(Adopted at the 6th Meeting of the Standing
Committee of the 9th National People's Congress on December 29, 1998, revised at
the 18th Meeting of the Standing Committee of the Tenth National People's
Congress of the People's Republic of China on October 27, 2005 according to the
Decision on Revising the Securities Law of the People's Republic of China as
made at the 11th meeting of the Standing Committee of the 10th People's Congress
on August 28, 2004)
Chapter I General Provisions
Article 1 The present Law is formulated for the purpose of regulating the
issuance and transaction of securities, protecting the lawful rights and
interests of investors, safeguarding the economic order and public interests of
the society and promoting the growth of the socialist market economy.
Article 2 The present Law shall be applied to the issuance and transaction of
stocks, corporate bonds as well as any other securities as lawfully recognized
by the State Council within the territory of the People's Republic of China.
Where there is no such provision in the present Law, the provisions of the
Corporation Law of the People's Republic of China and other relevant laws and
administrative regulations shall be applied. Any listed trading of government
bonds and share of securities investment funds shall be governed by the present
Law. Where there is any special provision in any other law or administrative
regulation, the special provision shall prevail. The measures for the
administration of issuance and transaction of securities derivatives shall be
prescribed by the State Council according to the principles of the present
Law.
Article 3 The issuance and transaction of securities shall adhere to the
principles of openness, fairness and impartiality.
Article 4 The parties involved in any issuance or transaction of securities
shall have equal legal status and shall persist in the principles of free will,
compensation and integrity and creditworthy.
Article 5 The issuance and transaction of securities shall observe laws and
administrative regulations. No fraud, insider trading or manipulation of the
securities market may be permitted.
Article 6 The divided operation and management shall be adopted by the
industries of securities, banking, trust as well as insurance. The securities
companies and the business organs of banks, trust and insurance shall be
established separately, unless otherwise provided for by the state.
Article 7 The securities regulatory authority under the State Council shall
adopt a centralized and unified supervision and administration of the national
securities market. The securities regulatory authority under the State Council
may, in light of the relevant requirements, establish dispatched offices, which
shall perform their duties and functions of supervision and administration upon
the authorization.
Article 8 Under the centralized and unified supervision and administration of
the state regarding the issuance and transaction of securities, a securities
industrial association shall be lawfully established, which shall adopt the
self-regulating administration.
Article 9 The auditing organ of the state shall carry out auditing
supervision of stock exchanges, securities companies, securities registration
and clearing institutions and securities regulatory bodies.
Chapter
II Issuance of Securities
Article 10 A public issuance of securities shall satisfy the requirements of
the relevant laws and administrative regulations and shall be reported to the
securities regulatory authority under the State Council or a department upon
authorization by the State Council for examination and approval according to
law. Without any examination and approval according to law, no entity or
individual may make a public issuance of any securities. It shall be deemed as a
public issuance upon the occurrence of any of the following
circumstances:
(1) Making a public issuance of securities to
non-specified objects;
(2) Making a public issuance of securities to
accumulatively more than 200 specified objects; or
(3) Making a public
issuance as prescribed by any law or administrative regulation. For any
securities that are not issued in a public manner, the means of advertising,
public inducement or public issuance in any disguised form may not be adopted
thereto.
Article 11 An issuer that files an application for public issuance of stocks
or convertible corporate bonds by means of underwriting according to law or for
public issuance of any other securities, to which a recommendation system is
applied, as is prescribed by laws and administrative regulations, shall employ
an institution with the qualification of recommendation as its recommendation
party. A recommendation party shall abide by operational rules and industrial
norms and, on the basis of the principles of being honesty, creditworthy,
diligent and accountable, carry out a prudent examination of application
documents and information disclosure materials of its issuers as well as
supervise and urge its issuers to operate in a regulative manner. The
qualification of the recommendation party as well as the relevant measures for
administration shall be formulated by the securities regulatory authority under
the State Council.
Article 12 A public offer of stocks for establishing a stock-limited company
shall satisfy the requirements as prescribed in the Corporation Law of the
People's Republic of China as well as any other requirements as prescribed by
the securities regulatory authority under the State Council, which have been
approved by the State Council. An application for public offer of stocks as well
as the following documents shall be reported to the securities regulatory
authority under the State Council:
(1) The constitution of the
company;
(2) The promoter's agreement;
(3) The name or title
of the promoter, the amount of shares as subscribed by the promoter, the
category of contributed capital as well as the capital verification
certification;
(4) The prospectus;
(5) The name and address of
the bank that receives the funds as generated from the issuance of stocks on the
behalf of the company; and
(6) The name of the underwriting
organization as well as the relevant agreements. In case a recommendation party
shall be employed, as prescribed by the present Law, the Recommendation Letter
of Issuance as produced by the recommendation party shall be submitted as well.
In case the establishment of a company shall be reported for approval, as
prescribed by laws and administrative regulations, the relevant approval
documents shall be submitted as well.
Article 13 An initial public offer (IPO) of stocks of a company shall satisfy
the following requirements:
(1) Having a complete and well-operated
organization;
(2) Having the capability of making profits successively
and a sound financial status;
(3) Having no false record in its
financial statements over the latest 3 years and having no other major
irregularity; and
(4) Meeting any other requirements as prescribed by
the securities regulatory authority under the State Council, which has been
approved by the State Council. A listed company that makes any initial
non-public offer of stocks shall satisfy the requirements as prescribed by the
securities regulatory authority under the State Council, which have been
approved by the State Council and shall be reported to the securities regulatory
authority under the State Council for examination and approval.
Article 14 A company that makes an IPO of stocks shall apply for public offer
of stocks as well as the following documents to the securities regulatory
authority under the State Council:
(1) The business license of the
company;
(2) The constitution of the company;
(3) The
resolution of the general assemble of shareholders;
(4) The
prospectus;
(5) The financial statements;
(6) The name and
address of the bank that receives the funds as generated from the public offer
of stocks on the behalf of the company; and
(7) The name of the
underwriting institution as well as the relevant agreements. In case a
recommendation party shall be employed, as prescribed by the present Law, the
Recommendation Letter of Issuance as produced by the recommendation party shall
be submitted as well.
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