|
Securities Law of the People's Republic of China
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;
(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.
Article 15 The funds as raised through public offer of stocks as
made by a company shall be used according to the　ion 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.The
funds as raised through public offer of stocks as made by a company
shall be used according to the　purpose as prescribed in the
prospectus. Any alteration of the use of funds as prescribed in the
prospectus shall be subject to a resolution of the general assembly
of shareholders. In case a company fails to correct any unlawful
alteration of its use of funds or where any alteration of its use of
funds fails to be adopted by the general assembly of shareholders,
the relevant company may not make any IPO of stocks. In the
foregoing circumstance, a listed company may not make any non-public
offer of stocks.
Article 16 A public issuance of corporate bonds shall satisfy the
following requirements:
(1) The net asset of a stock-limited company being no less than RMB
30 million yuan and the net asset of a limited-liability company
being no less than RMB 60 million yuan;
(2) The accumulated bond balance constituting no more than 40 % of
the net asset of a company;
(3) The average distributable profits over the latest 3 years being
sufficient to pay the 1-year interests of corporate bonds;
(4) The investment of raised funds complying with the industrial
policies of the state;
(5) The yield rate of bonds not surpassing the level of interest
rate as qualified by the State Council; and
(6) Meeting any other requirements as prescribed by the State
Council. The funds as raised through public issuance of corporate
bonds shall be used for the purpose as verified and may not be used
for covering any deficit or non-production expenditure. The public
issuance of convertible corporate bonds as made by a listed company
may not only meet the requirements as provided for in paragraph 1
herein but also meet the requirements of the present Law on public
offer of stocks, and shall be reported to the securities regulatory
authority under the State Council for examination and approval.
Article 17 With regard to an application for public issuance of
corporate bonds, the following documents shall be reported to the
department as authorized by the State Council or the securities
regulatory authority under the State Council:
(1) The business license of the company;
(2) The constitution of the company;
(3) The procedures for issuing corporate bonds;
(4) An assent appraisal report and an asset verification report; and
(5) Any other document as prescribed by the department as authorized
by the State Council or by the securities regulatory authority under
the State Council. 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.
Article 18 In any of the following circumstances, no more public
issuance of corporate bonds may be carried out:
(1) Where the corporate bonds as issued in the previous public
issuance haven't been fully subscribed;
(2) Where a company has any default on corporate bonds as publicly
issued or on any other liabilities, or postpones the payment of the
relevant principal plus interests, and such situation is still
continuing; or
(3) Where a company violates the present Law by altering the use of
funds as raised through public issuance of corporate bonds.
Article 19 The formats and reporting ways of application documents
as reported by an issuer for examination and approval of securities
issuance according to law shall be prescribed by the legally
competent organ or department in charge of examination and approval.
Article 20 The application documents for securities issuance as
reported by an issuer to the securities regulatory authority under
the State Council or the department as authorized by the State
Council shall be authentic, accurate and integrate. A securities
trading service institution and its staff that produces the relevant
documents for securities issuance shall strictly perform its/his
statutory duties and functions and guarantee the authenticity,
accuracy and integrity of the documents as produced thereby.
Article 21 Where an issuer files an application for an IPO of
stocks, it shall, upon submitting the application documents,
disclose the relevant application documents in advance according to
the provisions of the securities regulatory authority under the
State Council.
Article 22 The securities regulatory authority under the State
Council shall establish an issuance examination committee, which
shall examine the applications for stock issuance according to law.
The issuance examination committee shall be composed of the
professionals from the securities regulatory authority under the
State Council and other relevant experts from outside the said
authority, adopt the means of voting for the determination of
applications for stock issuance and set forth the opinions on
examination. The specific formulation measures, tenure of members as
well as work procedures of the issuance examination committee shall
be formulated by the securities regulatory authority under the State
Council.
Article 23 The securities regulatory authority under the State
Council shall take charge of the examination and approval of
applications for stock issuance in light of the statutory
requirements. The procedures for examination and approval shall be
publicized and shall be subject to supervision according to law. The
personnel participating in the examination and verification of stock
issuance may not have any interest relationship with an issuance
applicant, may not directly or indirectly accept any present of the
issuance applicant, may not hold any stock as verified for issuance
and may not have any private contact with an issuance applicant. The
department as authorized by the State Council shall conduct the
examination and approval of applications for issuance of corporate
bonds by referring to the preceding 2 paragraphs herein.
Article 24 The securities regulatory authority under the State
Council or the department as authorized by the State Council shall,
within 3 months as of acceptance of an application for securities
issuance, make an decision on approval or disapproval according to
the statutory requirements and procedures, whereby the time for an
issuer to supplement or correct its application documents for
issuance according to the relevant requirements may not be
calculated within the aforesaid term for examination and approval.
In the event of disapproval, an explanation shall be given in
writing.
Article 25 Where an application for securities issuance has been
approved, the relevant issuer shall, in accordance with the
provisions of the relevant laws and administrative regulations,
announce the relevant financing documents of public issuance before
publicly issuing any securities and shall make the aforesaid
documents available for public reference in designated places.
Before the information of securities issuance is publicized
according to law, no insider may publicize or indulge the relevant
information. An issuer may not issue any securities before an
announcement of the relevant financial documents of public issuance.
Article 26 The securities regulatory authority under the State
council or the department as authorized by the State Council shall,
where finding any decision on approving securities issuance fails to
comply with the relevant statutory requirements and procedures and
if the relevant securities haven't been issued, revoke the decision
on approval and terminate the issuance. As to any securities that
have been issued but haven't been listed, the relevant decision on
approval for issuance shall be revoked. The relevant issuer shall,
according to the issuing price plus interests as calculated at the
bank deposit rate for the corresponding period of time, return the
funds to securities holders. A recommendation party shall bear the
joint and several liabilities together with the relevant issuer,
except for one who is able to prove his exemption of fault. Where
any controlling shareholder or actual controller has any fault, he
shall bear the joint and several liabilities together with the
relevant issuer,
Article 27 After a legal offer of stocks, an issuer shall be liable
for any alteration of its operation or its profits by itself. The
investment risk as incurred therefrom shall be borne by investors by
themselves.
Article 28 Where an issuer issues any securities to any
non-specified object and if the said securities shall be
underwritten by a securities company, as is provided for by laws and
administrative regulations, the issuer shall conclude an
underwriting agreement with a securities company. The forms of "sale
by proxy" and "exclusive sale" shall be adopted for the underwriting
operation of securities. The term "sale by proxy" refers to an
underwriting form, whereby a securities company sells securities as
a proxy of the relevant issuer and, upon the conclusion of the
underwriting period, returns all the securities unsold to the
relevant issuer. The term "exclusive sale" refers to an underwriting
form, whereby a securities company purchases all of the securities
of an issuer according to the agreement there between or purchases
all of the residing unsold securities by itself upon the conclusion
of the underwriting period.
Article 29 An issuer that makes public issuance of securities has
the right to select a securities company for underwriting according
to law at its own will. A securities company may not canvass any
securities underwriting business by any unjust competition means.
Article 30 Where a securities company underwrites any securities, it
shall reach an agreement with the relevant issuer on sale by proxy
or exclusive sale, which shall indicate the following items:
(1) The name, domicile as well as the name of the legal
representative of the parties concerned;
(2) The classes, quantity, amount as well as issuing prices of the
securities under sale by proxy or exclusive sale;
(3) The term of sale by proxy or exclusive sale as well as the
start-stop date;
(4) The means and date of payment for sale by proxy or exclusive
sale;
(5) The expenses for and settlement methods of sale by proxy or
exclusive sale;
(6) The liabilities of breach; and
(7) Any other matter as prescribed by the securities regulatory
authority under the State Council.
Article 31 A securities company that is engaged in the underwriting
of securities shall carry out verification on the authenticity,
accuracy and integrity of the financing documents of public
issuance. Where any false record, misleading statement or major
omission is found, no sales activity may be carried out. Where any
securities have been sold out under the foregoing circumstances, the
relevant sales activity shall be immediately terminated and measures
for correction shall be taken.
Article 32 Where the total face value of securities as issued to
non-specified objects is beyond RMB 50 million yuan, the said
securities shall be underwritten by an underwriting syndicate. An
underwriting syndicate shall be composed of securities companies
acting as principal underwriters and participant underwriters.
Article 33 The term for sale by proxy or exclusive sale may not
exceed 90 days at the most. A securities company shall, within the
term of sale by proxy or exclusive sale, guarantee the priority of
the relevant subscribers in purchasing securities under sale by
proxy or exclusive sale. A securities company may not reserve in
advance any securities under sale by proxy thereby or purchase in
advance and sustain any securities under exclusive sale thereby.
Article 34 Where any stock is issued at a premium, the issuing price
thereof shall be agreed on through negotiation of the relevant
issuer and the securities company that is engaged in underwriting.
Article 35 As to a public offer of stocks through sale by proxy,
when the term of sale by proxy expires and if the quantity of stocks
fails to reach 70 % of the planned quantity in a public offer, it
shall be deemed as a failure. The relevant issuer shall return the
issuing price plus interests as calculated at the bank deposit rate
for the contemporary period of time to the subscribers of stocks.
Article 36 In a public offer of stocks, when the term for sale by
proxy or exclusive sale expires, an issuer shall report the
information on stock issuance to the securities regulatory authority
under the State Council for archival purpose within the prescribed
time.
Chapter III Transaction of Securities
Section I General Provisions
Article 37 The securities as purchased and sold by any party who is
involved in any securities transaction shall be the securities that
have been legally issued and delivered. No securities that have been
illegally issued may be purchased or sold.
Article 38 All stocks, corporate bonds or any other securities that
have been legally issued, where there are any restrictive provisions
of laws on the term of transfer thereof, may not be purchased or
sold within the restrictive term.
Article 39 All stocks, corporate bonds or any other securities that
have been publicly issued according to law shall be listed in a
stock exchange as legally established or in any other places for
securities transaction as approved by the State Council.
Article 40 The means of public and centralized transaction or any
other means as approval by the securities regulatory authority under
the State Council shall be adopted for listed trading of securities
in stock exchanges.
Article 41 The securities as purchased or sold by the parties
involved in securities transaction may be in paper form or in any
other form as approved by the securities regulatory authority under
the State Council.
Article 42 The securities transaction shall be carried out in the
form of spot goods as well as any other form as prescribed by the
State Council.
Article 43 The practitioners in stock exchanges, securities
companies as well as securities registration and clearing
institutions, the functionary of securities regulatory bodies as
well as any other personnel who have been prohibited by laws and
administrative regulations from engaging in any stock transaction
shall, within their tenures or the relevant statutory term, not hold
or purchase or sold any stock directly or in any assumed name or in
a name of any other person, nor may they accept any stocks from any
other person as a present. Anyone, when becoming any person as
prescribed in the preceding paragraph herein, shall transfer the
stocks he has held according to law.
Article 44 The stock exchanges, securities companies as well as
securities registration and clearing institutions shall keep secret
for the accounts as opened for their clients according to law.
Article 45 A securities trading service institution and the relevant
personnel that produce such documents as auditing reports, asset
appraisal reports or legal opinions for stock issuance may not
purchase or sell any of the aforesaid stocks within the underwriting
term of stocks or within 6 months as of the expiration of the
underwriting term of stocks.Except for the provisions as prescribed
in the preceding paragraph herein, a securities trading service
institutions and the relevant personnel that produce such documents
as auditing reports, asset appraisal reports or legal opinions for
listed companies may not purchase or sell any of the aforesaid
stocks within the period from the day when an entrustment of a
listed company is accepted to the day when the aforesaid documents
are publicized.
Article 46 The charge for securities transaction shall be
reasonable. The charging items, standards as well as methods shall
be publicized. The charging items, standards and administrative
measures of securities transaction shall be uniformly formulated by
the relevant administrative department under the State Council.
Article 47 Where any director, supervisor and senior manager of a
listed company or any shareholder who holds more than 5% of the
shares of a listed company, sells the stocks of the company as held
within 6 months after purchase, or purchases any stock as sold
within 6 months thereafter, the proceeds generated therefrom shall
be incorporated into the profits of the relevant company. The board
of directors of the company shall withdraw the proceeds. However,
where a securities company holds more than 5% of the shares of a
listed company, which are the residing stocks after sale by proxy as
purchased thereby, the sale of the foregoing stocks may not be
limited by a term of 6 months. Where the board of directors of a
company fails to implement the provisions as prescribed in the
preceding paragraph herein, the shareholders concerned have the
right to require the board of directors to implement them within 30
days. Where the board of directors of a company fails to implement
them within the aforesaid term, the shareholders have the right to
directly file a litigation with the people's court in their own
names for the interests of the company. Where the board of directors
of a company fail to implement the provisions as prescribed in
paragraph 1herein, the directors in charge shall bear the joint and
several liabilities according to law.
Section II Listing of Securities
Article 48 An application for the listing of any securities shall be
filed with a stock exchange and shall be subject to the examination
and approval of the stock exchange according to law and a listing
agreement shall be reached by both parties. The stock exchanges
shall, according to the decision of the department as authorized by
the State Council, arrange the listing of government bonds.
Article 49 As for an application for the listing of any stocks,
convertible corporate bonds or any other securities, to which a
recommendation system is applied, as prescribed by laws and
administrative regulations, an institution with the qualification of
recommendation shall be employed as the recommendation party. The
provisions of paragraphs 2 and 3 of Article 11 of the present Law
shall be applied to the recommendation party of listing.
Article 50 A stock-limited company that files an application for the
listing of its stocks shall satisfy the following requirements:
(1) The stocks shall have been subject to the examination and
approval of the securities regulatory authority under the State
Council and shall have been publicly issued;
(2) The total amount of capital stock shall be no less than RMB 30
million yuan;
(3) The shares as publicly issued shall reach more than 25 % of the
total amount of corporate shares; where the total amount of capital
stock of a company exceeds RMB 0.4 billion yuan, the shares as
publicly issued shall be no less than 10% thereof; and
(4) The company may not have any major irregularity over the latest
years and there is no false record in its financial statements. A
stock exchange may prescribe the requirements of listing that are
more strict than those as prescribed in the preceding paragraph
herein, which shall be reported to the securities regulatory
authority under the State Council for approval.
Art icle 51 The state encourages the listing of corporate stocks
that comply with the relevant industrial policies and fulfill the
relevant requirements of listing.
Article 52 With regard to an application for the listing of stocks,
the following documents shall be reported to a stock exchange:
(1) The listing report;
(2) The resolution of the general assembly of shareholders regarding
the application for the listing
of stocks;
(3) The constitution of the company;
(4) The business license of the company;
(5) The financial statements of the company for the latest years as
audited by an accounting firm according to law;
(6) The legal opinions as well as the Recommendation Letter of
Listing;
(7) The latest prospectus; and
(8) Any other document as prescribed by the listing rules of the
stock exchange.
Article 53 Where an application for the listing of stocks has been
subject to the examination and approval of a stock exchange, the
relevant company that has reached a listing agreement thereon shall
announce the relevant documents for stock listing within the
prescribed period and shall make the said documents available for
public reference in designated places.
Article 54 A company that has reached a listing agreement may not
only announce the documents as prescribed in the preceding Article
herein but also announce the following items:
(1) The date when the stocks have been approved to be listed in a
stock exchange;
(2) The name list of the top 10 shareholders who hold the largest
number of shares in the company as well as the amount of stocks as
held thereby;
(3) The actual controller of the company; and
(4) The names of the directors, supervisors and senior managers of
the company as well as the relevant information on the stocks and
bonds of the company as held thereby.
Article 55 Where a listed company is in any of the following
circumstances, the stock exchange shall decide to suspend the
listing of its stocks:
(1) Where the total amount of capital stock or share distribution of
the company changes and thus, fails to meet the requirements of
listing;
(2) Where the company fails to publicize its financial status
according to the relevant provisions or has any false record in its
financial statements, which may mislead the investors;
(3) Where the company has any major irregularity;
(4) Where the company has been operating at a loss for the latest 3
consecutive year; or
(5) Under any other circumstance as prescribed in the listing rules
of the stock exchange.
Article 56 Where a listed company is in any of the following
circumstances, the stock exchange shall decide to terminate the
listing of its stocks:
(1) Where the total amount of capital stock or share distribution of
the company changes and thus, fails to meet the requirements of
listing, and where the company fails again to meet the requirements
of listing within the period as prescribed by the stock exchange;
(2) Where the company fails to publicize its financial status
according to the relevant provisions or has any false record in its
financial statements, and refuses to make any correction;
(3) Where the company has been operating at a loss for the latest 3
consecutive years and fails to gain profits in the year thereafter;
(4) Where the company is dissolved or is announce bankruptcy; or
(5) Under any other circumstance as prescribed in the listing rules
of the stock exchange.
Article 57 A company shall, when applying for the listing of
corporate bonds, fulfill the following requirements:
(1) The term of corporate bonds shall be more than 1 year;
(2) The amount of corporate bonds to be actually issued shall be no
less than RMB 50 million yuan; and
(3) The company shall meet the statutory requirements for the
issuance of corporate bonds when applying for the listing of its
bonds.
Article 58 A company shall, when filing an application for the
listing of its corporate bonds, report the following documents to a
stock exchange:
(1) The listing report;
(2) The resolution as adopted by the board of directors regarding
the application for listing;
(3) The constitution of the company;
(4) The business license of the company;
(5) The measures for financing through the issuance of corporate
bonds;
(6) The amount of corporate bonds to be actually issued; and
(7) Any other document as prescribed in the listing rules of the
stock exchange. With regard to an application for the listing of
convertible corporate bonds, the Recommendation Letter of Listing as
produced by the relevant recommendation party shall be reported.
Article 59 Where an application for the listing of corporate bonds
has been subject to the examination and approval of the stock
exchange, the company that has reached a listing agreement thereon
shall, within the prescribed period, announce its report on the
listing of its corporate bonds as well as the relevant documents and
make its application documents available for public reference in
designated places.
Article 60 After any corporate bonds are listed, where the relevant
company is in any of the following circumstances, the stock exchange
may decide to suspend the listing of its corporate bonds:
(1) Where the company has any major irregularity;
(2) Where the company has any major change and thus fails to meet
the requirements for the listing of corporate bonds;
(3) Where the funds as raised through the issuance of corporate
bonds fail to be used according to the purpose as verified;
(4) Where the company fails to perform its obligations according to
the measures for financing through the issuance of corporate bonds;
or
(5) Where the company has been operating at a loss for the latest 2
consecutive years.
Article 61 Where a company is in any of the circumstances as
described in item (1) or (4) of the preceding Article herein and the
consequences as incurred therefrom have been verified to be serious,
or where a company is under any of the circumstances as described in
any of item (2), (3), or (5) of the preceding Article herein and
fails to eliminate the relevant consequence within a specified time
limit, the stock exchange shall decide to terminate the listing of
corporate bonds of the company. In case a company is dissolved or
declared bankrupt, the stock exchange shall terminate the listing of
corporate bonds thereof.
Article 62 Any company, which is dissatisfied with a decision of a
stock exchange on disapproving, suspending or terminating its
listing, may file an application for a review with the review organ
established by the stock exchange.
Section III On-going Information Disclosure
Article 63 The information as disclosed by issuers and listed
companies according to law shall be authentic, accurate and
integrate and may not have any false record, misleading statement or
major omission.
Article 64 As for the stocks that have been publicly issued upon the
verification of the securities regulatory authority under the State
Council or for the corporate bonds that have been publicly issued
upon the verification of the department as authorized by the State
Council according to law, the prospectus or the measures for
financing through the issuance of corporate bonds shall be
announced. In an IPO of stocks or corporate bonds, the relevant
financial statements shall be announced as well.
Article 65 A company whose shares or bonds have been listed for
trading shall, within two months as of the end of the first half of
each accounting year, submit to the securities regulatory authority
under the State Council and the stock exchange a midterm report
indicating the following contents and announce it:
(1) The financial statements and business situation of the company;
(2) The major litigation involving the company;
(3) The particulars of any change concerning the shares or corporate
bonds thereof as already issued;
(4) The important matters as submitted to the general assembly of
shareholders for deliberation; and
(5) Any other matter as prescribed by the securities regulatory
authority under the State Council.
Article 66 A listed company whose shares or bonds have been listed
for trading shall, within four months as of the end of each
accounting year, submit to the securities regulatory authority under
the State Council and the stock exchange an annual report indicating
the following contents, and announce it:
(1) A brief account of the company's general situation;
(2) The financial statement and business situation of the company;
(3) A brief introduction to the directors, supervisors, and senior
managers of the company well as the information regarding their
shareholdings;
(4) The information on shares and corporate bonds as already issued,
including the name list of the top 10 shareholders who hold the
largest numbers of shares in the company as well as the amount of
shares as held thereby;
(5) The actual controller of the company; and
(6) Any other matter as prescribed by the securities regulatory
authority under the State Council.
Article 67 In the event of a major event that may considerably
affect the trading price of a listed company's shares and that is
not yet known to the investors, the listed company shall immediately
submit a temporary report regarding the said major event to the
securities regulatory authority under the State Council and the
stock exchange and make an announcement to the general public as
well, in which the cause, present situation and possible legal
consequence of the event shall be indicated: The term "major event"
as mentioned in the preceding paragraph herein refers to the
following circumstances:
(1) A major change in the business guidelines or business scope of
the company;
(2) A decision of the company on any major investment or major asset
purchase;
(3) An important contract as concluded by the company, which may
have an important effect on the assets, liabilities, rights,
interests or business achievements of the company;
(4) Any incurrence of a major debt in the company or default on an
overdue major debt;
(5) Any incurrence of a major deficit or a major loss in the
company;
(6) A major change in the external conditions for the business
operation of the company;
(7) A change concerning directors, no less than one-third of
supervisors or managers of the company;
(8) A considerable change in the holdings of shareholders or actual
controllers who each hold or control no less than 5% of the
company's shares;
(9) A decision of the company on capital decrease, merger, division,
dissolution, or application for bankruptcy;
(10) Any major litigation involving the company, or where the
resolution of the general assembly of shareholders or the board of
directors have been cancelled or announced invalid;
(11) Where the company is involved in any crime, which has been
filed as a case as well as investigated into by the judicial organ
or where any director, supervisor or senior manager of the company
is subject to compulsory measures as rendered by the judicial organ;
or
(12) Any other matter as prescribed by the securities regulatory
authority under the State Council.
Article 68 The directors and senor managers of a listed company
shall subscribe their opinions for recognition in the periodic
report of their company in written form. The board of supervisors of
a listed company shall carry out an examination on the periodic
report of its company as formulated by the board of directors and
produce the relevant examination opinions in writing. The directors,
supervisors and senior managers of a listed company shall guarantee
the authenticity, accuracy and integrity of the information as
disclosed by their listed company.
Article 69 Where the prospectus, measures for financing through
issuance of corporate bonds, financial statement, listing report,
annual report, midterm report, temporary report or any information
as disclosed that has been announced by an issuer or a listed
company has any false record, misleading statement or major
omission, and thus incurs losses to investors in the process of
securities trading, the issuer or the listed company shall be
subject to the liabilities of compensation. Any director,
supervisor, senior manager or any other person of the issuer or the
listed company directly responsible shall be subject to the joint
and several liabilities of compensation, except for anyone who is
able to prove his exemption of any fault. Where any shareholder or
actual controller of an issuer or a listed company has any fault, he
shall be subject to the joint and several liabilities of
compensation together with the relevant issuer or listed company.
Article 70 The information as prescribed by law to be disclosed
shall be publicized through the media as designated by the
securities regulatory authority under the State Council and shall,
at the same time, be made available for public reference at the
company's domicile and a stock exchange.
Article 71 The securities regulatory authority under the State
Council shall carry out supervision over annual reports, midterm
reports, temporary reports of listed companies as well as their
announcements, over the distribution or rationing of new shares of
such listed companies and over the controlling shareholders and any
other obligor of information disclosure of listed companies. The
securities regulatory body, stock exchange, recommendation party or
securities company involving in underwriting as well as the re |