffers a major operational or non-operational loss; 7. The company's assets suffer major damage; 8. Important changes take place with respect to the company's production 9. Newly-promulgated laws, regulations, policies and rules, etc. may have 10. The chairman of the board of directors, or more than 30% of the 11. The number of common shares of any shareholder holding 5% or more of 12. Any major litigation relating to the company; and 13. The company commences liquidation or is placed in bankruptcy. Articl 61 If any information disseminated through any public media may Article 62 All directors, supervisors and senior management of a listed The persons referred to in the preceding paragraph shall have the Article 63 Information required to be promulgated shall be published by a When a listed company promulgates information in accordance with Article 64 The CSSRC shall promptly publicize the reports, announcements All information required to be disclosed by the CSSRC shall be public 1. protected trade secrets, the non-disclosure of which is permitted by 2. non-public information and documents that the CSSRC acquires in the 3. other information and documents the non-disclosure of which is Article 65 Any shareholder may authorize another person to exercise on Article 66 In addition to the submission to the CSSRC and the relevant Article 67 The provisions of Articles 57-65 hereof shall apply to Article 68 The CSSRC shall have the right, by itself or jointly with the Article 69 The CSSRC may inspect the business activities of securities Article 70 A company limited by shares that violates the provisions of 1. the issuance or the issuance in a disguised form of shares without 2. approval to issue shares or to trade on a securities exchange obtained 3. failure to issue shares in accordance with the prescribed method and 4. the redemption of outstanding shares without approval. The directors, supervisors and senior management of the company limited by Article 71 A securities dealing institution that violates the provisions 1. failure to sell the shares in accordance with the prescribed time, 2. failure to distribute the share subscription applications in accordance 3. lending clients' shares to other parties or pledging them as security; 4. collecting unreasonable commissions and other fees; 5. buying or selling shares for its own account in the name of its clients; 6. appropriating the deposits of clients; 7. sharing the profits or the losses from the trading of shares with 8. providing borrowed money for the trading of shares. The securities dealing institution's leading personnel responsible, and Article 72 If insiders and other personnel who obtain inside information If securities industry personnel, the regulatory personnel of the Article 73 If an accounting firm, an appraisal institution or a law firm Any certified accountants, professional appraisers or lawyers directly Article 74 Any unit or individual that violates the provisions of these 1. trading shares at place(s) other than a securities exchange which the 2. making false or seriously misleading statements or omissions of 3. manipulating stock market prices through conspiracy or pooling, or 4. acting in collaboration with other persons to make sham purchases and 5. disturbing the order of the stock market by selling or offering to sell 6. extorting or forcing the purchase or sale of shares or assisting other 7. trading options and futures of shares or of a share index without 8. failure to perform the reporting, publicizing and promulgation of the 9. forging, altering or destroying the business records, accounting 10. participating in other illegal issuances and trading of shares and A company limited by shares that commits any of the acts referred to in Article 75 The sanctions provided for under Articles 70, 71, 72 and 74 Article 76 Any listed company or securities exchange or other Article 77 Violations of the provisions of these Regulations that cause Article 78 Violations of these Regulations which constitute criminal acts Article 79 With respect to any dispute relating to the issuance or Article 80 A dispute between securities dealing institutions or between a Article 81 The following terms used in these Regulations shall have the 1. "Shares" means the transferable written certificates issued by a "Book entry shares" means the written register that the issuer has "Shares in the form of physical certificates" means written shares 2. "Outstanding common shares" shall mean the common share capital of the 3. "Public issue" or "issue to the public" shall mean the making of offer 4. "Distribute" or "distribution" shall mean the act whereby a securities 5. "Distributing institution" shall mean a securities dealing institution 6. "Underwrite" or "underwriting" shall mean the method of distribution 7. "Sale or sell on a best effort basis" shall mean the method of 8. "Promulgate" shall mean the act whereby the documents that should be 9. "Publicize" shall mean the act whereby the documents that should be 10. "Offer" shall mean the oral or written expression made to private 11. "Offer invitation" shall mean any expression that advises other 12. "Preliminary acceptance" shall mean the preliminary expression of 13. A "listed company" shall mean a company limited by shares the shares 14. "Insiders" shall mean any person that has access to or can acquire 15. "Inside information" shall mean important information which may have 16. A "securities exchange" shall mean a securities exchange or a 17. "Regulatory personnel of the securities industry" shall mean the 18. "Securities industry personnel" shall mean the staff of the Article 82 The regulations for the administration of securities dealing These regulations shall not apply to shares owned by the internal staff Article 83 The SCSC shall be responsible for the interpretation of these Article 84 These Regulations shall come into effect as of the date of
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directly or indirectly issue shares abroad or has its shares traded abroad.
Specific measures with respect thereto shall be formulated separately.
Chapter II Issuance of Shares
issue shares.
both already established companies limited by shares and companies limited by
shares that have obtained approval but yet to be established.
issue of shares to the public, the following conditions must be satisfied:
policies of the state;
attaching to the same shares;
the total capital that the company intends to issue;
promoters shall subscribe not less than Renminbi 30,000,000 yuan, except where
national regulations provide otherwise;
25% of the total amount of capital that the company intends to issue, and the
amount of capital that employees of the company subscribe for shall not exceed
10% of the total amount of capital to be offered to the public; where the
total amount of capital that the company intends to issue exceeds Renminbi
400,000,000 yuan, the CSSRC may, in accordance with relevant provisions and the
circumstances, reduce the proportion to be offered to the public, provided,
however, that the amount issued to the public shall not be less than 10% of
the total amount of capital that the company plans to issue;
prior three years;
company limited by shares applies to issue shares to the public, it shall meet
the following conditions in addition to those enumerated under Article 8:
for at least 30% of the total assets, intangible assets shall be not more
than 20% of the total assets, except where the SCSC provides otherwise; and
consecutive years.
limited by shares and issue shares to the public, the proportion of the
state-owned capital to the total amount of capital that the company proposes
to issue shall be provided for by the State Council or a department authorized
by the State Council.
public for the purpose of increasing its capital shall meet the following
conditions in addition to those enumerated in Article 8 and 9 hereof:
shares shall have been used in compliance with the description in the
prospectus concerning the use of proceeds and the use of such proceeds shall
have obtained satisfactory results;
public issuance of shares;
from the preceding public issuance of shares to the subject application; and
applies to issue shares to the public shall meet the following conditions in
addition to those enumerated in Article 8 and 9 hereof:
compliance with the description in the prospectus concerning the use of
proceeds and the use of such proceeds shall have obtained satisfactory results;
private placement of shares;
from the preceding placement of shares to the subject application;
distributed in accordance with the prescribed scope by the state and in
centralized custody of the securities dealing institution prescribed by the
state; and
accordance with the following procedure:
asset valuation institution and a law firm, to review and evaluate its credit
history, assets and financial status and to issue legal opinions with respect
to related matters. Thereafter, it shall, in accordance with the applicable
jurisdiction, file an application to issue shares to the public with the
People's Governments of the province, autonomous region, municipality directly
under the Central Government or municipality listed separately under State
plan (hereinafter referred to as the "Local Governments"), or with the
department in charge of central enterprises;
Local Governments shall review for approval share issuance applications of
local enterprises and the departments in charge of central enterprises shall
review for approval the applications of central enterprises after consultation
with the Local Government of the place where the applicant is located; the
Local Government or the department in charge of central enterprises shall,
within thirty business days of the receipt of the shares issuance application,
render a decision after review and shall send a copy of the decision to the
SCSC;
review. The CSSRC shall issue an opinion within twenty business days of its
receipt of the review application and a copy of the CSRC opinion shall be
transmitted to the SCSC. If approval is granted by the CSSRC after review, the
applicant shall file an application with the listing commission of the
relevant securities exchange. The shares may be issued only after the relevant
listing commission has agreed to the listing of the applicant's shares.
the following documents to the Local Government(s) or the department(s) in
charge of central enterprises:
approving the issuance of shares to the public;
limited by shares;
certificate evidencing the subscription for and establishing of the company
limited by shares, issued by the administration for industry and commerce;
company;
fixed asset investment project requiring state provided capital or other
conditions, an approval document from the relevant department of the state
evidencing agreement with the capital investment project proposal shall also
be submitted;
period since its establishment accompanied by an audit report signed by more
than two certified accountants (in addition to the auditing firm) and sealed
by the respective firm;
the respective law firm of such lawyers;
appraisers and sealed by the respective institution of such appraisers and a
verification report signed by more than two certified accountants and sealed
by the respective accounting firm of such accountants; if state-owned assets
are involved, a confirmation document issued by the administrative department
in charge of state-owned assets shall also be furnished;
charge of central enterprises may require.
the CSSRC for review, the following documents shall be submitted in addition
to those enumerated in Article 13 hereof:
central enterprises approving the issuance application; and
prepared in accordance with the form prescribed by CSSRC and shall address the
following matters:
shares that the company proposes to issue in the subject issuance, the par
value and sale price per share, the net asset value attributable to each share
prior to the issuance and the estimated net asset value attributable to each
share on the conclusion of the issuance, distribution expenses and commissions
related to the issuance;
initial issuance, the share rights structure and the verification
certifications for the subscriptions;
and the number of shares to be distributed;
the share issuance, and the methods for share subscription and payment of
purchase;
and risks;
following year's profit of the company, audited by a certified accountant and
for which such accountant has issued an audit opinion;
directors and the supervisors of the company;
years or in the period since the company's establishment and the basic
business development situation;
years or the period since its establishment accompanied by an audit report
signed by more than two certified accountants (in addition to the auditing
firm) and sealed by their respective firm;
information on the use of proceeds from any previous public share issue;
following: "THE ISSUER HEREBY WARRANTS THE TRUTHFULNESS, ACCURACY AND
COMPLETENESS OF THE CONTENTS OF THIS SHARE PROSPECTUS. NO DECISION MADE BY THE
GOVERNMENT OR ANY STATE SECURITIES REGULATORY DEPARTMENT CONCERNING THIS
ISSUANCE INDICATES THAT SUCH BODIES HAVE SUBSTANTIVELY PASSED UPON OR
WARRANTED THE VALUE OF THE SHARES BEING OFFERED BY THE ISSUER OR ANY POTENTIAL
GAIN TO THE INVESTORS."
shall sign the share prospectus, warranting that the share prospectus contains
no false or seriously misleading statements or important omissions and that
such persons will be jointly and severally liable for the same.
their firms, professional appraisers and their institutions and lawyers and
their firms that issue documents for the issuer shall, in accordance with the
recognized business standards and ethics codes of their respective
professions, check and verify the truthfulness, accuracy and completeness of
the contents of the documents that they have issued.
shall disclose in any form the contents of the prospectus. The issuer shall
publicize the share prospectus within two to five business days prior to the
commencement of the distribution period after the public share issuance has
been approved.
distributing securities shall place copies of the prospectus at the place of
business and have the obligation to remind the subscribers to read the
prospectus.
from the date when all of the signatures to the prospectus have been applied.
After the prospectus ceases to be effective the share issuance shall be
terminated immediately.
securities dealing institutions. "Distribution" comprehends two methods:
underwriting and sales on a best effort basis.
distribution agreement, in which the following matters shall be addressed.
representatives;
distributed;
payment therefor;
collects distribution fees shall be determined by the CSSRC.
shall check the truthfulness, accuracy and completeness of the prospectus and
other related materials that are distributed; if it is determined that they
contain false or substantially misleading statements or important omissions,
no offer invitation or offer may be made; if an offer invitation or an offer
has already been made, distribution shall be stopped immediately and
appropriate remedial measure shall be taken.
Renminbi 30,000,000 yuan or the projected total sales price of which may
exceed Renminbi 50,000,000 yuan, shall be distributed by a distribution
syndicate.
institutions. The principal distributor(s) shall be selected by the issuer in
accordance with the principle of fair competition and by means of bid
invitation or consultation. The principal distributor(s) shall sign a
distribution syndicate agreement with the other distributors.
public exceeds Renminbi 100,000,000 yuan or the projected total sales price of
the shares to be offered to the public may exceed Renminbi 150,000,000, the
number of distributors from other localities shall account for a reasonable
proportion of the distribution syndicate and the number of shares to be sold
in other localities shall account for a reasonable proportion of total sales.
other than the province, autonomous region or municipality directly under the
Central Government where the issuer is located.
more than ninety days.
every effort to sell to subscribers the shares that it has undertaken to sell,
and may not keep distributed shares for itself.
shall be disposed of in accordance with the method of underwriting or sale on
a best effort basis, respectively, as agreed in the distribution agreement.
distributing institution or its authorized organ may not collect a fee that
equals more than the cost of the print of subscription form and issuing
expenses. Moreover, such entities may not place a limit on the number of
subscription forms distributed.
to be offered, the distributing institutions shall sell the shares in
accordance with the principle of fairness and by means of proportional
allotments, proportional allotments after cumulative reductions, or by
lottery. In case the lottery method is used, the distributing institution
shall, under the supervision of the notary public office and in accordance
with the prescribed procedures, publicly conduct the lottery form of all the
share subscription applications at a given date and sell shares to those whose
lots are drawn.
unit or individual may distribute or resell share subscription applications.
distribution period, the distributing institutions shall submit to the CSSRC a
written report on the share distribution.
dealing institution intends to make to the public (other than the issuer) an
offer invitation to buy or an offer to sell, or intends to sell, the issuer's
shares in its possession to the public (other than the issuer), the matter
shall be handled in accordance with prescribed procedures, subject to approval
by the CSSRC.
replaces its already issued share certificates with new share certificates,
and no direct or indirect expenses are incurred as a result thereof.
Chapter III The Trading of Shares
exchanges authorized for share trading by the SCSC.
traded on a securities exchange shall meet the following conditions:
Renminbi 50,000,000 yuan;
of which is at least Renminbi 1,000 yuan and the total par value of the shares
owned by individuals is not less than Renminbi 10,000,000 yuan;
consecutive years; in the case of an existing enterprise that is being
restructured as a company limited by shares, the existing enterprise shall
have had a record of profitability over the most recent three consecutive
years, without regard to the newly-established company limited by shares; and
shares traded on a securities exchange and that offers shares to the public
and meets the conditions provided in the preceding Article shall apply to the
listing commission of the relevant securities exchange; the listing commission
shall, within twenty business days upon receipt of the application, make a
decision after review and determine the specific time when the applicant may
be listed. The approved review document shall be submitted to the CSSRC for
the record, with a copy thereof to the SCSC.
traded on a securities exchange shall file the following documents with the
listing commission of the securities exchange:
the period since its establishment audited by an accounting firm, accompanied
by an audit report signed by more than two certified accountants (in addition
to the auditing firm) and sealed by the accounting firm of such accountants;
exchange, the listing company shall make a listing announcement and publicize
the documents listed in Article 32 hereof.
in Article 15 hereof, the contents of the listing announcement shall also
include the following matters:
securities exchange and the approval document number;
names of the ten largest shareholders and the amount of shares they each hold;
general meeting approving the trading of the company's shares on the
securities exchange;
information with respect to their ownership of company shares;
company over the most recent three years or the period since its establishment
and profit projection for the following year; and
their firms, professional appraisers and their institutions and lawyers and
their firms that issue documents for the listing company shall, in accordance
with the recognized business standards and ethics codes of their respective
professions, check and verify the truthfulness, accuracy and completeness of
the contents of the documents that they have issued.
approval by the relevant state authorities, for which specific measures will
be formulated separately.
interests of the state-owned shares.
safekeeping, clearance, transfer, registration and distribution of securities
shall ensure that clients of different localities shall enjoy the same
treatment as the clients of the locality of such institutions and shall not be
discriminated against or be subjected to restrictions.
supervisor, senior management and a legal person shareholder that owns more
than 5% of the voting shares of a company from selling company shares that
such person purchased within the six months prior to such sale, or from
purchasing company shares that such person sold within the six months prior to
such purchase, shall be vested in the company.
management of a legal person shareholder that owns more than 5% of the voting
shares of the company.
industry regulatory personnel and other persons who are prohibited by the
state from buying or selling shares may directly or indirectly own, buy or
sell shares except for the approved securities of investment funds.
asset valuation reports and written legal opinions for the issue of the shares
may not buy or own the subject shares during the distribution period and for
six months after the expiration of such period.
reports and written legal opinions for the listed company may not purchase or
hold the shares of the subject company before such documents as the audit
report, asset valuation report and written legal opinion become public
information; nor may they purchase the shares of the subject company within
five business days after such documents become public information.
shares without approval in accordance with the relevant provisions of the
state.
options or futures or options or futures on share indexes.
shares.
their clients to others or use such shares as security.
approval to undertake more than two activities, including dealing in
securities for its own account, dealing in securities as an agent and the
management of investment funds, shall separate the business personnel, funds
and accounts for the different activities.
Chapter IV Acquisition of Listed Company
shares of a listed company; any amount in excess of such portion shall be
redeemed by the company after it has obtained approval from the CSSRC, at the
original purchase price or the then current market price, whichever is lower.
However, if an individual's holding more than 0.5% of the outstanding common
shares of such company results from the decrease of the total number of the
outstanding common shares of such company, then the amount in excess of such
portion shall not be redeemed for a reasonable time.
issued outside China that are held by individuals of a foreign country or
individuals of the Hong Kong, Macao and Taiwan regions are not subject to the
0.5% restrictions set forth in the preceding paragraph.
outstanding common shares of a listed company, it shall, within three business
days of the occurrence of such fact, report the same in writing to such
company, the securities exchange and the CSSRC and make such occurrence
public. However, if a legal person's holding of more than 5% of the
outstanding common shares of such company results from the decrease of the
total number of the outstanding common shares of such company, then it shall
not be subject to the above requirements for a reasonable time.
listed company changes up or down by more than 2% of the total number of such
shares after it has held more than 5% of such outstanding shares, it shall,
within three business days of the occurrence of such fact, report the same in
writing to such company, the securities exchange and the CSSRC and make such
occurrence known to the public.
sales of such share within two business days after the date it reports in
writing and makes an announcement to the public in accordance with the
provisions of the preceding paragraph and prior to its written report.
indirectly owns at least 30% of the outstanding common shares of a listed
company, it shall, within forty-five business days of the occurrence of such
fact, make an acquisition offer to all shareholders of the company, to buy
their shares for cash at a price equal to the highest of the following:
the 12 months prior to its making of the acquisition offer; and
prior to the making of the acquisition offer.
further purchases of such shares before they make the acquisition offer.
shall report in writing to the CSSRC about the intended acquisition;
simultaneous with the acquisition offer, it shall provide the offerees and the
relevant securities exchange with a statement about itself and all information
relating to such offer and shall guarantee that the materials are true,
accurate, complete and not misleading.
days, commencing from the date the acquisition offer is given. The acquisition
offeror may not withdraw its acquisition offer within thirty business days
after the giving of the acquisition offer.
shareholders of the same shares.
acquisition offer, the number of common shares that the acquisition offeror
holds does not equal at least 50% of the outstanding common shares of the
company; other than new acquisition offers made by such offeror, the
outstanding common shares of the company thereafter that he purchases may not
exceed 5% of the total outstanding common shares of the company.
holds more than 75% of the total outstanding common shares of such company,
such company shall terminate trading on the relevant securities exchange.
of shares which the offerees have agreed to sell into the offer, the
acquisition offeror shall purchase such shares pro rata from all offerees that
have accepted the acquisition offer.
holds up to 90% the total common shares of such company, the remaining
shareholders shall be entitled to sell their shares to the acquisition offeror
on the same terms.
change in the key terms of the offer, the acquisition offeror shall
immediately notify all the offerees of such change, through a press conference,
by newspaper or by other means of communication.
of the offer, the acquisition offeror may not purchase the subject shares on
any terms other than those provided for in the offer.
rights prior to the expiration of the acquisition offer.
Chapter V Safekeeping, Clearance and Transfer
issue book entry shares and may also issue shares represented by physical
certificates. The register for book entry shares shall be placed in
safekeeping with an institution designated by the CSSRC. Shares represented by
physical certificates, if kept together, shall also be placed in safekeeping
with an institution designated by the CSSRC.
shares, the institution keeping the share certificates may not lend the shares
of such holder to other persons or pledge them as security.
the principle of convenience, security and fairness, formulate the operational
rules and internal administrative rules with respect to share clearance and
transfer.
with the principle of fairness.
transfer and registration of securities shall be subject to the supervision
and regulation of the CSSRC.
Chapter VI Disclosure of Listed Companies
securities exchange with the following documents:
first six months of each financial year; and
one hundred and twenty days after the end of each financial year.
principles and the relevant provisions of the CSSRC. They each shall be signed
by an authorized director or manager and shall be sealed by the listed company.
include the following:
operating results of the company;
shareholders for review; and
include the following contents:
important factories, mines and real property;
names of shareholders who hold 5% or more of the company's outstanding
common shares and the names of the ten largest shareholders of the company;
the company, their ownership of company shares and their remuneration;
its affiliates;
years or the period since its establishment;
operating results of the company;
the company;
financial years with schedules and notes, audited by a certified accountant;
if the listed company is a holding company, there shall also be submitted a
consolidated financial report comparing the two most recent years; and
impact on the market price of the shares of a listed company that the
investors are not as yet aware of, the listed company shall immediately submit
to the relevant securities exchange and the CSSRC a report on the major event
and promulgate and explain the essence of the event to the public. However, if
the listed company has adequate reason to believe that the promulgation of
such major event to the public will jeopardize the interests of the listed
company and the failure to promulgate information with respect to it will not
result in a substantial change in the market price of the shares, then, upon
approval by the relevant securities exchange, such event needs not be
promulgated.
the following situations:
substantial impact on the assets, liabilities, interests and one or more
operational results of the company;
company;
a substantial amount;
loan;
and operational environment;
a substantial impact on the operations of the company;
directors, or the general manager, is replaced;
the outstanding common shares of the company changes up or down by 2% of the
total number of the shares;
have a misleading impact on the market price of the shares of a listed
company, such company shall publicly issue a clarification with respect to
such information immediately after it becomes aware of the same.
company who hold common shares of the company shall report their holdings of
such shares to the CSSRC, the relevant securities exchange and such company;
if there is any change in their holdings, they shall report the same to the
CSSRC, the relevant securities exchange and such company within ten business
days of such change.
reporting obligations in accordance with the provisions of this Article for
six months after their resignation or relocation.
listed company in newspapers and magazines of national circulation designated
by the CSSRC.
provisions of the preceding paragraph, it may, at the same time, promulgate
the relevant information in local newspapers and magazines designated by the
relevant securities exchange.
and other documents submitted by a listed company and its directors,
supervisors, senior management and shareholders of more than 5% of the
outstanding common shares for investor review.
information, with the exception of the following:
laws or regulations;
course of investigating illegal activities; and
permitted in accordance with the provisions of relevant laws or regulations.
his/her behalf consent or voting rights. However, when any person attempts to
solicit consent or voting rights from more than twenty-five persons, the
provisions of the CSSRC concerning information disclosure and the submission
of reports shall be complied with.
securities exchange of the reports, announcements, information and documents
provided in this Chapter, a listed company shall also submit the related
reports, announcements, information and documents in accordance with all
provisions of the relevant securities exchange and shall publicize them to all
shareholders.
companies limited by shares that have issued on to the public but have not had
their shares traded on a securities exchange.
Chapter VII Investigation and Sanctions
relevant state authorities, to conduct investigation of any unit or individual
that violates the provisions of these regulations; serious cases shall be
investigated under the direction of the SCSC.
dealing institutions.
these regulations by committing one of the following acts shall, in accordance
with the circumstances, be given one or a combination of the following
sanctions: warning, compulsory recession of the share capital raised
illegally, confiscation of illegal income or fine; when the circumstances are
serious, the company shall be suspended from issuing shares:
approval;
by fraud or other improper means;
scope or selling shares after the share prospectus ceases to be effective; and
shares that are directly responsible for the acts enumerated in the preceding
paragraph shall be given a warning or fined an amount of more than 30,000 yuan
and under 300,000 yuan.
of these regulations by committing one of the following acts shall, in
accordance with circumstances, be given one or a combination of the following
sanctions: warning, confiscation of the shares acquired illegally and other
illegal income, or a fine; when the circumstances are serious, the
institution's securities dealing business shall be restricted or temporarily
suspended or its business license for dealing in securities shall be canceled:
procedures and method;
with the relevant provisions;
clients or guaranteeing to the clients that losses will be avoided when buying
or selling shares as an agent of the clients; and
other personnel directly responsible, for the acts enumerated in the preceding
paragraph shall be given a warning or fined an amount of more than 30,000 yuan
but less than 300,000 yuan.
by inappropriate means violate the provisions of these regulations by
disclosing inside information, buying or selling shares or tipping other
persons on the buying or selling of shares on the basis of inside information,
they shall, in accordance with the circumstances, have the illegally acquired
shares and other illegal income confiscated and in addition shall be fined
more than 50,000 yuan but less than 500,000 yuan.
securities industry and other personnel prohibited by the state from buying or
selling shares violate the provisions of these regulations by directly or
indirectly owning or buying or selling shares, they shall, in addition to
being ordered to sell the shares that they own within a specified time limit
and in accordance with the circumstances, be given one or a combination of the
following sanctions: warning, confiscation of illegal income, and a fine of
more than 5,000 yuan but less than 50,000 yuan.
violates the provisions of these regulations by issuing documents with false
or seriously misleading contents or major omissions, it shall, in accordance
with the circumstances, be given one or a combination of the following
sanctions: warning, confiscation of illegal income, and fines; if the
circumstances are serious, its securities connected business shall be
temporarily suspended or its license permitting it to undertake securities
related activities canceled.
responsible for the acts enumerated in the preceding paragraph may be given a
warning or fined more than 30,000 yuan but less than 300,000 yuan, if the
circumstances are serious, such professionals' qualification to engage in the
securities business shall be terminated.
Regulations by committing any one of the following acts shall, in accordance
with the circumstances, be given one or a combination of the following
sanctions: warning, confiscation of the illegally-acquired shares and other
illegal income, and a fine:
SCSC has approved as a site where shares may be traded;
important information in the course of issuing and trading shares;
influencing the issuance and trading of shares by spreading rumors and similar
means;
sales without transferring ownership or effective control of the shares for
the purpose of creating false share prices;
shares not held;
persons in buying or selling shares by taking advantage of one's office or by
other improper means;
approval;
relevant documents and information;
ledgers and other documents related to the issuance and trading of shares; and
similar activities;
the preceding paragraph may be suspended from issuing shares if the
circumstances are serious; a securities dealing institution that commits any
of the acts referred to in the preceding paragraph may have its securities
dealing operations restricted or suspended or have its business license for
securities dealing canceled.
hereof shall be determined by a SCSC-designated authority; sanctions for major
cases shall be submitted to the SCSC for determination. The sanctions provided
for in Article 73 hereof shall be determined by the relevant departments in
accordance with the scope of their power.
self-regulatory organs of the securities industry's member units or employees
that violate the provisions of these Regulations shall, in addition to being
subject to administrative sanctions in accordance with the provisions of these
Regulations, be punished by the securities exchange or other self-regulatory
organs of the securities industry in accordance with their articles of
association or self-regulating rules.
damages to other persons shall make the violators liable to pay civil
compensation.
shall be investigated for criminal liability in accordance with the law.
Chapter VIII Arbitration of Disputes
trading of shares, the parties may, in accordance with the provisions of their
agreement, apply to an arbitration organ for mediation or arbitration.
securities dealing institution and a securities exchange arising from the
issuance or trading of shares shall be resolved through mediation or
arbitration under the auspices of an arbitration organ that has been
established with the approval of the SCSC or is designated by the SCSC.
Chapter IX Supplementary Articles
following meanings:
company limited by shares indicating that its shareholders enjoy rights and
bear obligations in accordance with the shares held by such shareholders.
produced in accordance with the uniform form provided for by the CSSRC and
that records the interests of the shareholders.
certificates that the issuer has uniformly printed at a CSSRC-designated
printing institution.
company other than treasury shares.
invitations, offers or sales with respect to the issuer's shares that the
issuer makes to the public (other than the issuer itself) through securities
dealing institutions.
dealing institution distributes the issuer's shares by means of underwriting
or sales on a best efforts basis.
that sells the issuer's shares by means of underwriting or sale on a best
effort basis.
whereby the securities dealing institution shall purchase all of the unsold
shares upon the expiration of the issuing period.
distribution whereby the securities dealing institution shall return all the
unsold shares to the issuer or underwriter upon the expiration of the issuing
period.
disclosed in accordance with the provisions of these Regulations are published
in newspapers and magazines designated by the CSSRC.
disclosed in accordance with the provisions of these Regulations are placed at
the business offices of the issuer and its securities distributing institution
and at the CSSRC, for review and examination by the investors.
places or non- private offerees to buy or sell certain shares.
persons to make an offer to the person that makes the invitation.
acceptance by the offeree of an offer, which shall not constitute an
acceptance prior to the expiration of the offer.
of which have been approved to be traded on a securities exchange.
inside information because of its holdings of the issuer's shares, or because
of its position as a director, supervisor or senior manager of the issuer or
of the enterprises that have close connections with the issuer, or because of
its membership, managerial position, supervisory role or professional
connection, or because it performs duties as an employee or professional
advisor.
an impact on the market price, of which the relevant issuer, securities
dealing institutions, legal persons intending to complete an acquisition,
securities supervisory and regulatory organs, self-regulatory organs of the
securities industry and the personnel that have close connections with them
have knowledge and which has not yet been made public.
securities trading quotation system which has been established after approval
for the trading of shares.
staff of the regulatory departments and the self-regulatory organs of the
securities industry.
institutions that issue and trade shares and undertake other related
businesses.
institutions and securities exchanges shall be formulated separately.
and employees of an issuer.
Regulations.
their promulgation.
URL: http://www.asianlii.org/cn/legis/cen/laws/protaosiat708