股票发行与交易管理暂行条例

（一九九三年四月二十二日国务院发布施行）

第一章 总则

第一条 为了适应发展社会主义市场经济的需要，建立和发展全国统一、高效的股票市场，保护投资者的合法权益和社会公共利益，促进国民经济的发展，制定本条例。

第二条 在中华人民共和国境内从事股票发行、交易及其相关活动、必须遵守本条例。

本条例关于股票的规定适用于具有股票性质、功能的证券。

第三条 股票的发行与交易，应当遵循公开、公平和诚实信用的原则。

第四条 股票的发行与交易，应当维护社会主义公有制的主体地位，保障国有资产不受侵害。

第五条 国务院证券委员会（以下简称 "证券委"）是全国证券市场的主管机构，依照法律、法规的规定对全国证券市场进行统一管理。中国证券监督委员会（以下简称 "证监会"）是证券委的监督管理执行机构，依照法律、法规的规定对证券发行与交易的具体活动进行管理和监督。

第六条 人民币特种股票发行与交票的具体办法另行制定。

境内企业直接或者间接到境外发行股票、将其股票在境外交易，必须经证券委审批，具体办法另行制定。

第二章股票的发行

第七条 股票发行人必须是具有股票发行资格的股份有限公司。

前款所称股份有限公司，包括已经成立的股份有限公司和经批准拟成立的股份有限公司。

第八条 设立股份有限公司申请公开发行股票，应当符合下列条件：

（一） 其生产经营符合国家产业政策；
（二） 其发行的普通股限于一种，同股同权；
（三） 发起人认购的股本数额不少于公司拟发行的股本总额的百分之三十五；
（四） 在公司拟发行的股本总额中，发起人认购的部分不少于人民币三千万元，但是国家另有规定的除外；
（五） 向社会公众发行的部分不少于公司拟发行的股本总额的百分之二十五，其中公司职工认购的股本数额不得超过拟向社会公众发行的股本总额的百分之十；公司拟发行的股本总额超过人民币四亿元的，证监会按照规定可以酌情降低向社会公众发行的部分的比例，但是最低不少于公司拟发行的股本总额的百分之十；
（六） 发起人在近三年内没有重大违法行为；
（七） 证券委规定的其他条件。

第九条 原有企业改组设立股份有限公司申请公开发行股票，除应当符合本条例第八条所列条件外，还应当符合下列条件：

（一） 发行前一年末，净资产在总资产中所占比例不低于百分之三十，无形资产在净资产中所占比例不高于百分之二十，但是证券委另有规定的除外；
（二） 近三年连续盈利。

国有企业改组设立股份有限公司公开发行股票的，国家拥有的股份在公司拟发行的股本总额中所占的比例由国务院或者国务院授权的部门规定。

第十条 股份有限公司增资申请公开发行股票，除应当符合本条例第八条和第九条所列条件外，还应当符合下列条件：

（一） 前一次公开发行股票所得资金的使用与其招股说明书所述的用途相符，并且资金使用效益良好；
（二） 距前一次公开发行股票的时间不少于十二个月；
（三） 从前一次公开发行股票到本次申请期间没有重大违法行为；
（四） 证券委规定的其他条件。

第十一条 定向募集公司申请公开发行股票，除应当符合本条例第八条和第九条所列条件外，还应当符合下列条件：

（一） 定向募集所得资金的使用与其招股说明书所述的用途相符，并且资金使用效益良好；
（二） 距最近一次定向募集股份的时间不少于十二个月；
（三） 从最近一次定向募集到本次公开发行期间没有重大违法行为；
（四） 内部职工股权证按照规定范围发放，并且已交国家指定的证券机构集中托管；
（五） 证券委规定的其他条件。

第十二条 申请公开发行股票，按照下列程序办理：

（一） 申请人聘请会计师事务所、资产评估机构、律师事务所等专业性机构，对其资信、资产、财务状况进行审定、评估和就有关事项出具法律意见书后，按照隶属关系，分别向省、自治区、直辖市、计划 单列市人民政府（以下简称“地方政府”）或者中央企业主管部门提出公开发行股票的申请；
（二） 在国家下达的发行规模内，地方政府对地方企业的发行申请进行审批，中央企业主管部门在与申请人所在地地方政府协商后对中央企业的发行申请进行审批；地方政府、中央企业主管部门应当自收到发行申请之日起三十个工作日内作出审批决定，并抄报证券委；
（三） 被批准的发行申请，送证监会复审；证监会应当自收到复审申请之日起二十个工作内出具复审意见书，并将复审意见书抄报证券委；经证监会复审同意的，申请人应当向证券交易所上市委员会提出申请，经上市委员会同意接受上市，方可发行股票。

第十三条 申请公开发行股票，应当向地方政府或者中央企业主管部门报送下列文件：

（一） 申请报告；
（二） 发起人会议或者股东大会同意公开发行股票的决议；
（三） 批准设立股份有限公司的文件；
（四） 工商行政管理部门颁发的股份有限公司营业执照或者股份有限公司筹建登记证明；
（五） 公司章程或章程草案；
（六） 招股说明书；
（七） 资金运用的可行性报告；需要国家提供资金或者其他条件的固定资产投资项目，还应当提供国家有关部门同意固定资产投资立项的批准文件；
（八） 经会计师事务审计的公司近三年或者成立以来的财务报告和由二名以上注册会计师及其所在事务所签定、盖章的审计报告；
（九） 经二名以上律师及其所在事务所就有关事项签字、盖章的法律意见书；
（十） 经二名以上专业评估人员及其所在机构签字、盖章的资产评估报告，经二名以上注册会计师及其所在事务所签字、盖章的验资报告；涉及国有资产的，还应当提供国有资产管理部门出具的确认文件；
（十一） 股票发行承销方案和承销协议；
（十二） 地方政府或者中央企业主管部门要求报送的其他文件。

第十四条 被批准的发行申请送证监会复审时，除应当报送本条例第十三条所列文件外，还应当报送下列文件：

（一） 地方政府或者中央企业主管部门批准发行申请的文件；
（二） 证监会要求报送的其他文件。

第十五条 本条例第十三条所称招股说明书应当按照证监会规定的格式制作，并载明下列事项；

（一） 公司的名称、住所；
（二） 发起人、发行人简况；
（三） 筹资的目的；
（四） 公司现有股本总额，本次发行的股票种类、总额，每股的面值、售价，发行前的每股净资产值和发行结束后每股预期净资产值，发行费用和佣金；
（五） 初次发行的发起人认购股本的情况、股权结构及验资证明；
（六） 承销机构的名称、承销方式与承销数量；
（七） 发行的对象、时间、地点及股票认购和股款缴纳的方式；
（八） 所筹资金的运用计划及收益、风险预测；
（九） 公司近期发展规划和经注册会计师审核并出具审核意见的公司下一年的盈利预测文件；
（十） 重要的合同；
（十一） 涉及公司的重大诉讼事项；
（十二） 公司董事、监事名单及其简历；
（十三） 近三年或者成立以来的生产经营状况和有关业务发展的基本情况；
（十四） 经会计师事务所审计的公司近三年或者成立以来的财务报告和由二名以上注册会计师及其所在事务所签字、盖章的审计报告；
（十五） 增资发行的公司前次公开发行股票所筹资金的运用情况；
（十六） 证监会要求载明的其他事项。

第十六条 招股说明书的封面应当载明："发行人保证招股说明书的内容真实、准确、完整。政府及国家证券管理部门对本次发行所作出的任何决定，均不表明其对发行人所发行的股票的价值或者投资人的收益作出实质性判断或者保证。"

第十七条 全体发起人或者董事以及主承销商应当在招股说明书上签字，保证招股说明书没有虚假、严重误导性陈述或者重大遗漏，并保证对其承担连带责任。

第十八条 为发行人出具文件的注册会计师及其所在事务所、专业评估人员及其所在机构、律师及其所在事务所，在履行职责时，应当按照本行业公认的业务标准和道德规范，对其出具文件内容的真实性、准确性、完整性进行核查和验证。

第十九条 在获准公开发行股票前，任何人不得以任何形式泄露招股说明书的内容。在获准公开发行股票后，发行人应当在承销期开始前二个至五个工作日期间公布招股说明书。

发行人应当向认购人提供招股说明书。证券承销机构应当将招股说明书备置于营业场所，并有义务提醒认购人阅读招股说明书。

招股说明书的有效期为六个月，自招股说明书签署完毕之日起计算。招股说明书失效后，股票发行必须立即停止。

第二十条 公开发行的股票应当由证券经营机构承销。承销包括包销和代销两种方式。

发行人应当与证券经营机构签署承销协议。承销协议应当载明下列事项：

（一） 当事人的名称、住所及法定代表人的姓名；
（二） 承销方式；
（三） 承销股票的种类、数量、金额及发行价格；
（四） 承销期及起止日期；
（五） 承销付款的日期及方式；
（六） 承销费用的计算、支付方式和日期；
（七） 违约责任；
（八） 其他需要约定的事项。

证券经营机构收取承销费用的原则，由证监会确定。

第二十一条 证券经营机构承销股票，应当对招股说明书和其他有关宣传材料的真实性、准确性、完整性进行核查；发现含有虚假、严重误导性陈述或者重大遗漏的，不得发出要约邀请或者要约；已经发出的，应当立即停止销售活动，并采取相应的补救措施。

第二十二条 拟公开发行股票的面值总额超过人民币三千万元或者预期销售总金额超过人民币五千万元的，应当由承销团承销。

承销团由二个以上承销机构组成。主承销商由发行人按照公平竞争的原则，通过竟标或者协商的方式确定。主承销商应当与其他承销商签署承销团协议。

第二十三条 拟公开发行股票的面值总额超过人民币一亿元或者预期销售总金额超过人民币一亿五千万元的，承销团中的外地承销机构的数目以及总承销量中在外地销售的数量，应当占合理的比例。

前款所称外地是指发行人所在的省、自治区、直辖市以外的地区。

第二十四条 承销期不得少于十日，不得超过九十日。

在承销期内，承销机构应当尽力向认购人出售其所承销的股票，不得为本机构保留所承销的股票。

承销期满后，尚未售出的股票按照承销协议约定的包销或者代销方式分别处理。

第二十五条 承销机构或者其委托机构向社会发放股票认购申请表，不得收取高于认购申请表印制和发放成本的费用，并不得限制认购申请表发放数量。

认购数量超过拟公开发行的总量时，承销机构应当按照公平原则，采用按比例配售、按比例累退配售或者抽签等方式销售股票。采用抽签方式时，承销机构应当在规定的日期，在公证机关监督下，按照规定的程序，对所有股票认购申请表进行公开抽签，并对中签者销售股票。

除承销机构或者其委托机构外，任何单位和个人不得发放、转售股票认购申请表。

第二十六条 承销机构应当在承销期满后的十五个工作日内向证监会提交承销情况的书面报告。

第二十七条 证券经营机构在承销期结束后，将其持有的发行人的股票向发行人以外的社会公众作出要约邀请、要约或者销售，应当经证监会批准，按照规定的程序办理。

第二十八条 发行人用新股票换回其已经发行在外的股票，并且这种交换无直接或者间接的费用发生，不适用本章规定。

第三章 股票的交易

第二十九条 股票交易必须在经证券委批准可以进行股票交易的证券交易场所进行。

第三十条 股份有限公司申请其股票在证券交易所交易，应当符合下列条件：

（一） 其股票已经公开发行；
（二） 发行后的股本总额不少于人民币五千万元；
（三） 持有面值人民币一千元以上的个人股东人数不少于一千万人，个人持有的股票面值总额不少于人民币一千万元；
（四） 公司有最近三年连续盈利的记录；原有企业改组设立股份有限公司的，原企业最近三年连续盈利的记录，但是新设立的股份有限公司除外；
（五） 证券委规定的其他条件。

第三十一条 公开发行股票符合前条规定条件的股份有限公司，申请其股票在证券交易所交易、应当向证券交易所的上市委员会提出申请；上市委员会应当自收到申请之日起二十个工作日内作出审批，确定具体上市时间。审批文件报证监会备案，并抄报证券委。

第三十二条 股份有限公司申请其股票在证券交易所交易，应当向证券交易所的上市委员会送交下列文件：

（一） 申请书；
（二） 公司登记注册文件；
（三） 股票公开发行的批准文件；
（四） 经会计师事务所审计的公司近三年或者成立以来的财务报告和由二名以上的注册会计师及其所在事务所签字、盖章的审计报告；
（五） 证券交易所会员的推荐书；
（六） 最近一次的招股说明书；
（七） 证券交易所要求的其他文件。

第三十三条 股票获准在证券交易所交易后，上市公司应当公布上市公告并将本条例第三十二条所列文件予以公开。

第三十四条 上市公告的内容，除应当包括本条例第十五条规定的招股说明书的主要内容外，还应当包括下列事项：

（一） 股票获准在证券交易所交易的日期和批准文号；
（二） 股票发行情况、股权结构和最大的十名股东的名单及持股数额；
（三） 公司创立大会或者股东大会同意公司股票在证券交易所交易的决议；
（四） 董事、监事和高级管理人员简历及其持有本公司证券的情况；
（五） 公司近三年或者成立以来的经营业绩和财务状况以及下一年的盈利预测文件；
（六） 证券交易所要求载明的其他事项。

第三十五条 为上市公司出具文件的注册会计师及其所在事务所、专业评估人员及其所在机构、律师及其所在事务所，在履行职责时，应当按照本行业公认的业务标准和道德规范，对其出具文件内容的真实性、准确性、完整性进行核查和验证。

第三十六条 国家拥有的股份的转让必须经国家有关部门批准，具体办法另行规定。

国家拥有的股份的转让，不得损害国家拥有的股份的权益。

第三十七条 证券交易场所、证券保管、清算、过户、登记机构和证券经营机构，应当保证外地委托人与本地委托人享有同等待遇，不得歧视或者限制外地委托人。

第三十八条 股份有限公司的董事、监事、高级管理人员和持有公司百分之五以上有表决权股份的法人股东，将其所持有的公司股票在买入后六个月内卖出或者在卖出后六个月内买入，由此获得的利润归公司所有。

前款规定适用于持有公司百分之五以上有表决权股份的法人股东的董事、监事和高级管理人员。

第三十九条 证券业从业人员、证券业管理人员和国家规定禁止买卖股票的其他人员，不得直接或者间接持有、买卖股票，但是买卖经批准发行的投资基金证券除外。

第四十条 为股票发行出具审计报告、资产评估报告、法律意见书等文件的有关专业人员，在该股票承销期内和期满后六个月内，不得购买或者持有该股票。

为上市公司出具审计报告、资产评估报告、法律意见书等文件的有关专业人员，在其审计报告、资产评估报告、法律意见书等文件成为公开信息前，不得购买或者持有该公司的股票；成为公开信息后的五个工作日内，也不得购买该公司的股票。

第四十一条 未依照国家有关规定经过批准，股份有限公司不得购回其发行在外的股票。

第四十二条 未经证券委批准，任何人不得对股票及其指数的期权、期货进行交易。

第四十三条 任何金融机构不得为股票交易提供贷款。

第四十四条 证券经营机构不得将客户的股票借与他人或者作为担保物。

第四十五条 经批准从事证券自营、代理和投资基金管理业务中二项以上业务的证券经营机构，应当将不同业务的经营人员、资金、帐目分开。

第四章 上市公司的收购

第四十六条 任何个人不得持有一个上市公司千分之五以上的发行在外的普通股；超过的部分，由公司在征得证监会同意后，按照原买入价格和市场价格中较低的一种价格收购。但是，因公司发行在外的普通股总量减少，致使个人持有该公司千分之五以上发行在外的普通股的，超过的部分在合理期限内不予收购。

外国和香港、澳门、台湾地的个人持有的公司发行的人民币特种股票和在境外发行的股票，不受前款规定的千分之五的限制。

第四十七条 任何法人直接或者间接持有一个上市公司发行在外的普通股达到百分之五时，应当自该事实发生之日起三个工作日内，向该公司、证券交易场所和证监会作出书面报告并公告。但是，因公司发行在外的普通股总量减少，致使法人持有该公司百分之五以上发行在外的普通股的，在合理期限内不受上述限制。

任何法人持有一个上市公司百分之五以上的发行在外的普通股后，其持有该种股票的增减变化每达到该种股票发行在外总额的百之二时，应当自该事实发生之日起三个工作日，向该公司、证券交易场所和证监会作出书面报告并公告。

法人在依照前两款规定作出报告并公告之日起二个工作日内和作出报告前，不得再行直接或者间接买入或者卖出该种股票。

第四十八条 发起人以外的任何法人直接或者间接持有一个上市公司发行在外的普通股达到百分之三十时，应当自该事实发生之日起四十五个工作日内，向该公司所有股票持有人发出收购要约，按照下列价格中较高的一种价格，以货币付款方式购买股票：

（一） 在收购要约发出前十二个月内收购要约人购买该种股票所支付的最高价格；
（二） 在收购要约发出前三十个工作日内该种股票的平均市场价格。

前款持有人发出收购要约前，不得再行购买该种股票。

第四十九条 收购要约人在发出收购要约前应当向证监会作出有关收购的书面报告；在发出收购要约的同时应当向受要约人、证券交易场所提供本身情况的说明和与该要约有关的全部信息，并保证材料真实、准确、完整，不产生误导。

收购要约的有效期不得少于三十个工作日，自收购要约发出之日起计算。自收购要约发出之日起三十个工作日内，收购要约人不得撤回其收购要约。

第五十条 收购要约的全部条件适用于同种股票的所有持有人。

第五十一条 收购要约期满，收购要约人持有的普通股未达到该公司发行在外的普通股总数的百分之五十的，为收购失败；收购要约人除发出新的收购要约外，其以后每年购买的该公司发行在外的普通股，不得超过该公司发行在外的普通股总数的百分之五。

收购要约期满，收购要约人持有的普通股达到该公司发行在外的普通股总数的百分之七十五以上的，该公司应当在证券交易所终止交易。

收购要约人要约购买股票的总数低于预受要约的总数时，收购要约人应当按照比例从所有预受收购要约的受要约人中购买该股票。

收购要约期满，收购要约人持有的股票达到该公司股票总数的百分之九十时，其余股东有权以同等条件向收购要约人强制出售其股票。

第五十二条 收购要约发出后，主要要约条件改变的，收购要约人应当立即通知所有受要约人。通知可以采用新闻发布会、登报或者其他传播形式。

收购要约人在要约期内及要约期满后三十个工作日内，不得以要约规定以外的任何条件购买该种股票。

预受收购要约的受要约人有权在收购要约失效前撤回该要约的预受。

第五章 保管、清算和过户

第五十三条 股票发行采取记名式。发行人可以发行簿记券式股票，也可以发行实物券式股票。簿记券式股票名册应当由证监会指定的机构保管。实物券式股票集中保管的，也应当由证监会指定的机构保管。

第五十四条 未经股票持有人的书面同意，股票保管机构不得将该持有人的股票借与他人或者作为担保物。

第五十五条 证券清算机构应当根据方便、安全、公平的原则，制定股票清算、交割的业务规则和内部管理规则。

证券清算机构应当按照公平的原则接纳会员。

第五十六条 证券保管、清算、过户、登记机构应当接受证监会监管。

第六章 上市公司的信息披露

第五十七条 上市公司应当向证监会、证券交易场所提供下列文件：

（一） 在每个会计年度的前六个月结束后六十日内提交中期报告；
（二） 在每个会计年度结束后一百二十日内提交经注册会计师审计的年度报告。

中期报告和年度报告应当符合国家的会计制度和证监会的有关规定，由上市公司授权的董事或者经理签字，并由上市公司盖章。

第五十八条 本条例第五十七条所列中期报告应当包括下列内容：

（一） 公司财务报告；
（二） 公司管理部门对公司财务状况和经营成果的分析；
（三） 涉及公司的重大诉讼事项；
（四） 公司发行在外股票变动情况；
（五） 公司提交给有表决权的股东审议的重要事项；
（六） 证监会要求载明的其他内容。

第五十九条 本条例第五十七条所列年度报告应当包括下列内容：

（一） 公司简况；
（二） 公司的主要产品或者主要服务项目简况；
（三） 公司所在行业简况；
（四） 公司所拥有的重要的工厂、矿山、房地产等财产简况；
（五） 公司发行在外股票的情况，包括持有公司百分之五以上发行在外普通股的股东的名单及前十名最大的股东的名单；
（六） 公司股东数量；
（七） 公司董事、监事和高级管理人员简况、持股情况和报酬；
（八） 公司及其关联人一览表和简况；
（九） 公司近三年或者成立以来的财务信息摘要；
（十） 公司管理部门对公司财务状况和经营成果的分析；
（十一） 公司发行在外债券的变动情况；
（十二） 涉及公司的重大诉讼事项；
（十三） 经注册会计师审计的公司最近二个年度的比较财务报告及其附表、注释；该上市公司为控股公司的，还应当包括最近二个年度的比较合并财务报告；
（十四） 证监会要求载明的其他内容。

第六十条 发生可能对上市公司股票的市场价格产生较大影响、而投资人尚未得知的重大事件时，上市公司应当立即将有关该重大事件的报告提交证券交易场所和证监会，并向社会公布，说明事件的实质。但是，上市公司有充分理由认为向社会公布该重大事件会损害上市公司的利益，且不公布也不会导致股票市场价格重大变动的，经证券交易场所同意，可以不予公布。

前款所称重大事件包括下列情况：

（一） 公司订立重要合同，该合同可能对公司的资产、负债、权益和经营成果中的一项或者多项产生显著影响；
（二） 公司的经营政策或者经营项目发生重大变化；
（三） 公司发生重大的投资行为或者购置金额较大的长期资产的行为；
（四） 公司发生重大债务；
（五） 公司未能归还到期重大债务的违约情况；
（六） 公司发生重大经营性或者非经营性亏损；
（七） 公司资产遭受重大损失；
（八） 公司生产经营环境发生重要变化；
（九） 新颁布的法律、法规、政策、规章等，可能对公司的经营有显著影响；
（十） 董事长、百分之三十以上的董事或者总经理发生变动；
（十一） 持有公司百分之五以上的发行在外的普通股的股东，其持有该种股票的增减变化每达到该种股票发行在外总额的百分之二以上的事实；
（十二） 涉及公司的重大诉讼事项；
（十三） 公司进入清算、破产状态。

第六十一条 在任何公共传播媒介中出现的消息可能对上市公司股票的市场价格产生误导性影响时，该公司知悉后应当立即对该消息作出公开澄清。

第六十二条 上市公司的董事、监事和高级管理人员持有该公司普通股的，应当向证监会、证券交易场所和该公司报告其持股情况；持股情况发生变化的，应当自该变化发生之日起十个工作日内向证监会、证券交易场所和该公司作出报告。

前款所列人员在辞职或者离职后六个月内负有依照本条规定作出报告的义务。

第六十三条 上市公司应当将要求公布的信息刊登在证监会指定的全国性报刊上。

上市公司在依照前款规定公布信息的同时，可以在证券交易场所指定的地方报刊上公布有关信息。

第六十四条 证监会应当将上市公司及其董事、监事、高级管理人员和持有公司百分之五以上的发行在外的普通股的股东所提交的报告、公告及其他文件及时向社会公开，供投资人查阅。

证监会要求披露的全部信息均为公开信息，但是下列信息除外：

（一） 法律、法规予以保护并允许不予披露的商业秘密；
（二） 证监会在调查违法行为过程中获得的非公开信息和文件；
（三） 根据有关法律、法规规定可以不予披露的其他信息和文件；

第六十五条 股票持有人可以授权他人代理行使其同意权或者投票权。但是，任何人在征集二十五人以上的同意权或者投票权时，应当遵守证监会有关信息披露和作出报告的规定。

第六十六条 上市公司除应当向证监会、证券交易场所提交本章规定的报告、公告、信息及文件外，还应当按照证券交易场所的规定提交有关报告、公告、信息及文件，并向所有股东公开。

第六十七条 本条例第五十七条至第六十五条的规定，适用于已经公开发行股票，其股票并未在证券交易场所交易的股份有限公司。

第七章 调查和处罚

第六十八条 对违反本条例规定的单位和个人，证监会有权进行调查或者会同国家有关部门进行调查；重大的案件，由证券委组织调查。

第六十九条 证监会可以对证券经营机构的业务活动进行检查。

第七十条 股份有限公司违反本条例规定，有下列行为之一的，根据不同情况，单处或者并处警告、责令退还非法所筹股款、没收非法所得、罚款；情节严重的，停止其发行股票资格：

（一） 未经批准发行或者变相发行股票的；
（二） 以欺骗或者其他不正当手段获准发行股票或者获准其股票在证券交易场所交易的；
（三） 未按照规定方式、范围发行股票，或者在招股说明书失效后销售股票的；
（四） 未经批准购回其发行在外的股票的。

对前款所列行为负有直接责任的股份有限公司的董事、监事和高级管理人员，给予警告或者处以三万元以上三十万元以下的罚款。

第七十一条 证券经营机构违反本条例规定，有下列行为之一的，根据不同情况，单处或者并处警告、没收非法获取的股票和其他非所得、罚款；情节严重的，限制、暂停其证券经营业务或者撤销其证券经营业务许可：

（一） 未按照规定的时间、程序、方式承销股票的；
（二） 未按照规定发放股票认购申请表的；
（三） 将客户的股票借与他人或者作为担保物的；
（四） 收取不合理的佣金和其他费用的；
（五） 以客户的名义为本机构买卖股票的；
（六） 挪用客户保证金的；
（七） 在代理客户买卖股票活动中，与客户分享股票交易的利润或者分担股票交易的损失，或者向客户提供避免损失的保证的；
（八） 为股票交易提供融资的。

对前款所列行为负有责任的证券经营机构的主管人员和直接责任人员，给予警告或者处以三万元以上三十万元以下的罚款。

第七十二条 内幕人员和以不正当手段获取内幕信息的其他人员违反本条例规定，泄露内幕信息、根据内幕信息买卖股票或者向他人提出买卖股票的建议的，根据不同情况，没收非法获取的股票和其他非法所得，并处以五万元以上五十万元以下的罚款。

证券业从业人员、证券业管理人员和国家规定禁止买卖股票的其他人员违反本条例规定，直接或者间接持有、买卖股票的，除责令限期出售其持有的股票外，根据不同情况，单处或者并处警告、没收非法所得、五千元以上五万元以下的罚款。

第七十三条 会计师事务所、资产评估机构和律师事务所违反本条例规定，出具的文件有虚假、严重误导性内容或者有重大遗漏的，根据不同情况，单处或者并处警告、没收非所得、罚款；情节严重的，暂停其从事证券业务或者撤销其从事证券业务许可。

对前款所列行为负有直接责任的注册会计师、专业评估人员和律师，给予警告或者处以三万元以上三十万元以下的罚款；情节严重的，撤销其从事证券业务的资格。

第七十四条 任何单位和个人违反本条例规定，有下列行为之一的，根据不同情况，单处或者并处警告、没收非法获取的股票和其他非法所得、罚款：

（一） 在证券委批准可以进行股票交易的证券交易场所之外进行股票交易的；
（二） 在股票发行、交易过程中，作出虚假、严重误导性陈述或者遗漏重大信息的；
（三） 通过合谋或者集中资金操纵股票市场价格，或者以散布谣言等手段影响股票发行、交易的；
（四） 为制造股票的虚假价格与他人串通，不转移股票的所有权或者实际控制，虚买虚卖的；
（五） 出售或者要约出售其并不持有的股票，扰乱股票市场秩序的；
（六） 利用职权或者其他不正当手段，索取或者强行买卖股票，或者协助他人买卖股票的；
（七） 未经批准对股票及其指数的期权、期货进行交易的；
（八） 未按照规定履行有关文件和信息的报告、公开、公布义务的；
（九） 伪造、篡改或者销毁与股票发行、交易有关的业务记录、财务帐簿等文件的；
（十） 其他非法从事股票发行、交易及其相关活动的。

股份有限公司有前款所列行为，情节严重的，可以停止其发 行股票的资格；证券经营机构有前款所列行为，情节严重的，可以限制、暂停其证券经营业务或者撤销其证券经营业务许可。

第七十五条 本条例第七十条、第七十一条、第七十二条、第七十四条规定的处罚，由证券委指定的机构决定；重大的案件的处罚，报证券委决定。本条列第七十三条规定的处罚，由有关部门在各自的职权范围内决定。

第七十六条 上市公司和证券交易所或者其他证券业自律性管理组织的会员及其工作人员违反本条例规定，除依照本条例规定给予行政处罚外，由证券交易所或者其他证券业自律性管理组织根据章程或者自律准则给予制裁。

第七十七条 违反本条例规定，给他人造成损失的，应当依法承担民事赔偿责任。

第七十八条 违反本条例规定，构成犯罪的，依法追究刑事责任。

第八章 争议的仲裁

第七十九条 与股票的发行或者交易有关的争议，当事人可以按照协议的约定向仲裁机构申请调解、仲裁。

第八十条 证券经营机构之间以及证券经营机构与证券交易场所之间因股票的发行或者交易引起的争议，应当由证券委批准设立或者指定的仲裁机构调解、仲裁。

第九章 附则

第八十一条 本条例下列用语的含义：

（一） “股票”是指股份有限公司发行的、表示其股东按其持有的股份享受权益和承担义务的可转让的书面凭证。

"簿记券式股票" 是指发行人按照证监会规定的统一格式制作的、记载股东权益的书面名册。

"实物券式股票" 是指发行人在证监会指定的印制机构统一印制的书面股票。
（二） "发行在外的普通股”是指公司库存以外的普通股。
（三） “公开发行" 是指发行人通过证券经营机构向发行人以外的社会公众就发行人的股票作出的要约邀请、要约或者销售行为。
（四） "承销" 是指证券经营机构依照协议包销或者代销发行人所发行股票的行为。
（五） "承销机构" 是指以包销或者代销方式为发行人销售股票的证券经营机构。
（六） "包销" 是指承销机构在发行期结束后将未售出的股票全部买下的承销方式。
（七） "代销" 是指承销机构代理发售股票，在发行期结束后，将未售出的股票全部退还给发行人或者包销人的承销方式。
（八） "公布" 是指将本条例规定应当予以披露的文件刊载在证监会指定的报刊上的行为。
（九） "公开" 是指将本条例规定应当予以披露的文件备置于发行人及其证券承销机构的营业地和证监会，供投资人查阅的行为。
（十） "要约" 是指向特定人或者非特定人发出购买或者销售某种股票的口头的或者书面的意思表示。
（十一） "要约邀请" 是指建议他人向自己发出要约的意思表示。
（十二） "预受" 是指受要约人同意接受要约的初步意思表示，在要约期满前不构成承诺。
（十三） "上市公司" 是指其股票获准在证券交易场所交易的股份有限公司。
（十四） "内幕人员" 是指任何由于持有发行人的股票，或者在发行人或者与发行人有密切联系的企业中担任重事、监事、高级管理人员，或者由于其会员地位、管理地位、监督地位和职业地位，或 者作为雇员、专业顾问履行职务，能够接触或者获取内幕信息的人员。
（十五） "内幕信息" 是指有关发行人、证券经营机构、有收购意图的法人、证券监督管理机构、证券业自律性管理组织以及与其有密切联系的人员所知悉的尚未公开的可能影响股票市场价格的重大信息。
（十六） "证券交易场所" 是指经批准设立的、进行证券交易的证券交易所和证券交易报价系统。
（十七） "证券业管理人员" 是指证券管理部门和证券业自律性管理组织的工作人员。
（十八） "证券业从业人员" 是指从事证券发行、交易及其他相关业务的机构的工作人员。

第八十二条 证券经营机构和证券交易所的管理规定，另行制定。

公司内部职工持股不适用本条例。

第八十三条 本条例由证券委负责解释。

第八十四条 本条例自发布之日起施行。

  
 

Provisional Regulations on the Administration of the Issuing and Trading of Shares

(Promulgated by the State Council on, and effective as of, 22 April 1993.)

PART ONE: GENERAL PROVISIONS

Article 1: These Regulations are formulated in order to meet the need for development of the socialist market economy, to establish and develop highly efficient stock markets that are uniform throughout the country, to safeguard the lawful rights and interests of investors, and the public interest and to promote the development of the national economy.

Article 2: All entities and individuals engaged in the issuing and trading of shares and related activities in the PRC must observe these Regulations. Provisions of these Regulations concerning shares shall be applicable to securities that are in the nature of or that possess the function of shares.

Article 3: The issue and trading of shares shall be conducted in adherence to the principles of openness, fairness and honesty.

Article 4: In the issue and trading of shares, the principal position that is occupied by the socialist public ownership system shall be safeguarded and State-owned assets shall be ensured not to be infringed.

Article 5: The State Council Securities Commission (the "Securities Commission") shall be the organization in charge of securities markets throughout the country and shall centrally administer securities markets throughout the country in accordance with laws and regulations. The China Securities supervision and Control Commission (the "Securities Supervision Commission") shall be the Securities Commission's executive organ for supervision and control and shall control and supervise the specific activities in connection with the issue and trading of securities in accordance with laws and regulations.

Article 6: Specific measures for the issue and trading of special Renminbi denominated shares shall be formulated separately.

The direct or indirect issue of shares outside the PRC by enterprises in the PRC, and the trading outside the PRC by enterprises in the PRC in their shares shall be subject to examination and approval by the Securities Commission. Specific measures therefor shall be formulated separately.

PART TWO: ISSUE OF SHARES

Article 7: Issuers of shares must be companies limited by shares that qualify for the issue of shares.

For the purposes of the preceding paragraph, the term "companies limited by shares" shall include companies limited by shares that have already been established and those that have been approved and are to be established.

Article 8: When applying for approval of the public issue of shares in connection with the establishment of a company limited by shares, the following conditions shall be fulfilled:

  1. the production and operations of the enterprise conform to the industrial policies of the State;

  2. the company issues only one class of common shares, and the same shares carry the same rights;

  3. the shares capital subscribed for by the promoters is not less than 35 per cent of the total share capital to be issued by the company;

  4. that portion of the total share capital to be issued by the company which is subscribed for by the sponsors is not less than Rmb 30 million, unless otherwise provided by the State;

  5. the portion to be issued to the public is not less than 25 per cent of the total share capital to be issued by the company and, of such portion, the share capital subscribed for by the staff and workers of the company does not exceed 10 per cent of the total share capital to be issued to the public; if the total share capital to be issued by the company exceeds Rmb 400 million, the Securities Supervision Commission may reduce the proportion of the portion to be issued to the public according to the circumstances and in accordance with regulations, provided that the minimum proportion shall not be less than 10 per cent of the total share capital to be issued by the company;

  6. the promoters have not committed any serious illegal acts in the last three years; and

  7. other conditions specified by the Securities Commission.

Article 9: When applying for approval of the public issue of shares in connection with the establishment of a company limited by shares by restructuring an existing enterprise, the following conditions shall be fulfilled in addition to those set forth in Article 8 of these Regulations:

  1. at the end of the year immediately preceding the issue, net assets accounted for not less than 30 per cent of total assets and intangible assets accounted for not more than 20 per cent of total assets, unless otherwise provided by the Securities Commission; and

  2. the enterprise has been profitable for each of the last three years.

When shares are issued to the public in connection with the establishment of a company limited by shares by restructuring a State-owned enterprise, the proportion of State-owned shares to the total share capital to be issued by the company shall be determined by the State Council or a department authorized by the State Council.

Article 10: When a company limited by shares applies for approval of the public issue of shares in connection with the increase of investment, it shall fulfill the following conditions in addition to those set forth in Articles 8 and 9 hereof:

  1. the proceeds from the immediately preceding public issue of shares were applied in a way consistent with the purpose stated in the prospectus thereof, and such application generated good benefits;

  2. not less than 12 months have passed since the immediately preceding public issue of shares;

  3. no serious illegal acts have been committed during the period between the immediately preceding public issue of shares and the present application; and

  4. other conditions imposed by the Securities Commission.

Article 11: When a company that has placed its shares privately applies for approval of the public issue of shares, it shall fulfill the following conditions in addition to those set forth in Articles 8 and 9 hereof:

  1. the proceeds from the private placement were applied in a way consistent with the purpose stated in the prospectus thereof, and such application generated good benefits;

  2. not less than 12 months have passed since the most recent private placement of shares;

  3. no serious illegal acts have been committed during the period between the most recent private placement and the present public issue;

  4. the share certificates of internal staff and workers have been issued in accordance with the prescribed scope and been delivered for central custody to the securities organization designated by the State; and

  5. other conditions imposed by the Securities Commission.

Article 12: Applications for approval of the public issue of shares shall be handled according to the procedure set forth below:

  1. the applicant engages professional organizations such as an accounting firm, an asset valuation organization and a law firm to examine, determine and value its creditworthiness, assets and financial position and to issue written legal opinions on relevant issues; thereupon, the applicant applies for approval of the public issue of shares to the People's Government of the province, autonomous region, centrally governed municipality with independent development plans (the "local government") or to the central department in charge of the enterprise, depending on the applicant's subordinate relationship;

  2. within the maximum size of issues imposed by the State, issue applications of local enterprises shall be examined and approved by the local government, and issue applications of central enterprises shall be examined and approved by the central departments in charge of the enterprises after consultation with the local governments of the places where the applicants are located; local governments and central departments in charge of enterprises shall make a decision on examination and approval within 30 working days after the date of receipt of the issue application, and shall submit a copy of their decision to the Securities Commission;

  3. approved issue applications are delivered to the Securities Supervision Commission for review; the Securities Supervision Commission shall issue a written opinion on review within 20 working days after the date of receipt of the application to be reviewed and submit a copy of such written opinion to the Securities Commission; after an application has been reviewed and approved by the Securities Supervision Commission, the applicant shall apply to the listing committee of the securities exchange; shares may be issued only after their listing has been accepted by such listing committee.

Article 13: To apply for approval to issue shares to the public, the following documents shall be submitted to the local government or the central department in charge of the enterprise:

  1. an application;

  2. the resolution of a sponsors' meeting or shareholders' general meeting approving the public issue of shares;

  3. the document approving the establishment of the company limited by shares;

  4. the company limited by shares business licence or the company limited by shares certificate of preparation and construction registration issued by the administration for industry and commerce;

  5. the articles of association of the company or the draft articles of association of the company;

  6. the prospectus;

  7. a feasibility study on application of the proceeds; in the case of fixed asset investment projects that require the State to provide funds or other conditions, the document approving the project proposal for the fixed asset investment issued by the relevant State authorities shall be submitted as well;

  8. financial reports of the company for the least three years or for the period since its establishment, audited by an accounting firm, and an audit report signed and sealed by two or more registered accountants and their firm;

  9. a written legal opinion on relevant issues signed and sealed by two or more lawyers and their firm;

  10. an asset valuation report signed and sealed by two or more professional valuers and their organization and an investment verification report signed and sealed by two or more registered accountants and their firm; if State-owned assets are involved, a confirmation document issued by the administration for State-owned assets shall be provided as well;

  11. the share issue and distribution plan and the distribution agreement; and

  12. other documents that the local government or the central department in charge of the enterprise requires to be submitted.

Article 14: When approved issue applications are delivered to the Securities Supervision Commission for review, the following documents shall be submitted in addition to those to be submitted pursuant to Article 13 hereof:

  1. the document from the local government or the central department in charge of the enterprise approving the issue application; and

  2. other documents that the Securities supervision commission requires to be submitted.

Article 15: A prospectus as mentioned in article 13 hereof shall be prepared in the form prescribed by the Securities Supervision Commission and specify the following particulars:

  1. the name and domicile of the company;

  2. a brief introduction to the sponsors and the issuer;

  3. the purpose of the fund-raising;

  4. the present total amount of the company's share capital, the class and total amount of shares in the present issue, the face value and selling price of each share, the net asset value per share prior to issue and the estimated net asset value per share upon completion of the issue, the issue costs and the issue commission;

  5. for first issues, the sponsors' share capital subscriptions, equity structure and investment certificates;

  6. the name of the distributor, the method of distribution and the amount to distributed;

  7. the target(s), time and place of the issue and the method of payment of subscription monies;

  8. the plan for application of the proceeds and the projected gains and risks;

  9. the company's short-term development plans and the company's profit forecast for the next year, which forecast a registered accountant shall have verified and issued verification comments on;

  10. important contracts;

  11. major litigation involving the company;

  12. the names and resumes of the company's directors and supervisors;

  13. information on the production and business situation and basic information of relevant business development for the last three years or the period since its establishment;

  14. financial reports of the company for the last three years or for the period since its establishment, audited by an accounting firm, and an audit report signed and sealed by two or more registered accountants and their firm;

  15. for issues for the purpose of increasing capital, information on the application of the proceeds from the company's previous public issue(s) of shares; and

  16. other particulars that the Securities Supervision Commission requires to be specified.

Article 16: The following text shall be carried on the cover of a prospectus: "The issuer warrants that the content of this memorandum is truthful, accurate and complete. No decision of the Government or the national securities control authorities in respect of this issue indicates a substantive judgment or warranty on their part in respect of the value of the shares issued by the issuer or the gains of the investor."

Article 17: All promoters or directors and the lead distributor shall warrant by way of signature of the prospectus that the prospectus does not contain any falsehoods, seriously misleading statements or major omissions and shall assume joint and several responsibility for such prospectus.

Article 18: Registered accountants and their firms, professional valuers and their organizations and lawyers and their firms that issue documents for issuers shall, when performing their duties, examine and verify the truthfulness, accuracy and completeness of the documents issued by them in accordance with the accepted professional standards and codes of conduct of their professions.

Article 19: Until approval for the public issue of shares is obtained, the contents of the prospectus may not be divulged by any person in any form. After approval for the public issue of shares has been obtained, the issuer shall publish the prospectus two to five working days prior to the commencement of the distribution period.

Issuers shall provide copies of the prospectus to subscribers. Securities distributors shall have the prospectus available on their business premises and shall be under an obligation to remind subscribers to peruse the same.

Prospectuses shall be valid for six months, calculated from the date of completion of the signing thereof. The issue of shares must cease immediately after the prospectus has become void.

Article 20: Shares issued to the public shall be distributed by securities house. Distribution shall include the method of underwriting and the method of placement as an agent.

Issuers shall sign distribution contracts with securities house. Distribution contracts shall specify the following particulars:

  1. the names and domiciles of the parties and the names of their legal representatives;

  2. the distribution method;

  3. the class, quantity, amount and issue price of the shares to be distributed;

  4. the distribution period and the initial and final dates of distribution;

  5. the date and method of payment of the proceeds from distribution;

  6. the calculation of the distribution fee and the method and date of payment of such fee;

  7. liability for breach of contract; and

  8. other matters to be agreed upon.

The principles for the charging of distribution fees by securities houses shall be determined by the Securities supervision Commission.

Article 21: When distributing shares, securities houses shall examine the truthfulness, accuracy and completeness of the prospectus and other relevant publicity material. If they find the same to contain any falsehoods, seriously misleading statements or major omissions, they may not make invitations to offer or make offers and, if they have already made an invitation to offer or made an offer, they shall immediately cease their sales activities and adopt appropriate remedial measures.

Article 22: Proposed public issue of shares with a total face value exceeding Rmb 30 million or expected total proceeds exceeding Rmb 50 million shall be distributed by a distribution syndicate.

Distribution syndicates shall be composed of two or more distributors. The lead distributor shall be determined by the issuer in accordance with the principle of fair competition by means of competitive bidding or agreement with the other distributors.

Article 23: If a proposed public issue of shares has a total face value exceeding Rmb 100 million or expected total proceeds of Rmb 150 million, the proportion of outside distributors among the members of the syndicate and the proportion of shares to be sold elsewhere among total number of shares to distributed shall be reasonable.

For the purposes of the preceding paragraph, the term, "outside" and "elsewhere" shall refer to areas outside the province, autonomous region or centrally governed municipality in which the issuer is located.

Article 24: Distribution periods may not be shorter than ten days and not longer than 90 days.

During the distribution period, the distributor shall make best efforts to sell to subscribers, and may not retain for itself, the shares that it has undertaken to distribute.

Upon expiration of the distribution period, the unsold shares shall be dealt with according to method of underwriting or placement as an agent, as agreed upon in the distribution agreement.

Article 25: When a distributor or the organization commissioned thereby issues share subscription application forms to the public, it may not charge a fee exceeding the printing and issuance cost of the forms and may not limit the number of forms to be issued.

If the number of shares subscribed for exceeds the total number of shares proposed to be issued to the public, the distributor shall sell the shares by pro rata allotment, by pro rata regressive allotment or by drawing lots, etc, in accordance with the principle of equitability. If the method of sale by drawing lots is adopted, the distributor shall publicly draw forms from among all the share subscription application forms on a specified date under the supervision of a notarial institution and according to the prescribed procedure, and shall sell the shares to the applicants whose forms are drawn.

No work units and individuals other than distributors or the organizations commissioned thereby may issue or resell share subscription application forms.

Article 26: Distributors shall submit written distribution reports tot he Securities Supervision Commission within 15 working days after the expiration of the distribution period.

Article 27: After the end of the distribution period, the making of invitations to offer and the making of offers to the public, except the issuer, by securities houses for the issuer's shares held by such securities houses or the sale by securities houses to the public, except the issuer, of the issuer's shares held by them shall be subject to the approval of the Securities Exchange Commission and shall be effected according to the prescribed procedure.

Article 28: This Part shall not apply to the issuance by issuers of new shares in exchange for outstanding shares, provided that no direct or indirect expenses are incurred as a result of such replacement.

PART THREE: TRADING OF SHARES

Article 29: Shares trading must be carried out in securities trading places where the trading of shares has been permitted by the Securities Commission.

Article 30: A company limited by shares applying for approval for its shares to be traded on a securities exchange shall fulfill the following conditions:

  1. its shares have been issued to the public;

  2. its total share capital after issue is not less than Rmb 50 million;

  3. the number of individual shareholders holding shares with a face value of Rmb 1,000 or more is not less than 1,000 and the total face value of shares held by individual shareholders is not less than Rmb 10 million;

  4. it has a record of continuous profitability for the last three years; where a company limited by shares is established by restructuring an existing enterprise, the existing enterprise shall have a record of continuous profitability for the last three years; this condition shall not apply to newly established companies limited by shares; and

  5. other conditions imposed by the Securities Commission.

Article 31: To apply for approval for its shares to be traded on a securities exchange, a company limited by shares that has issued shares to the public and fulfills the conditions set forth in the preceding Article shall submit an application to the listing committee of the securities exchange. Within 20 working days after the date of receipt of the application, the listing committee shall examine and approve the same and determine the specific time of listing. The examination and approval documents shall be submitted to the Securities Supervision Commission for the record, and copies thereof shall be submitted to the Securities Commission.

Article 32: To apply for approval for its shares to be traded on a securities exchange, a company limited by shares shall submit the following documents to the listing committee of the securities exchange:

  1. a written application;

  2. the company registration document;

  3. the document approving public issue of the shares;

  4. financial reports of the company for the last three years or for the period since its establishment, audited by an accounting firm, and an audit report signed and sealed by two or more registered accountants and their firm;

  5. a written recommendation from a member of the securities exchange;

  6. the most recent prospectus; and

  7. other documents required by the securities exchange.

Article 33: After shares have been approved for trading on a securities exchange, the listed company shall make an announcement of listing and publish the documents set forth in Article 32 of these Regulations.

Article 34: In addition to the main contents of prospectuses as set forth in Article 15 of these Regulations, public announcements of listing shall contain the following particulars:

  1. the date on which the shares were approved for trading on the securities exchange and the number of the approval document;

  2. details of the share issue, the share structure and the names and shareholdings of the ten largest shareholders;

  3. the resolution adopted at the company's inaugural meeting or shareholders' general meeting to approve the trading of the company's shares on the securities exchange;

  4. the resumes of the directors, supervisors and senior management personnel of the company and details of their holdings of securities of the company;

  5. documents concerning the business results and financial position of the company for the last three years or for the period since its establishment and its profit forecast for the next year; and

  6. other particulars that the securities exchange requires to be specified.

Article 35: Registered accountants and their firms, professional valuers and their organizations and lawyers and their firms that issue documents for listed companies shall, when performing their duties, examine and verify the truthfulness, accuracy and completeness of the documents issued by them in accordance with the accepted professional standards and codes of conduct of their professions.

Article 36: The transfer of State-owned shares shall be subject to approval by the relevant State authorities. The specific procedures for such transfer shall be formulated separately.

The transfer of State-owned shares may not harm the interest in State-owned shares.

Article 37: Securities trading places, institutions for custody, clearing, transfer and registration of securities and securities houses shall ensure that principals from elsewhere are treated equally to principals from the place where such places, institutions and houses are located, and may not discriminate against or restrict principals from elsewhere.

Article 38: Where a director, supervisor or member of the senior management of a company limited by shares, or a legal person share-holder in a company limited by shares holding five per cent or more of the voting stock of such company, sells his or its shares in the company within six months after purchase or buys shares in the company within six months after the sale of his or its shares in the company within six months after the sale of his or its shares in the company, the profit derived therefrom shall belong to the company.

The preceding paragraph shall apply to the directors, supervisors and members of the senior management of legal person shareholders holding five per cent or more of the voting stock of such company.

Article 39: Persons engaged in the securities business, persons controlling the securities business and other persons prohibited by the State from buying and selling shares may not hold, buy or sell shares, whether directly or indirectly, except that they may buy and sell investment fund securities the issue of which has been approved.

Article 40: Relevant professionals who issue documents such as audit reports, asset valuation reports, legal opinions, etc, in connection with the issue of shares may not buy or hold such shares during the distribution period of such shares and period of six months thereafter.

Relevant professionals who issue documents such as audit reports, asset valuation reports, legal opinions, etc, for listed companies may not buy or hold shares in such companies until their documents such as audit reports, asset valuation reports, legal opinions, etc, have become public information; nor may they buy shares in such companies within five working days after such documents have become public information.

Article 41: Companies limited by shares may not repurchase their outstanding shares if such repurchase has not been approved in accordance with the relevant regulations of the State.

Article 42: No person may trade options and futures of shares and their indexes without the approval of the Securities Commission.

Article 43: No financial institution may provide loans for share trading.

Article 44: Securities houses may not lend their clients' shares to others or use them as collateral.

Article 45: Securities houses that, upon approval, are engaged in two or more of the following lines of business: securities business for their own account, securities business as an agent and management of investment funds, shall have separate personnel, fund and accounts for each line of business.

PART FOUR: TAKEOVER OF LISTED COMPANIES

Article 46: No individual may hold 0.5 per cent or more of the outstanding common shares of a listed company. Any excess amount shall be acquired by the company at the lower of the original purchase price and the market price after having obtained the approval of the Securities Supervision Commission. However, if an individual's holding of outstanding common shares in a company becomes 0.5 per cent or more of such company's total outstanding common shares as a result of a reduction in the company's total amount of outstanding common shares, the excess portion may not be acquired by the company during a reasonable period of time.

The 0.5 per cent limit provided for in the preceding paragraph shall not apply to the holdings of special Renminbi denominated shares and shares issued outside the PRC of foreign individuals and individuals from Hongkong, Macao and Taiwan.

Article 47: Within three working days after any legal person's direct or indirect holding of outstanding common shares in a listed company reaches five per cent of such company's total outstanding common shares, such legal person shall report such fact in writing to such company, the securities trading place and the Securities Supervision Commission and make an announcement. However, if a legal person's holding of outstanding common shares in a company becomes five per cent or more of such company's total outstanding common shares as a result of a reduction in the company's total amount of outstanding common shares, the aforementioned restriction shall not apply during a reasonable period of time.

Once any legal person holds five per cent or more of the outstanding common shares of a listed company, it shall, within three working days after each time that such shareholding is increased or decreased by a number of shares constituting not less that two per cent of the total outstanding amount of such shares, report such fact in writing to such company, the securities trading place and the Securities Supervision Commission and make an announcement.

Within two working days after the date on which a legal person makes a report and an announcement, and during the period before it makes a report, pursuant to either of the preceding two paragraphs, it may not buy or sell such shares again, whether directly or indirectly.

Article 48: Within 45 working days after any legal person's (other than a promoters's) direct or indirect holding of outstanding common shares in a listed company reaches 30 per cent of such company's total outstanding common shares, such legal person shall make an offer of takeover to all the shareholders of such company at the higher of the following two prices:

  1. the highest price paid by the offeror for purchase of such shares during the 12 months preceding the issuance of the takeover offer;

  2. the average market price of such shares during the 30 working days preceding the issuance of the takeover offer.

A shareholder as described in the preceding paragraph may not buy such shares again prior to issuance of the takeover offer.

Article 49: Before issuing a takeover offer, an offeror shall submit a written report to the Securities Supervision Commission concerning the takeover. Simultaneously with the issuance of the takeover offer, the offeror shall furnish the offerees and the securities trading place with details concerning itself and all information regarding the offer, and shall warrant that the information is truthful, accurate, complete and not misleading.

Takeover offers shall be valid for not less than 30 working days, calculated from the date of issuance of the offers. Offerors may not withdraw their takeover offers within 30 working days after the date of issuance of such offers.

Article 50: All the conditions contained in a takeover offer shall apply to all the holders of the same kind shares.

Article 51: If, upon expiration of a takeover offer, the offeror's holding of common shares accounts for less than 50 per cent of the total outstanding common shares of the company, the takeover shall have failed and, unless the offeror issues a new takeover offer, the number of the company's outstanding common shares purchased each year by the offeror may not exceed five per cent of the company's total outstanding common shares.

If, upon expiration of a takeover offer, the offeror's holding of common shares accounts for 75 per cent or more of the total outstanding common shares of the company, the company shall terminate the trading of its shares on the securities exchange.

If the total number of shares that the maker of a takeover offer offers to buy is less than the total number of shares for which the offer is preliminarily accepted, the offeror shall purchase such shares from the preliminarily accepting offerees on a pro rata basis.

If, upon expiration of a takeover offer, the offeror's shareholding has reached 90 per cent of the total shares of the company, the remaining shareholders shall have the right to enforce the sale of their shares to the offeror on equal conditions.

Article 52: In the event of a change in any of the main conditions of offer after a takeover offer has been issued, the offeror shall promptly notify all offerees. Such notification may be made in the form of a press conference or newspaper announcement or by another means of dissemination.

During the term of a takeover offer and for a period of 30 working days thereafter, the offeror may not purchase the shares in question on any conditions other than those set forth in the offer.

Until a takeover offer becomes void, offerees who have preliminarily accepted the offer shall have the right to withdraw their preliminary acceptance.

PART FIVE: CUSTODY, CLEARING AND TRANSFER

Article 53: The registration method shall be adopted for issue of shares. Issuers may issue share certificates in book form and may also issue share certificates in scrip form. Registers of share certificates in book form shall be kept in the custody of organizations designated by the Securities Supervision Commission. Share certificates in scrip form to be kept in central custody shall also be kept in the custody or organizations designated by the Securities Supervision Commission.

Article 54: Share custody organizations may not lend shareholders' shares to others or use them as collateral, without the consent of the shareholders.

Article 55: Securities clearing houses shall formulate business regulations and internal control regulations for the clearing and settlement of share transactions in accordance with the principles of convenience, safely and equitability.

Securities clearing houses shall admit members in accordance with the principle of equitability.

Article 56: Securities custody, clearance, transfer and registration organizations shall be subject to the supervision and control of the Securities Supervision Commission.

PART SIX: DISCLOSURE OF INFORMATION BY LISTED COMPANIES

Article 57: Listed companies shall furnish the Securities Supervision Commission and securities trading places with the following documents:

  1. an interim report, to be submitted within 60 days after the end of the first 6 months of each fiscal year; and

  2. an annual report audited by a registered accountant, to be submitted within 120 days after the end of each fiscal year.

Interim and annual reports shall conform to the State's accounting system and the relevant regulations of the Securities Supervision Commission. They shall be signed by the director or manager authorized by the listed company and sealed by the listed company.

Article 58: Interim reports as specified in Article 57 of these Regulations shall included the following:

  1. a company financial report;

  2. an analysis by the company's management of the company's financial position and operating results;

  3. major litigation involving the company;

  4. details of fluctuations in the value of the outstanding shares of the company.

  5. important matters submitted by the company to the consideration of shareholders with voting rights; and

  6. other matters that the Securities supervision Commission requires to be specified.

Article 59: Annual reports as specified in Article 57 of these Regulations shall include the following:

  1. a summary of the company's circumstances;

  2. a brief description of the company's main products or main services;

  3. a summary of the circumstances of the company's industry;

  4. a summary of the circumstances of important assets owned by the company such as factories, mines and real property;

  5. details of the outstanding shares of the company, including a list of the names of shareholders holding five per cent or more of the company's outstanding common shares, and a list of the names of the 10 largest shareholders;

  6. the number of shareholders in the company;

  7. a brief description of the directors, supervisors and senior management personnel of the company, their shareholdings and their remuneration;

  8. a table and a brief description of the company and its affiliates;

  9. an abstract of financial information regarding the company for the last three years or for the period since its establishment;

  10. an analysis by the company's management of the company's financial position and operating results;

  11. details of fluctuations in the value of the outstanding bonds of the company;

  12. major litigation involving the company;

  13. a comparative financial report on the company for the last two years, together with its attached tables and notes, audited by a registered accountant; if the listed company is a holding company, a comparative consolidated financial report for the last two years shall be included as well; and

  14. any other matters that the Securities Supervision Committee requires to be specified.

Article 60: When a major event occurs which may have a comparatively large impact on the market value of a listed company's shares and which investors are not aware of, the listed company shall promptly submit a report concerning such important event to the securities trading place and the Securities Supervision Commission, and publish the event for the public, explaining the essentials of the event. However, if the listed company has sufficient reason to believe that publication of such major event may harm its interests, and that not publishing the event will not lead to major fluctuation in the market value of its shares, it shall not be required to publish the event, subject tot he consent of the securities trading place.

The major events referred to in the preceding paragraph shall include the following:

  1. the company concludes a major contract that may have a marked effect on one or several of the following: the company's assets, liabilities, rights, interests and operating gains;

  2. a major change occurs in the company's business policy or an item of the company's business;

  3. the company engages in major investment activity or makes a comparatively large purchase of long-lived assets;

  4. the company incurs a major debt;

  5. the company is in breach of contract by being unable to pay a major debt as it becomes due;

  6. the company incurs a major business or non-business loss;

  7. company assets suffer a major loss;

  8. an important change occurs in the production or business environment of the company;

  9. a newly promulgated law, regulation, policy or rule may have a marked effect on the operation of the company;

  10. the chairman of the board, 30 per cent or more of the directors or the general manager is changed;

  11. every time the outstanding common shares of the company held by a shareholder that holds five per cent or more of such shares are increased or decreased by a number of shares constituting two per cent or more of the total outstanding amount of such shares;

  12. major litigation involving the company; and

  13. the company goes into liquidation or becomes insolvent.

Article 61: When news appearing on any public media may have a misleading effect on the market value of a listed company's shares, such company shall, once it learns of the appearance of the news, make a public clarification.

Article 62: If a listed company's directors, supervisors and senior management personnel hold common shares in such company, they shall report the details of their holdings to the Securities Supervision Commission, the securities trading place and the company. If their holdings change, they shall make a report to the Securities supervision Commission, the securities trading place and the company within 10 working days from the date of such change.

The persons referred to in the previous paragraph shall for six months after retirement or temporarily leaving their jobs bear on obligation to make reports in accordance with the provision of this Article.

Article 63: Listed companies shall place information that they are required to publish in national newspapers and periodicals designated by the Securities Supervision Commission.

Simultaneously with publishing information in accordance with the preceding paragraph, listed companies may publish the relevant information in local publications designated by the securities trading places.

Article 64: The Securities Supervision Commission shall promptly disclose to the public and make available for inspection by investors the reports, public announcements and other documents submitted by listed companies, by their directors, supervisors and senior management personnel, and by their shareholders holding five per cent or more of the companies' outstanding common shares.

All information that the Securities Supervision Commission requires to be disclosed shall be public, with the following exceptions:

  1. business secrets that are protected, and are permitted not to be disclosed, by laws and regulations;

  2. non-public information and documents obtained by the Securities Supervision Commission during the course of its investigation of illegal activities;

  3. other information and documents that in accordance with relevant laws and regulations, are not required to be disclosed.

Article 65: Shareholders may authorize others to exercise their rights of consent and voting rights of consent or voting rights of 25 or more persons observes the regulations of the Securities Supervision Commission with respect to the disclosure of information and the making of reports.

Article 66: In addition to submitting to the Securities Supervision Commission and the securities trading place the reports, announcements, information and documents specified in this Part, listed companies shall submit relevant reports, announcements, information and documents in accordance with the regulations of the securities trading place and disclose the same to all their shareholders.

Article 67: Articles 57 to 65 of these Regulations shall apply to companies limited by shares that have issued shares to the public which are not traded in securities trading places.

PART SEVEN: INVESTIGATIONS AND PENALTIES

Article 68: The Securities Supervision Commission shall have the power to investigate, either on its own or in conjunction with relevant State authorities, work units and individuals that violate these Regulations. The investigation of major cases shall be organized by the Securities Commission.

Article 69: The Securities Supervision Commission may investigate the business activities of securities houses.

Article 70: A company limited by shares that violates these Regulations in any of the following ways shall, depending on the circumstances, be subjected to one or several of the following penalties: issuance of a warning, issuance of an order to return the illegally raised subscription monies, confiscation of the illegal income and imposition of a fine, while in serious cases its qualifications to issue shares shall be revoked:

  1. it issues shares, or issues shares in disguised form, without approval;

  2. it obtains approval to issue shares or approval for its shares to be traded in a securities trading place through fraud or other improper means;

  3. it issues shares other than by the prescribed method and within the prescribed scope or it sells shares after the prospectus has become void; or

  4. it repurchases its outstanding shares without approval.

The directors, supervisors and senior management personnel of a company limited by shares who bear direct responsibility for a violation as set forth above shall be given a warming or fined not less than Rmb 30,000 and not more than Rmb 300,000.

Article 71: A securities house that violates these Regulations in any of the following ways shall, depending on the circumstances, be subjected to one or several of the following penalties: issuance of a warning, confiscation of the illegally obtained shares and other illegal income and imposition of a fine, while in serious cases its securities business shall be restricted or suspended or its securities business permit revoked:

  1. it distributes shares other than in accordance with the prescribed time, procedure and method;

  2. it issues share subscription application forms other than in accordance with the regulations;

  3. it lends its client's shares to others or uses them as collateral;

  4. it charges unreasonable commissions or other fees;

  5. it buys or sells shares for its own account in the name of its clients;

  6. it diverts to other purposes guarantees deposited by its clients;

  7. in the course of buying and selling securities as the agent of its clients, it shares the share trading profits or losses with its clients or it offers its clients a warranty that they will be held harmless against losses; or

  8. it finances shares trading.

The persons in charge and the directly responsible personnel of a securities house that bear responsibility for a violation as set forth above shall be given a warning or fined not less than Rmb 30,000 and not more than Rmb 300,000.

Article 72: Insiders and other persons who obtain inside information by improper means that violate these Regulations by divulging inside information, buying or selling shares on the basis of inside information or suggesting to others on the basis of inside information that they buy or sell shares, shall, depending on the circumstances, be subjected to confiscation of the illegally obtained shares and other illegal income and be fined not less than Rmb 50,000 and not more than Rmb 500,000.

Persons engaged in the securities business, persons controlling the securities business and other persons prohibited by the State from buying and selling shares who violate these Regulations by directly or indirectly holding, buying or selling shares shall be ordered to sell their shareholding within a specified period and in addition be subjected to one or several of the following penalties, depending on the circumstance: issuance of a warning, confiscation of the illegal income and imposition of a fine of not less than Rmb 5,000 and not more than Rmb 50,000.

Article 73: Accounting firms, asset valuation organizations and law firms that violate these Regulations by issuing documents that contain falsehoods, seriously misleading contents or major omissions shall, depending on the circumstances, be subjected to one or several of the following penalties: issuance of a warning, confiscation of the illegal income and imposition of a fine, while in serious cases its engagement in the securities business shall be suspended or its securities business permit revoked.

Registered accountants, professional valuers and lawyers who bear direct responsibility for a violation as set forth above shall be given a warning or fined not less than Rmb 30,000 and not more than Rmb 300,000, while in serious cases their qualifications to engage in the securities of a fine:

Article 74: Any unit or individual that violates these Regulations in any of the following ways shall, depending on the circumstances, be subjected to one or several of the following penalties: issuance of a warning, confiscation of the illegally obtained shares and other illegal income and imposition of a fine:

  1. it or he trades shares other than in a securities trading place where the trading of shares has been permitted by the Securities Commission;

  2. it or he makes false or seriously misleading statements or omits major information in the course of the issue or trading of shares;

  3. it or he manipulates stock market prices through conspiracy or pooling of funds or influences the issue or trading of shares by spreading rumours, etc;

  4. it or he collaborates with others to create false share prices, fails to transfer ownership in or actual control of shares or makes sham purchases or sales;

  5. it or he sells or offers to sell shares that it or he does not hold, thereby disrupting the share market;

  6. it or he extorts or forces the sale or purchase of shares, or assists others with the sale or purchase of shares, by using its or his powers of office or by other improper means;

  7. it or he trades options and futures of shares and their indices without approval;

  8. it or he fails to perform its or his obligation to report, disclose or publish relevant documents and information;

  9. it or he forges, falsifies or destroys documents such as business records and account books relating to the issue or trading of shares; or

  10. it or he otherwise illegally engages in the issue or trading of shares and related activities.If a company limited by shares commits any of the violations set forth in the preceding paragraph and the circumstances are serious, its qualifications to issue shares may be revoked. If a securities house commits any of the violations set forth in the preceding paragraph and the circumstances are serious, its securities business may be restricted or suspended or its securities business permit revoked.

Article 75: The penalties set forth in Articles 70, 71, 72 and 74 of these Regulations shall be decided upon by organizations designated by the Securities Commission, except that serious cases shall be reported to the Securities Commission for determination of punishment. The penalties set forth in Article 73 of these Regulation shall be decided upon by the relevant authorities within the limits of their respective powers.

Article 76: If a listed company, or a member of a securities exchange or other self-regulating body governing the securities business or personnel thereof, violates these Regulations, it or he shall be subjected to administrative punishment in accordance with these Regulations and, in addition, be subjected to sanctions by the securities exchange or other self-regulating governing body in accordance with its charter or rules of self-regulation.

Article 77: Anyone whose violation of these Regulations causes loss to others shall bear civil liability for compensation according to law.

Article 78: Anyone whose violation of these Regulations constitutes a criminal offence shall be prosecuted according to law.

PART EIGHT: ARBITRATION OF DISPUTES

Article 79: disputes in connection with the issue or trading of shares may be submitted by the parties to an arbitration institute for mediation and arbitration in accordance with the provisions of their agreement.

Article 80: disputes arising between securities houses and between securities house and securities trading places from the issue or trading of shares shall be mediated and arbitrated by arbitration institutes established with the approval of or designated by the Securities Commission.

PART NINE: SUPPLEMENTARY

Article 81: For the purposes of these Regulations, the following terms shall have the meanings assigned to them below:

  1. The term "share certificates" shall mean transferable, written certificates issued by a company limited by shares, indicating that their shareholders have rights and interests and bear obligations in accordance with their shareholdings.

The term " share certificates in book form" shall mean written registers drawn up by an issuer according to the uniform format specified by the Securities Supervision Commission, in which the rights and interests of the shareholders are recorded.

The term " share certificates in scrip form" shall mean written share certificates centrally printed by an issuer with a printing organization designated by the Securities Supervision Commission.

  1. The term "outstanding common shares" shall mean common shares other than the company's treasury shares.

  2. The terms "public issue" and "issue to public" shall mean the making of an invitation to offer for an issuer's shares, the making of an offer for an issuer's shares of the sale of an issuer's shares by the issuer to the public, other than the issuer, through a securities house.

  3. The term "distribution" shall mean the underwriting or the placement as an agent by a securities house of the shares issued by an issuer, according to an agreement.

  4. The term "distributor" shall mean a securities house that sells shares on behalf of an issuer according to the method of underwriting or placement as an agent.

  5. The term "underwriting" shall mean the method of distribution whereby the distributor purchases all the shares that remain unsold at the end of the distribution period.

  6. The term " placement as an agent" shall mean the method of distribution whereby the distributor sells the shares as an agent and returns to the issuer or underwriter all the shares that remain unsold at the end of the distribution period.

  7. The term "publication" shall mean the printing in a newspaper or periodical designated by the Securities Supervision Commission of a document to be disclosed hereunder.

  8. The term "disclosure" shall mean the making available for inspection by investors, at the business premises of the issuer and those of its securities distributor and at the Securities Commission, of documents to be disclosed hereunder.

  9. The term "offer" shall mean an intention to buy or sell a certain share declared orally or in writing to specified or unspecified person.

  10. The term "invitation to offer" shall mean the declaration of an intention to propose to others that they make an offer to oneself

  11. The term "preliminary acceptance" shall mean an offeree's preliminary declaration of intention to agree to accept an offer, and does not constitute a commitment until the expiration of the offer period.

  12. The term "listed company" shall mean a company limited by shares whose shares have been approved for trading in a securities trading place.

  13. The term " insiders" shall mean any persons who have access to or can obtain inside information by virtue of their holding of the issuer's shares or their office of director, supervisor or member of the senior management of the issuer or of an enterprise closely associated with the issuer, or by virtue of their position as a member, control position, supervisory position or professional position, or by virtue of the exercise of their duties as an employee or professional consultant.

  14. The term "inside information" shall mean unpublished important information that may influence stock market prices and that is known to the relevant issuers, securities houses, legal persons intending to effect a takeover, securities supervision and control organizations, self- regulating bodies governing the securities business, and persons closely associated therewith.

  15. The term "securities trading places" shall mean securities exchanges and securities trading quotation systems that have been established upon approval and carry out securities trading.

  16. The term "persons controlling the securities business" shall mean personnel of securities control authorities and of self-regulating bodies governing the securities business.

  17. The term "persons engaged in the securities business" shall mean personnel of organizations engaged in the issue and trading of securities and other, related business.

Article 82: Regulations for the administration of securities houses and securities exchanges shall be formulated separately.

These Regulations shall not apply to the shareholdings of the internal staff and workers of companies.

Article 83: The Securities Commission shall be responsible for the interpretation of these Regulations.

Article 84: These Regulations shall be implemented as of date of promulgation.

Administration of the Issuing and Trading of Shares Tentative Regulations

Introduction
The Administration of the Issuing and Trading of Shares Tentative Regulations ("the Regulations") became effective when they were announced by the China Securities Regulatory Committee (CSRC) on 3 May 1993. Containing a total of 84 articles in nine parts, the Regulations deal with such securities-related matters as the issuance and trading of shares, takeovers of listed companies, custody, clearances and transfers of accounts, disclosures, investigations, penalties and settlement of disputes. The State Council Securities Commission (SCSC) is given the jurisdictional authority to interpret the regulations.

The Regulations reaffirm the overall authority of the SCSC and the CSRC which were established under Article 1 of the State Council Circular [1992]. Article 5 of the Regulations stipulates that the SCSC is the "supervisory organ to be in charge of the unified management of the nation's securities markets in accordance with legal and regulatory provisions". Article 5 further stipulates that the CSRC is "the supervisory, administrative and executive organ of the SCSC to be in charge of the supervision and administration of concrete activities relating to the issuing and trading of securities, and in accordance with legal and regulatory provisions".

Article 6 specifically excludes from the jurisdiction of the Regulations the issuance and trading of B-shares and of shares of domestic enterprises on overseas markets (so-called H or I shares). However, it can be assumed that the regulations governing B shares will be similar. Indeed, there is no reason in principle why B shares should not be governed by the same set of rules. The government of China, however, likes to have different legal regimes governing "domestic" and "foreign economic" matters; a policy which often causes conflicts and should perhaps be reviewed.

The new and central regulatory framework established by the Regulations for the issuance and trading of securities in the PRC will serve as overriding guidelines for the two official securities exchanges in Shanghai and Shenzhen, as well as for future securities markets in the PRC.

Issuance of Shares
The State Council Circular of 17 December, 1992 stipulates guidelines and procedures for the listing of PRC enterprises and the issuing of securities. Article 2(1) of the State Council Circular provides that authorized enterprises must, after the appraisal of assets and checking of finances by an appraisal organization or accountancy firm authorized by the CSRC, present an application for listing of shares to the regional authorities which have an independent development plan in the place where the enterprise is located. Provincial and municipal governments which have established an independent development plan within the scope delegated by the State to the localities, will examine and approve regional enterprises. Central enterprises will be examined and approved by their department or ministry in charge in consultation with the provincial or municipal government.

Approved applications for issue will be sent to the CSRC for re-examination. Afterwards, the listing committees of the Shanghai and Shenzhen securities exchanges will examine and approve applications and report to the CSRC. If the CSRC has no dissenting opinions within 15 days of receiving a securities exchange's report, then the issue may take place. The timing of the listing will be decided by the listing committee of the relevant securities exchange.

The Regulations make several amendments to the State Council Circular and take the regulation of share issues several steps further by specifying various provisions governing the qualifications of, and requirements for, issuers, the application procedures for issuing, and prospectus and underwriting procedures. It should be noted, however, that the earlier provisions of the State Council Circular have not been formally repealed by the Regulations.

Qualifications for issuer-applicants. Article 7 of the Regulations stipulates that share issuers must be companies limited by shares and "entitled to issue shares". Article 7 also stipulates that "companies limited by shares" include those that have already been established, as well as those that have been approved and are to be established. The Regulations contain no further definition or qualification for such companies. As such, the qualifying provisions under the State Council Circular would presumably apply.

In addition to the qualifications under the State Council Circular, the Regulations add the following criteria for share issuing applicants:

  • the company's business operations must accord with national industrial policy;

  • the company must issue common shares that are limited to one class so that all shares possess the same rights;

  • promoters must subscribe for a total number of shares not less than 35 per cent of the total number of shares issued;

  • the total amount of capital subscribed by the promoters cannot be less than Rmb 30 million, unless otherwise provided for by State authorities;

  • the total amount of shares issued to the public must not be less than 25 per cent of the issued shares of the company. Also, of those shares issued to the general public, not more than 10 per cent may be subscribed by company staff. Companies that plan to issue shares exceeding Rmb 400 million could, subject to the approval of the CSRC, reduce the total amount of shares issued to the public, but in any event, such shares must be no less than 10 per cent of the total issued shares of the company;

  • the promoters have not committed any serious violation of the law within three years prior to the issuance of shares; and

  • other requirements as the CSRC may impose.

Newly restructured enterprises (ie, those converted from State or other types of enterprises into companies limited by shares) must also meet the following additional requirements when applying for share issuance:

  • at the end of the fiscal year before the issue, the company's net asset may not be lower than 30 per cent of the company's gross assets and its intangible assets shall not be more than 20 per cent of its net assets of (except where the CSRC has provided otherwise); and

  • the company will have three consecutive profit-making years prior to the application.

The criteria to be met in the case of subsequent issues include the following:

  • the capital raised in the previous issue must have been used in accordance with the purposes stated in the previous prospectus;

  • the new or additional issue must take place at least 12 months after the previous issue; and

  • there has been no serious violation of law between the previous issue and the present application.

Application procedures. The Regulations set out application procedures for the issuance of shares. The applicant is required to retain the services of chartered accountants, property valuers and lawyers. These individuals are required to examine and certify, in accordance with their respective professional standards and codes of ethics, the "truthfulness, accuracy and completeness" of the subject matter (ie, the information, capital assets and financial condition of the applicant). Professional firms found in breach of the above requirements may be suspended or banned from any future undertaking of securities work in the PRC, and, in serious circumstances, may be fined up to Rmb 300,000.

The application, once approved by relevant central and local departments, must be submitted to the CSRC for review. Within 20 working days of receiving the application, the CSRC must provide its review opinion letter to the SCSC. Also, applications approved by the CSRC must be submitted to the listing committee of the relevant securities exchanges for a listing application. Only those applications accepted by the listing committees may issue shares publicly.

Documentation requirements. Article 13 of the Regulations specifies a list of documentary requirements for share issue applications, while Article 15 defines the format and content requirements for a company prospectus. No person is permitted to disclose the contents of the prospectus "under any format" prior to the public issue of the shares. The issuer is required to publish the company prospectus within two to five working days of the commencement of the underwriting period, which is fixed at "not less than ten days, and no more than 90 days" (Article 24). The issuer is required to provide a copy of the prospectus to any subscriber or potential subscriber, and must remind subscribers to review the company prospectus. A prospectus is valid for six months.

All promoters or company directors and the main underwriter should, in writing and under signature in the prospectus, guarantee that there are no fraudulent statements, serious misleading statements or substantial omissions in the prospectus. If the approval to issue shares is obtained through "fraudulent or other improper means", the share issue may be terminated, and the issuer may be fined up to Rmb 300,000 (Article 70(2)).

Articles 20 to 28 of the Regulations contain various provisions governing the underwriting of the issue, including:

  • the contents of the underwriting agreement;

  • provision for inspection of the company prospectus by the underwriting organ(s);

  • stipulations regarding syndicates of underwriters;

  • under-subscription;

  • subscription forms requirements;

  • reports to the CSRC on subscription; and

  • approval requirements for new offers subsequent to the termination of the underwriting period.

Share Trading
The Regulations affirm that all publicly-traded share transactions must be conducted on the securities exchanges approved by the SCSC. Only two securities exchanges have been officially approved in the PRC; the Shanghai Securities Exchange and the Shenzhen Stock Exchange (Article 30). To apply for share trading on the securities exchanges, a PRC company limited by shares must meet the following requirements:

  • the company shares must have been publicly issued:

  • the total shares after issue must not have a net worth of less than Rmb 50 million;

  • there must be no less than 1,000 individual shareholders holding shares worth Rmb 1,000 or more each and the total value of shares held by individuals should not be less than Rmb 10 million; and

  • with the exception of newly-established companies limited by shares, the company or the original enterprise prior to restructuring must have three consecutive profit-making years prior to share issuance.

A company limited by shares applying for share trading on a securities exchange must submit to the listing committee of the securities exchange a list of documents as set out in Article 32. Within 20 working days of receipt of the application and accompanying documents, the listing committee must either approve or reject the application and confirm the exact date of listing if the application is approved.

Article 34 requires that when obtaining approval, the listed company must make known the "listing announcement" and must publish the list of documents accompanying the application for trading as specified under Article 32.

The transfer of State-owned shares must be approved by the relevant government department. While specific measures will be enacted in future, Article 36 of the Regulations, nevertheless, stipulates that the transfer of State-owned shares must not adversely affect the rights and benefits accompanying State-owned shares. The Regulations further require that a company limited by shares may not repurchase its publicly-issued shares without obtaining prior approval.

Restrictions on share transactions. To prevent or control share speculation, especially margin speculation, the Regulations prohibit financial institutions from providing mortgages on share trading. Furthermore, share dealers are prohibited from lending or putting up shares for security.

One of the major concerns for investors in PRC securities has been the question of insider trading. Partly in response to such concerns and partly in conformity with international practices the Regulations contain several provisions governing this issue. Article 38 provides that the directors, supervisors or senior management staff of the company, as well as shareholders holding in excess of five per cent of the voting shares of the company (and the directors, supervisors or senior managers of such shareholders), shall return to the company the profits made by selling shares within six months of purchasing them or from buying shares within six months of a previous sale.

With the exception of investment fund stocks already approved for issue, securities dealers, securities managers and those prohibited from share trading pursuant to State regulations may not engage in the trading of shares, either directly or indirectly (Article 39). Similarly, professionals engaged in the assessment, evaluation and legal opinions of a particular share issue cannot take part in the buying or holding of such shares before the documents they have prepared become public and for five days thereafter, or during the underwriting period and for six months thereafter.

Takeovers
Article 48 of the Regulations provides that any legal person holding, either directly or indirectly, up to 30 per cent of the issued common shares of a listed company should, within 45 days of its shareholding reaching 30 per cent, issue a general offer to all shareholders of the company based on the higher of the following prices and on a cash-payment basis:

  • the highest price paid by the offeror in acquiring such shares during the 12 month period preceding the takeover offer; or

  • the average market price of such shares within 30 working days before the issuance of the takeover offer.

Article 48 further specifies that those shareholders required to issue a takeover bid, as above, should not continue to acquire the company's shares prior to the making of the tender offer.

Prior to the issuance of the takeover bid, the bidder must make a report in writing to the CSRC on the proposed takeover. The bidder is also required to provide "complete information" concerning the offer to the subjects of the offer and to the relevant stock exchange. The bidder is further required to guarantee the material truthfulness, accuracy, and completeness of the information, as well as guarantee against misrepresentation.

A bidder may not withdraw the general offer within 30 working days after the issuance of the bid (ie, the period of validity), and all conditions in the general offer must apply to all shareholders of the same kind of shares.

Should the bidder fail to acquire over 50 per cent of the company's issued shares at the end of the period of validity, the takeover bid will be considered a failure and, thereafter, the failed bidder may not acquire more than five per cent of the issued common shares of the company (Article 51).

Delisting is required if the bidder holds more than 75 per cent of the issued common shares of the company at the end of the period of validity. It is further stipulated that should the bidder hold 90 per cent or more of the total amount of company shares at the end of the period of validity, all the minority shareholders will have the right to compel the bidder to purchase their shares on the same terms and conditions as were given to the other sellers.

A unique requirement under the Interim Regulations is the stipulation that no individual may hold more than 0.5 per cent of the issued common shares of a listed company. Should an individual hold more than this amount, the company may, subject to the agreement of the CSRC, purchase the excessive shares based on the lower of the original purchase price and the market price (Article 46). Specifically exempted from this requirement, however, is the situation where shareholding in excess of 0.5 per cent of the issued common shares results from a reduction in the total number of the company's issued common shares. In this case such excessive shares may not be repurchased by the company "within a reasonable period of time".

Also specifically exempted from the provisions of Article 46 are B shares, H shares and I shares. The exemption may be a drafting error as these shares are not regulated by the Regulations.

Any legal person holding 5 per cent or more of the issued common shares of a listed company shall report this, in writing, to the relevant company, the securities exchange and the CSRC, and make a public announcement within three working days of such change in status. The same procedure must be followed if a legal person holds in excess of 5 per cent of the issued common shares of a listed company, and there is change in its shareholding of ?%. In either of these cases, the Regulations prohibit the legal person from directly or indirectly buying or selling the company's shares within two working days after the report and public announcement are made.

Disclosure
A listed company is required to submit to the CSRC and to the relevant stock exchange an Interim Report within 60 days after the first six months of a fiscal year, and an Annual Report within 120 days after the end of the fiscal year. Articles 58 and 59 contain detailed content requirements for the Interim Report and Annual Report, respectively.

Furthermore, a listed company is required to publicly announce and report to the relevant securities exchange and the CSRC, the nature of any "important event". Article 60 lists 13 events which fall into this category, including:

  • the signing of an important contract that would have a material impact on the assets, liabilities or results of the company;

  • material changes in the company's operating policy or business;

  • major investments or the purchase of high-value, long-term investments;

  • significant liabilities;

  • the failure to repay any major debt when it becomes due;

  • major operating or non-operating losses;

  • a material loss of assets;

  • a material change in the company's operating environment;

  • a significant impact on the company's operations resulting from new laws, regulations, policies or rules;

  • a change of chairman of the board of directors, the general manager or over 30 per cent of the directors;

  • the shareholding of any shareholder who already holds 5 per cent or more of the total issued common shares of the company changes by ± 2%;

  • major litigation involving the company; and

  • the entering into liquidation or bankruptcy proceedings.

Listed companies are also expected to publicly clarify any media report about the company that is deemed misleading and might reasonably be expected to affect its share price.

Dispute Settlement
It is a common policy in the major securities markets worldwide, that any dispute involving securities may be settled by way of litigation or other contentious methods for dispute settlement. The draft PRC Securities Law proposed by Professor Li Yining and his drafters also contains a provision allowing for litigation in securities disputes. The Regulations, however, provide only for the traditionally-preferred methods of dispute settlement in the PRC, that is, mediation and arbitration. Article 79 of the regulations stipulates that parties in a dispute involving the issuance and trading of shares may apply for mediation and arbitration by an arbitration body. Article 80, nevertheless, requires that disputes between securities dealers themselves, or those between securities dealers and the stock exchange, shall be settled through mediation and arbitration by the arbitration organ approved and established by the CSRC.

Implications
It is evident that the policy makers responsible for the regulation of PRC securities have taken into consideration international practices in drafting the Regulations; particularly those provisions dealing with the issue and trading of shares, takeovers and disclosure requirements. Nevertheless, until other relevant laws and regulations, have been enacted (eg, the National Company Law and the National Securities Law) together with other institutional developments, the efficient and smooth operation of the PRC securities markets may still be a long way off. The domain of dispute settlement, for example, may have to go beyond the traditional confines of arbitration, mediation and conciliation. This remains an area of major concern to overseas investors, especially institutional investors, who are accustomed to the contentious but speedy and inexpensive means of settling disputes through the court system.

 
 
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