Article 167 A securities registration and clearing institution shall, when
providing the netting service for a stock exchange, require the relevant
clearing participant to deliver securities and funds in full amount and provide
the guaranty of delivery according to the principles of delivery versus payment
(DVP). Before a delivery is concluded, nobody may use the securities, funds or
collaterals as involved in the delivery. Where a clearing participant fails to
perform the duty of delivery according to the schedule, a securities
registration and clearing institution has the right to dispose the properties as
prescribed in the preceding paragraph herein according to the operational
rules.
Article 168 The clearing funds and securities as collected by a securities
registration and clearing institution according to the operational rules shall
be deposited into a special account for settlement and delivery. The settlement
and delivery that can only be applied to the securities trading as concluded
according to the operational rules may not be enforced
compulsorily.
Chapter VIII Securities Trading Service
Institutions
Article 169 Where an investment consulting institution, financial advising
institution, credit rating institution, asset appraisal institution or
accounting firm engages in any securities trading service, it shall be subject
to the approval of the securities regulatory authority under the State Council
and the relevant administrative departments. The measures for the administration
of examination and approval of the practice of securities trading services, in
which an investment consulting institution, financial advising institution,
credit rating institution, asset appraisal institution or accounting firm
engages, shall be formulated by the securities regulatory authority under the
State Council and the relevant administrative departments.
Article 170 The staff of an investment consulting institution, financial
advising institution or credit rating institution who engage in securities
trading service shall have the special knowledge of securities as well as work
experience on securities business or securities trading service for more than 2
years. The standards for recognizing the securities practice qualification and
the measures for administration thereof shall be formulated by the securities
regulatory authority under the State Council.
Article 171 An investment consulting institution as well as its practitioners
that engage in securities trading services may not have any of the following
acts:
(1) Engaging in any securities investment as an agent on the
behalf of its entrusting party;
(2) Concluding any agreement with an
entrusting party on sharing the gains of securities investment or bearing the
loss of securities investment;
(3) Purchasing or selling any stock of a
listed company, for which the consulting institution provides
services;
(4) Providing or disseminating any false or misleading
information to investors through media or by any other means; or
(5)
Having any other act as prohibited by any law or administrative regulation. Any
institution or person that has any of the acts as prescribed in the preceding
paragraph herein and thus incurs any loss to investors shall be subject to the
liabilities of compensation.
Article 172 An investment consulting institution or credit rating institution
that engages in securities trading services shall, according to the standards of
or measures for charging as formulated by the relevant administrative department
of the State Council, charge the relevant service commissions.
Article 173 Where a securities trading service institution formulates and
generates any auditing report, asset appraisal report, financial advising
report, credit rating report or legal opinions for the issuance, listing and
trading of securities, it shall be diligent and responsible by carrying out
examination and verification for the authenticity, accuracy and integrity of the
contents of the documents as formulated and generated. In the case of any false
record, misleading statement or major omission in the documents as formulated
and generated, which incurs any loss to any other person, the relevant
securities trading service institution shall bear the joint and several
liabilities together with the relevant issuer and listed company, unless a
securities trading service institution has the ability to prove its exemption of
fault.
Chapter IX Securities Industry Association
Article 174 The securities industry association is a self-regulating
organization for the securities industry and is a public organization with the
status of a legal person. A securities company shall join the securities
industrial association. The power organ of the securities industrial association
is the general assembly of its members.
Article 175 The constitution of the securities industrial association shall
be formulated by the general assembly of its members and shall be report to the
securities regulatory authority under the State Council for archival
purpose.
Article 176 The securities industrial association shall perform the following
functions and duties:
(1) Educating and organizing its members to
observe the laws and administrative regulations on securities;
(2)
Safeguarding the legitimate rights and interests of its members and reporting
the suggestions and requirements of its members to the securities regulatory
body;
(3) Collecting and straightening out the securities information
and providing services for its members;
(4) Formulating the rules that
shall be observed by its members, organizing the vocational training for the
practitioners of its member entities and carrying out vocational exchange
between its members;
(5) Holding mediation over any dispute regarding
securities operation between its members or between its members and
clients;
(6) Organizing its members to make research on the
development, operation and the relevant contents of the securities
industry;
(7) Supervising and examining the acts of its members and,
according to the relevant provisions, giving a disciplinary sanction to any
member that violates any law or administrative regulation or the constitution of
the association; and
(8) Performing any other function and duty as
stipulated by the constitution of the industrial association.
Article 177 A council shall be established within the securities industrial
association. The members of the council shall be selected through election
according to the provisions of the constitution.
Chapter X Securities Regulatory Bodies
Article 178 The securities regulatory authority under the State Council shall
carry out supervision and administration of the securities market according to
law so as to preserve the order of the securities market and guarantee the
legitimate operation thereof.
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