中华人民共和国证券法（一）
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中华人民共和国证券法 Securities Law of the People's Republic of China (Adopted at the 6th Meeting of the Standing Committee of the 9th National People's Congress on December 29, 1998 and promulgated by Order No. 12 of the President of the People's Republic of China on December 29, 1998) Contents Chapter I General Provisions Chapter II Securities Issuance Chapter III Securities Trading Section 1 General Rules Section 2 Securities Listing Section 3 Sustained Open Information Section 4 Prohibited Trading Acts Chapter IV Listed Company Acquisition Chapter V Securities Exchanges Chapter VI Security Companies Chapter VII Securities Registration and Settlement Agencies Chapter VIII Securities Trading Services Agencies Chapter IX Securities Industry Associations Chapter X Securities Supervision and Administration Institutions Chapter XI Legal Liability Chapter XII Supplementary Provisions Chapter I General Provisions Article 1 This Law is enacted for purposes of standardizing acts of securities issuance and trading, protecting the legitimate rights and interests of investors, maintaining socioeconomic order and public interest of society and promoting the development of the socialist market economy. Article 2 This Law shall be applicable to the issuance and trading of stocks, corporate bonds and other securities confirmed by the State Council according to law within the territory of China. Where there are no provisions in this Law, provisions of the Company Law, and other laws and regulations shall be applicable. Issuance and trading of government bonds shall be prescribed by law or administrative regulations separately. Article 3 The principle of openness, fairness and justice must be practised in operations of securities issuance and trading. Article 4 Parties interested in operations of securities issuance and trading have equal legal status and should abide by the principle of voluntariness, compensation, honesty and trustworthiness. Article 5 Operations of securities issuance and trading must abide by laws and administrative regulations; acts of fraud, inside trading and manipulation of securities trading markets shall be prohibited. Article 6 The securities industry and banking industry, trust business and insurance industry shall be put under separate industry-wise management and separate industry-wise administration. Security companies and banking, trust and insurance business institutions shall be established separately. Article 7 The securities supervision and administration institution under the State Council practises centralized and unified supervision and administration of securities markets nationwide. The securities supervision and administration institution under the State Council may establish representative offices which shall fulfil the duties and responsibilities authorized. Article 8 Securities industry associations established according to law shall practise self-policing administration under the prerequisite of the exercise by the state of centralized and unified supervision and administration over operations of securities issuance and trading. Article 9 State audit organs shall conduct audit supervision according to law over securities exchanges, security companies, securities registration and settlement agencies and securities supervision and administration institutions. Chapter II Securities Issuance Article 10 Public issuance of securities must conform to the criteria prescribed by laws and administrative regulations, and be submitted to the securities supervision and administration institution under the State Council or the departments authorized by the State Council according to law for verification and approval or examination and approval; no unit or individual shall, without verification and approval or examination and approval according to law, publicly issue securities in society. Article 11 Public issuance of stocks must, pursuant to the conditions prescribed in the Company Law, be submitted to the securities supervision and administration institution under the State Council for verification and approval. The issuer must present the application document prescribed by the Company Law and the relevant documents prescribed by the securities supervision and administration institution under the State Council to the securities supervision and administration institution under the State Council. Issuance of corporate bonds must, pursuant to the criteria prescribed in the Company Law, be submitted to the department authorized by the State Council for examination and approval. The issuer must present the application document prescribed by the Company Law and other documents prescribed by the department authorized by the State Council to the department authorized by the State Council. Article 12 The format and ways of submission of the application document to be presented by the issuer for application for public issuance of securities according to law shall be prescribed by the institution or department responsible for verification and approval or examination and approval according to law. Article 13 The application document for securities issuance to be presented by the issuer to the securities supervision and administration institution under the State Council or the department authorized by the State Council must be truthful, accurate and complete. The specialized agencies and personnel for drawing up relevant documents for securities issuance must strictly fulfil the legal duties and responsibilities to ensure the truthfulness, accuracy and completeness of the documents drawn up by them. Article 14 An issuance examination and verification commission shall be established under the securities supervision and administration institution under the State Council for examination and verification of applications for issuance of stocks in accordance with law. The issuance examination and verification commission shall be composed of specialized personnel of the securities supervision and administration institution under the State Council and specialists concerned employed from outside the said institution and come up with views on examination and verification and decide by vote on applications for stock issuance in the form of ballot. Specific measures for the composition, tenure of office for its members and the working procedures of the issuance examination and verification commission shall be formulated by the securities supervision and administration institution under the State Council and submitted to the State Council for approval. Article 15 The securities supervision and administration institution under the State Council shall, pursuant to legal conditions, be responsible for the verification and approval of applications for stock issuance. The procedures for verification and approval shall be open and be subject to supervision in accordance with law. Personnel participating in the verification and approval of applications for stock issuance shall not have relations of interests with issuance application units; shall not accept present(s) of issuance application unit(s); shall not hold stocks the issuance application of which has been approved; and shall not come into contact with issuance application unit(s)in private. Examination and approval of applications for issuance of corporate bonds by the departments authorized by the State Council shall be processed by referring to the provisions of the two preceding paragraphs. Article 16 The securities supervision and administration institution under the State Council or the departments authorized by the State Council should, within 3 months starting from the date of acceptance of securities issuance application documents, make a decision; explanations shall be made for non-approval or non examination and approval. Article 17 An issuer shall, with the approval or examination and approval of the securities issuance application, make an announcement of the document on public issuance and raising and place the said document at designated site(s) for public reference prior to the public issuance of the securities pursuant to the provisions of laws and administrative regulations. Prior to the information on securities issuance being made public in accordance with law, no insider shall make public or disclose the said information. No issuer shall issue securities prior to the announcement of the document on public issuance and raising. Article 18 The securities supervision and administration institution under the State Council or the departments authorized by the State Council shall, upon discovery of the decision already made on the approval or examination and approval of securities issuance to be not in conformity with the provisions of laws and administrative regulations, revoke the said decision; where issuance of securities has not been initiated, the issuance shall be suspended; where the securities have already been issued, the securities holders may, in accordance with the issuing price with the added calculation of interests for deposit of the corresponding period, ask the issuer for refund. Article 19 The issuer shall be responsible for himself/herself for changes in the management and returns of the issuer after issuance of the stocks in accordance with law; the investors shall be responsible for himself/herself for investment risks resulting from the changes. Article 20 New stocks issued by a listed company should conform to the conditions governing issuance of new stocks specified in the Company Law, and may be raised in public in society, or allocated to original stock-holders. Funds raised by a listed company from stock issuance must be used according to the uses of the funds listed in the prospectus. Change in fund uses listed in the prospectus must be subject to the approval of the general meeting of shareholders. Where arbitrary change in use without rectification has occurred, or the change has taken place without affirmation of the general meeting of shareholders, no new stocks shall be issued. Article 21 Security companies should, pursuant to the provisions of laws and administrative regulations, sell issuers' securites for public issuance in society. Securities sales business take the form of sale on a commission basis or exclusive sales. Sale on a commission basis of securities mean the form of underwriting of selling of securities by security companies for issuers and returning all the unsold securities to issuers at the conclusion of the selling period. Exclusive sales of securities mean the form of underwriting of total buying in of issuers' securities by security companies or total buying in of the securities left over after sales by security companies themselves at the conclusion of the selling period in accordance with agreement. Article 22 An issuer of securities for public issuance has the right to choose independently an underwriting security company in accordance with law. No security company shall solicit business of underwriting by means of unfair competition. Article 23 A security company shall, in business of underwriting, conclude an agreement on the sale on a commission basis or exclusive sales with the issuer carrying the following particulars: (1)names and residences of the parties interested and names of legal representatives; (2)types, quantity, amount and issuing price of the securities for sale on a commission basis or exclusive sales; (3)duration for sale on a commission basis or exclusive sales and dates of commencement and termination; (4)mode of payment and dates for sale on a commission basis or exclusive sales; (5)charges and settlement measures for sale on a commission basis or exclusive sales; (6)liability for breach of contract; and (7)other matters prescribed by the securities supervision and administration institution under the State Council. Article 24 A security company shall, in business of underwriting, check and verify the truthfulness, accuracy and completeness of the document for public issuance and raising; no sales operations shall be carried out upon uncovering of the document containing false recordings, misleading statements or having major omissions; where sales have been under way, the sales operations must be suspended forthwith and correction measures shall be taken. Article 25 Underwriting of securities for public issuance in society the total face value of which exceeds RMB 50 million Yuan shall be undertaken by an underwriting syndicate. The underwriting syndicate shall be composed of the leading underwriting security company and participating underwriting security companies. Article 26 The longest duration for sale on a commission basis or exclusive sales of securities shall not exceed 90 days. A security company shall, within the duration of sale on a commission basis or exclusive sales, ensure that the securities it has undertaken for sale on a commission basis or exclusive sales are first sold to the subscribers, and the security company shall not retain in advance the securities the sale on a commission basis of which has been undertaken by the company and buy in beforehand and retain the securities undertaken by the company for exclusive sales. Article 27 A security company that undertakes exclusive sales of securities shall, within 15 days at the expiration of the duration for exclusive sales, submit the information on exclusive sales to the securities supervision and administration institution under the State Council for the record. A security company that undertakes sales of securities on a commission basis shall, within 15 days at the expiration of the duration for sale on a commission basis, together with the issuer submit the information on the sales of securities on a commission basis to the securities supervision and administration institution under the State Council for the record. Article 28 Where stock issuance takes the form of premium issuance, its issuing price shall be decided by the issuer and the underwriting security company through consultation and submitted to the securities supervision and administration institution under the State Council for verification and approval. Article 29 A domestic enterprise that goes in for direct or indirect issuance of securities overseas or listing for trading of its securities overseas must be subject to the approval of the securities supervision and administration institution under the State Council for approval. Chapter III Securities Trading Section 1 General Rules Article 30 Securities bought or sold according to law by parties interested to securities trading must be securities issued and delivered in accordance with law. No securities issued not in accordance with law shall be bought or sold. Article 31 Stocks, corporate bonds and other securities issued in accordance with law restrictive provisions have been imposed by law on their time limit for transfer shall not be bought or sold within the restricted time limit. Article 32 Stocks, corporate bonds and other securities the listing for trading of which has been verified and approved in accordance with law should be listed for trading at securities exchanges. Article 33 Listing for trading of securities at securities exchanges should take the form of open and centralized competitive bidding. Centralized competitive bidding in securities trading should follow the principle of price preference and time preference. Article 34 Securities bought or sold by parties interested to securities trading may take paper form or other forms laid down by the securities supervision and administration institution under the State Council. Article 35 Transactions in securities trading shall be concluded in spot stocks. Article 36 Security companies shall not engage in securities trading operations of financing or securities accommodation from clients. Article 37 Employees of securities exchanges, security companies and securities registration and settlement agencies, staff members of securities supervision and administration institutions and other personnel prohibited from participating in stocks trading by laws and regulations shall not, within their tenure of office or the legal time limit, hold, buy or sell stocks directly or use an assumed name or in the name of others, nor shall they accept stocks donated by others. Anyone must, at the time becoming one of the personnel listed in the preceding paragraph, transfer the stocks originally held by him/her according to law. Article 38 Securities exchanges, security companies and securities registration and settlement agencies must maintain secrecy for the accounts opened for their clients according to law. Article 39 The specialized agency and personnel for drawing up such papers as the audit report, assets assessment report or legal advice for stock issuance shall not, within the underwriting period of the said stocks and within 6 months at the expiration of the time period, buy or sell the said stocks. In addition to the provisions of the preceding paragraph, the specialized agency and personnel for drawing up the audit report, assets assessment report or legal advice for a listed company shall not, starting from the date of acceptance of entrustment of the listed company to within 5 days after the above-mentioned documents have been made public, buy or sell the said stocks. Article 40 Collection of fees for securities trading must be reasonable and items for fee collection, rates for fee collection and methods of fee collection shall be made public. Items for fee collection, rates of fee collection and measures for administration shall be uniformly determined by the departments of administration concerned under the State Council. Article 41 A stockholder holding 5% of the stocks issued by a joint-stock company limited should, within 3 days starting from the date of the amount of stocks held by him/her reaching the said percentage, report to the company which must report to the securities supervision and administration institution under the State Council within 3 days starting from the date of receipt of the report; when it belongs to a listed company, a report shall be submitted simultaneously to the securities exchanges. Article 42 The stockholder prescribed in the preceding Article who sells the stocks of the said company held by him/her within 6 months after buying in, or again buys in within 6 months of selling, the returns accrued therefrom shall belong to the said company, and the board of directors of the company should withdraw the returns gained by the said stockholder. However, a security company that holds more than 5% of the stocks as a result of the left-over stocks after sales of buying in for exclusive sales, its sale of the said stocks shall not be subject to the time limit of 6 months. Where the board of directors of a company fails to implement the provisions of the preceding paragraph, other stockholders have the right to demand implementation by the board of directors. Where the board of directors of a company fails to implement the provisions of the First Paragraph resulting in damage to the company, the director(s) held responsible shall bear joint responsibility for compensation in accordance with law. Section 2 Securities Listing Article 43 Application by a joint-stock company limited for listing for trading of its stocks must be submitted to the securities supervision and administration institution under the State Council for verification and approval. The securities supervision and administration institution under the State Council may authorize securities exchanges to verify and approve applications for listing of stocks pursuant to legal terms and legal procedures. Article 44 The state encourages the listing for trading of corporate stocks conforming both to the industrial policy and conditions for listing. Article 45 The following documents shall be presented at the time of filing an application for listing for trading with the securities supervision and administration institution under the State Council: (1)a report on listing; (2)the resolution of the general meeting of shareholders for the application for listing; (3)articles of association of the company; (4)business licence of the company; (5)financial and accounting reports of last three years of the company or those since the establishment of the company examined and certified by a legal certification agency; (6)legal advice and a letter of reference by a security company; and (7)the latest prospectus. Article 46 An issuer shall, upon verification and approval of the application for listing for trading of the stocks by the securities supervision and administration institution under the State Council, present the approval document and the relevant documents prescribed in the preceding paragraph to securities exchanges. The securities exchanges shall, within 6 months starting from the date of receipt of the documents prescribed in the preceding paragraph presented by the issuer of the said stocks, arrange the listing for trading of the said stocks. Article 47 The listed company shall, upon the consent of the securities exchanges on the application for listing for trading of its stocks, announce the approved relevant documents for the listing of the stocks, and place the said documents at a designated place for public reference 5 days before the listing for trading. Article 48 In addition to announcing the application document for listing prescribed in the preceding Article, the listed company shall also announce the following particulars: (1)the date of approval of trading of its stocks at securities exchanges; (2)list of the top ten stockholders holding maximum shares of the company and the number of shares held by them; and (3)names of directors, commissioners, managers and high-level administrators concerned and information on the stocks and bonds of the company held by them. Article 49 For a listed company that has forfeited the listed requirements prescribed by the Company Law, its stocks shall be suspended for listing or terminated for listing according to law. Article 50 An application by a company for listing for trading of the corporate bonds issued by it must be submitted to the securities supervision and administration institution under the State Council for verification and approval. The securities supervision and administration institution under the State Council may authorize a securities exchange in the verification and approval of the application for listing of corporate bonds pursuant to legal terms and legal procedures. Article 51 Application by a company for listing for trading for its corporate bonds must meet the following requirements: (1)the time limit of the corporate bonds shall be more than one year; (2)the actual issuance amount of the corporate bonds shall not be less than RMB 50 million Yuan; and (3)the company still meets the legal requirements for the issuance of corporate bonds at the time of application for listing of its bonds. Article 52 The following documents shall be presented at the time of filing an application for listing of corporate bonds with the securities supervision and administration institution under the State Council: (1)a report on listing; (2)the resolution of the board of directors on the application for listing; (3)articles of association of the company; (4)business licence of the company; (5)measures for the raising of corporate bonds; and (6)the actual amount of issuance of corporate bonds. Article 53 Upon verification and approval of the application for listing for trading of corporate bonds, their issuer should present the approval document and the relevant documents prescribed in the preceding Article to the securities exchanges. The securities exchanges should, within 3 months starting from the date of receipt of the documents prescribed in the preceding Article which have been presented by the said bonds issuer, arrange the listing for trading of the said bonds. Article 54 The issuer should, upon consent of the application for listing for trading of corporate bonds by the securities exchanges, announce the report on the listing of corporate bonds, the approval document and relevant application documents for listing 5 days before the listing for trading of the corporate bonds, and place them at a designated place for public reference. Article 55 Any company that has any of the following circumstances following the listing for trading of its corporate bonds, the listing for trading of its corporate bonds shall be temporarily suspended according to the decision of the securities supervision and administration institution under the State Council: (1)the company has committed major illegal acts; (2)a major change has taken place in the company that does not conform to the listing requirements for corporate bonds; (3)the funds raised through corporate bonds have not been used in uses approved by the examination and approval organ; (4)failure to fulfil obligations in accordance with the measures for the raising of corporate bonds; and (5)the company has suffered losses for two consecutive years. Article 56 Any company that has any of the circumstances listed in Section (1) and Section (4) of the preceding paragraph which has been ascertained to have serious consequences, or has any of the circumstances listed in Section(2), Section (3) and Section (5) of the preceding paragraph which has not been removed within the specified time period, the listing of the said corporate bonds shall be terminated according to the decision of the securities supervision and administration institution under the State Council. In the event of disbandment, being ordered to close down according to law or declared bankrupt of a company, the securities exchanges shall terminate the listing of its corporate bonds and submit a report to the securities supervision and administration institution under the State Council for the record. Article 57 The securities supervision and administration institution under the State Council may authorize securities exchanges to suspend or terminate the listing of stocks or corporate bonds according to law. Section 3 Sustained Open Information Article 58 For issuance of stocks according to law verified and approved by the securities supervision and administration institution under the State Council, or issuance of corporate bonds according to law approved by the departments authorized by the State Council, an announcement shall, pursuant to the provisions of the Company Law, be made on the prospectus and measures for the raising of corporate bonds. For issuance of new shares or corporate bonds according to law, an announcement shall also be made on the financial and accounting report. Article 59 Documents for the issuance and listing of stocks or corporate bonds announced by a company must be truthful, accurate and complete, and must not carry false recordings, misleading statements or have major omissions. Article 60 Any company whose stocks or corporate bonds have been listed for trading should, within two months starting from the date of the conclusion of the first half of every accounting year, submit a mid-term report recording the following contents to the securities supervision and administration institution under the State Council and the securities exchanges and make an announcements thereof: (1)the financial and accounting report and management information of the company; (2)particulars involving the company's major litigations; (3)information on changes in stocks and corporate bonds already issued; (4)major matters presented to the general meeting of stockholders for review; and (5)other matters prescribed by the securities supervision and administration institution under the State Council. Article 61 Any company whose stocks or corporate bonds have been listed for trading should, within four months starting from the date of the conclusion of every accounting year, submit an annual report recording the following contents to the securities supervision and administration institution under the State Council and the securities exchanges and make an announcement thereof: (1)an overview of the company; (2)the financial and accounting report and management information of the company; (3)brief life sketches of the directors, commissioners, managers and high-level administrators concerned and information on stocks held by them; (4)information on the stocks and corporate bonds already issued including a list of the top 10 stockholders holding the maximum shares of the company and the amount of shares held by them; and (5)other matters prescribed by the securities supervision and administration institution under the State Council. Article 62 A listed company should, in the event of occurrence of a major event which may have a big impact on the trading price of the stocks of the listed company yet the investors are unaware thereof, submit forthwith an interim report on the said major event to the securities supervision and administration institution under the State Council and the securities exchanges, and make an announcement thereof, explaining the substance of the event. The following situations shall be construed as major events referred to in the preceding paragraph: (1)major changes in the management policy and business scope of the company; (2)decision(s) on major investment acts and major property acquisition of the company; (3)an important contract concluded by the company that may have crucial impact on the assets, liabilities, rights and interests and management achievements; (4)the situation of occurrence of major liabilities and failure to liquidate major liabilities due for breach of contract by the company; (5)incurring of major losses or major losses exceeding 10% of the net assets of the company; (6)major changes have taken place in the external conditions for the production and management of the company; (7)changes have taken place in the chairman of the board of directors, and over one third of the directors or managers; (8)great changes have occurred in the shares held by stockholders holding more than 5% of the company's shares; (9)decision on investment reduction, amalgamation, separation, disbandment and bankruptcy application of the company; (10)revocation of resolution(s) of the general meeting of stockholders and board of directors by a court according to law on major litigation(s)involving the company; and (11)other matters prescribed by laws and regulations. Article 63 Any issuer, underwriting security company that has false recordings, misleading statements or major omissions resulting in losses of investors in securities trading in announcing the prospectus, measures for the raising of corporate bonds, the financial and accounting report, the listing reporting document, annual report, mid-term report, interim report, the issuer, underwriting security company should bear the responsibility for compensation, and the issuer, directors, commissioners and managers of the underwriting security company held responsible should bear joint responsibility for compensation. Article 64 The announcements that have to be made pursuant to the provisions of laws and regulations should be carried in newspapers and periodicals designated by the departments concerned of the state or in a gazette published for the specific purpose, and shall be placed at offices of the companies and securities exchanges for reference by the public of society. Article 65 The securities supervision and administration institution under the State Council shall exercise supervision over the annual reports, mid-term reports, interim reports as well as announcements of the listed companies, and exercise supervision over the distribution or allotment of new stocks for sale. Securities supervision and administration institutions, securities exchanges, underwriting security companies and the personnel concerned must not disclose the contents of the announcements that have to be made by the companies pursuant to the provisions of laws and regulations prior to the announcement. Article 66 The securities supervision and administration institution under the State Council shall make an announcement in time with respect to the nullification of listing qualifications of a listed company that has committed major illegal acts or does not possess other conditions for listing. A securities exchange shall make an announcement in time when making a decision prescribed in the preceding paragraph pursuant to authorization and submit it to the securities supervision and administration institution under the State Council for the record. Section 4 Prohibited Trading Acts Article 67 Insiders of securities trading inside information shall be prohibited from carrying out securities trading operations by taking advantage of the inside information. Article 68 The following personnel shall be the insiders having knowledge of securities trading inside information: (1)directors, commissioners, managers, assistant managers and high-level administrators concerned of companies issuing stocks or corporate bonds; (2)stockholders holding more than 5% of the shares; (3)high-level administrators of holding companies of a company issuing stocks; (4)personnel who due to their positions in companies are able to obtain information on securities trading of the companies; (5)staff members of securities supervision and administration institutions and other personnel exercising administration over securities trading owing to legal responsibilities; (6)personnel concerned of intermediary agencies of society participating in securities trading or securities registration and settlement agencies and securities trading services agencies owing to legal responsibilities; and (7)other personnel prescribed by the securities supervision and administration institution under the State Council. Article 69 Information involving the management, finance of a company or having a major impact on the market price of the securities of the said company not yet made public in securities trading operations shall be inside information. The following items of information all fall into inside information: (1)major events listed in the Second Paragraph of Article 62 of this Law; (2)the plan of a company for dividend distribution or investment increment; (3)major changes in stock ownership of a company; (4)major changes in liability guaranty of a company; (5)mortgage, sale or scrapping of the major assets of a company for business purposes exceeding 30% of the said assets for a single time; (6)acts of directors, commissioners, managers, assistant managers or other high-level administrators of a company possible of bearing liability for major damage compensation; (7)the plan governing acquisition of a listed company; and (8)other important information affirmed by the securities supervision and administration institution under the State Council to have a marked impact on securities trading prices. Article 70 Insiders having knowledge of securities trading inside information or other personnel having obtained the inside information illegally must not buy in or sell the securities of the said company held by him/her/them, or disclose the said information or suggest others to buy or sell the said securities. Where this Law has separate provisions, those provisions shall be applicable to the purchase of shares of a listed company by a stockholder holding more than 5% of the shares. Article 71 Anyone shall be prohibited from employing the following means to obtain unjust interests or shift risks: (1)to concentrate efforts in making use of the advantage in funds, the advantage in holdings or the advantage in information individually or in collusion in joint or continuous buying and selling and manipulating securities trading prices; (2)to engage in mutual securities trading or mutual buying and selling of securities not held to influence securities trading price or securities trading volume at the time, price and in the mode agreed on in advance in collusion with others; (3)to make oneself the object of trading to engage in self-buying and self-selling without transfer of ownership to influence securities trading price or securities trading volume; and (4)to manipulate securities trading price by other means. Article 72 Functionaries of the state, employees of news media and relevant personnel are prohibited from fabricating and disseminating false information to seriously influence securities trading. Securities exchanges, security companies, securities registration and settlement agencies, securities trading services agencies, intermediary agencies of society and their employees, securities industry associations, securities supervision and administration institutions and their staff members are prohibited from making false statements or providing information misguidance in securities trading operations. Dissemination of securities trading information by various media must be truthful, objective and misguidance shall be prohibited. Article 73 Security companies and their employees shall, in securities trading, be prohibited from engaging in the following fraudulent acts of harming the interests of clients: (1)to buy or sell securities for the client contrary to his/her entrustment; (2)to provide the client with the written confirmation document of the trading not at the fixed time; (3)to divert the securities the buying or selling of which has been entrusted by the client or divert the funds in the account of the client to other purposes; (4)to buy or sell the securities in the account of the client without permission or to buy or sell securities usurping the name of the client; (5)to induce the client to engage in unnecessary buying or selling of securities to seek commission; and (6)other acts of harming the interests of the client in other indications contrary to the true intentions of the client. Article 74 A legal person shall, in securities trading, be prohibited from opening an account in his/her/its name for the buying and selling of securities. Article 75 Anyone shall, in securities trading, be prohibited from diverting public money to buy and sell securities. Article 76 State-owned enterprises and holding enterprises of state owned assets must not scalp stocks listed for trading. Article 77 Securities exchanges, security companies, securities registration and settlement agencies, securities trading services agencies, intermediary agencies of society and their employees shall report to securities supervision and administration institutions in time on the prohibited trading acts uncovered in securities trading. Chapter IV Listed Company Acquisition Article 78 Listed company acquisition may take the form of acquisition by offer or acquisition by agreement. Article 79 When an investor holds 5% of the shares issued by a listed company through securities trading at a securities exchange, he/she/it shall, within 3 days starting from the date of occurrence of the said fact, submit a report in writing to the securities supervision and administration institution under the State Council and the securities exchange, inform the listed company and make an announcement thereof; the investor shall not, within the above-mentioned specified time limit, buy or sell the stocks of the said listed company anymore. When the percentage of stocks issued by the said listed company held by the investor increases or decreases by every 5% through securities trading at a securities exchange after the investor holding 5% of the stocks issued by a listed company, he/she/it shall submit a report and make an announcement thereof pursuant to the provisions of the preceding paragraph. The investor shall not, within the time limit of reporting and within two days of making the report and announcement, buy or sell the stocks of the said listed company anymore. Article 80 The report and announcement in writing to be made pursuant to the provisions of the preceding paragraph should contain the following contents: (1)name and residence of the stockholder; (2)name and amount of stocks held; and (3)date of the stocks held reaching legal percentage or the date of changes in increase or decrease of stocks held reaching legal percentage. Article 81 At the time of an investor holding 30% of the stocks issued by a listed company through securities trading at a securitied exchange, when he/she/it continues to make acquisitions, the investor should send an acquisition offer to all the stockholders of the said listed company according to law. However, where an exemption from sending an offer has been granted by the securities supervision and administration institution under the State Council is excluded. Article 82 An acquirer who sends an acquisition offer pursuant to the provisions of the preceding paragraph must submit an acquisition report on the listed company to the securities supervision and administration institution under the State Council in advance recording expressly the following particulars: (1)name and residence of the acquirer; (2)decision on acquisition by the acquirer; (3)name of the listed company to be acquired; (4)purpose of acquisition; (5)detailed names of the stocks to be acquired and the amount of shares to be acquired pre-determined; (6)time limit of acquisition and price of acquisition; (7)amount of fund required and fund guarantee for the acquisition; and (8)percentage of number of shares of the company to be acquired held in the total number of shares issued by the said company at the time of submission of the acquisition report on the listed company. The acquirer shall also submit simultaneously the company acquisition report prescribed in the preceding paragraph to the securities exchange. Article 83 The acquirer shall, after 15 days starting from the date of submission of the listed company acquisition report pursuant to the provisions of the preceding paragraph, announce his/her/its acquisition offer. The time limit for the acquisition offer must not be less than 30 days and must not be more than 60 days. Article 84 The acquirer must not, within the time of validity of the acquisition offer, withdraw his/her/its acquisition offer. The acquirer who needs to effect changes in the particulars in the acquisition offer within the period of validity of the acquisition offer must submit a report in advance to the securities supervision and administration institution under the State Council and the securities exchange and make an announcement thereof on approval. Article 85 Various conditions for acquisition put forth in the acquisition offer shall be applicable to all the stockholders of the company to be acquired. Article 86 When the shares of the company to be acquired held by the acquirer reach over 75% of the total number of shares issued by the said company at the expiration of the period of the acquisition offer, listing for trading of the stocks of the said listed company should be terminated at the securities exchanges. Article 87 When the shares of the company to be acquired held by the acquirer reach over 90% of the total number of shares issued by the said company at the expiration of the acquisition offer, the remaining stockholders still holding the stocks of the company to be acquired have the right to sell their stocks to the acquirer on equal terms specified in the acquisition offer and the acquirer should acquire them. The company acquired which is no longer qualified for the requirements specified in the Company Law upon completion of the act of acquisition should effect a change in its enterprise form. Article 88 Where the form of acquisition by offer is adopted, the acquirer must not, within the period of the acquisition offer, buy or sell the stocks of the company to be acquired in forms other than those specified in the offer and on terms beyond those of the offer. Article 89 Where the from of acquisition by agreement is adopted, the acquirer may, pursuant to the provisions of laws and regulations, effect transfer of stockholders' right with the stockholders of the company to be acquired in the form of an agreement. Where the form of acquisition of listed company by agreement is adopted, the acquirer must, within 3 days upon conclusion of the agreement, submit a report in writing on the acquisition agreement to the securities supervision and administration institution under the State Council and make an announcement thereof. The acquisition agreement shall not be implemented prior to the announcement. Article 90 Where the form of acquisition by agreement is adopted, both parties to the agreement may temporarily entrust a securities registration and settlement agency for the safekeeping of the stocks transferred by agreement, and deposit the fund in a designated bank. Article 91 The acquirer must not, in the acquisition of a listed company, transfer the stocks of the listed company to be acquired held by him/her/it within 6 months upon completion of the act of acquisition. Article 92 Where the stocks of the company acquired are obtained through the form of acquisition by offer or acquisition by agreement and the said company has been disbanded that falls into company merger, the original stocks of the disbanded company shall be exchanged by the acquirer according to law. Article 93 The acquirer should, upon conclusion of the act of acquisition of a listed company, submit a report on the acquisition to the securities supervision and administration institution under the State Council and the securities exchanges, and make an announcement thereof. Article 94 Where the shares held by an investment agency authorized by the state are involved in the acquisition of a listed company, it shall be subject to the approval of the competent department concerned pursuant to the provisions of the State Council. |
