Article 74 The insiders who have access to insider information of securities
trading include:
(1) Directors, supervisors, and senior managers of an
issuer;
(2) Shareholders who hold no less than 5% of the shares in a
company as well as the directors, supervisors, and senior managers thereof, or
the actual controller of a company as well as the directors, supervisors, and
senior managers thereof;
(3) The holding company of an issuer as well
as the directors, supervisors, and senior managers thereof;
(4) The
personnel who may take advantage of their posts in their company to obtain any
insider information of the company concerning the issuance and transaction of
its securities;
(5) The functionary of the securities regulatory body,
and other personnel who administer the issuance and transaction of securities
pursuant to their statutory functions and duties;
(6) The relevant
personnel of recommendation institutions, securities companies engaging in
underwriting, stock exchanges, securities registration and clearing institutions
and securities trading service organizations; and
(7) Any other person
as prescribed by the securities regulatory authority under the State
Council.
Article 75 For the purpose of the present Law, the term "insider information"
refers to the information that concerns the business or finance of a company or
may have a major effect on the market price of the securities thereof and that
hasn't been publicized in securities trading. The following information all
falls into the scope of insider information:
(1) The major events as
prescribed in paragraph 2 of Article 62 of the present Law;
(2) The
plan of a company concerning any distribution of dividends or increase of
capital;
(3) Any major change in the company's equity
structure;
(4) Any major change in guaranty of the company's
obligation;
(5) Where the mortgaged, sold or discarded value of a major
asset as involved in the business operation of the company exceeds 30 % of the
said asset in a one-off manner;
(6) Where any act as conducted by any
director, supervisor or senior manager of the company may be rendered
liabilities of major damage and compensation;
(7) The relevant plan of
a listed company regarding acquisition; and
(8) Any other important
information that has been recognized by the securities regulatory authority
under the State Council as having a marked effect on the trading prices of
securities.
Article 76 Any insider who has access to insider information or has
unlawfully obtained any insider information on securities trading may not
purchase or sell the securities of the relevant company, or divulge such
information, or advise any other person to purchase or sell such securities.
Where there is any other provision of the present Law on governing the purchase
of shares of a listed company by a natural person, legal person or any other
organization who holds or holds with any other person not less than 5% of the
company's shares by means of an agreement or any other arrangement, it shall
prevail. Where any insider trading incurs any loss to investors, the actor shall
be subject to the liabilities of compensation according to law.
Article 77 Anyone is prohibited from manipulating the securities market by
any of the following means:
(1) Whether anyone, independently or in
collusion with others, manipulates the trading price of securities or trading
quantity of securities by centralizing the advantage in respect of funds,
shareholding advantage or utilizing information advantage to trade jointly or
continuously;
(2) Where anyone collaborates with any other person to
trade securities pursuant to the time, price and method as agreed upon in
advance, thereby affecting the price or quantity of the securities
traded;
(3) Where anyone trades securities between the accounts under
self-control, thereby affecting the price or quantity of the securities traded;
or
(4) Where anyone manipulates the securities market by any other
means. Where anyone incurs any loss to investors by manipulating the securities
market, the actor shall be subject to the liabilities of compensation according
to law.
Article 78 It is prohibited for state functionaries, practitioners of the
news media as well as other relevant personnel concerned to fabricate or
disseminate any false information, thereby seriously disturbing the securities
market. It is prohibited for stock exchanges, securities companies, securities
registration and clearing institutions, securities trading service institutions
and the practitioners thereof, as well as the securities industry association,
the securities regulatory body and their functionaries to make any false
statement or give any misleading information in the activities of securities
trading. The securities market information as disseminated by any media shall be
authentic and objective. Any dissemination of misleading information is
prohibited.
Article 79 It is prohibited for securities companies as well as their
practitioners to commit any of the following fraudulent acts in the process of
securities trading, which may injure the interests of their
clients:
(1) Violating the entrustment of its client by purchasing or
selling any securities on the behalf;
(2) Failing to provide a client
with written confirmation of a transaction within the prescribed period of
time;
(3) Misappropriating the securities as entrusted by a client for
purchase or sale, or the funds in a client's account;
(4) Unlawfully
purchasing or selling securities for its client without any authorization, or
unlawfully purchasing or selling any securities in the name of a
client;
(5) Inveigling a client into making any unnecessary purchase or
sale of securities in order to obtain commissions;
(6) Making use of
mass media or by any other means to provide or disseminate any false or
misleading information to investors; or
(7) Having any other act that
goes against the true intention as expressed by a client and damages the
interests thereof. Where anyone practices any trickery and thus incurs any loss
to the relevant clients, the actor shall be subject to the liabilities of
compensation according to law.
Article 80 It's prohibited for any legal person to unlawfully make use of any
other person's account to undertake any securities trading. It's prohibited for
any legal person to lend its or any other's securities account.
Article 81 The channel for capital to go into the stock market shall be
broadened according to law. It's prohibited for any unqualified capital to go
into the stock market.
Article 82 It's prohibited for any person to misappropriate any public fund
to trade securities.
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