Chapter V Securities Exchanges

　　Article 95 A securities exchange is a legal entity¹ that provides a trading site for centralized competitive bidding for securities with no purpose of profit-making.

　　Establishment and disbandment of a securities exchange shall be subject to the decision of the State Council.

　　Article 96 Articles of association must be formulated³ for the establishment of a securities exchange.

　　Formulation and revision of articles of association of a securities exchange must be subject to the approval of the securities supervision⁴ and administration institution under the State Council.

　　Article 97 A securities exchange must display expressly the words of securities exchange in its name. Any other unit or individual must not use the name of securities exchange or a similar name.

　　Article 98 The various revenues at the disposal of a securities exchange on its own should first be used to guarantee the normal operation and gradual improvement of the securities trading site and facilities.

　　The accumulation of a securities exchange belongs to its members, its rights and interests shall be shared jointly⁶ by the members, and the accumulation must not be distributed to the members during its existence.

　　Article 99 A securities exchange shall establish a board of directors.

　　Article 100 A securities exchange shall have a general manager who shall be appointed or relieved of his/her duties by the securities supervision and administration institution under the State Council.

　　Article 101 Whoever has the circumstances specified⁷ in Article 57 of the Company Law or any of the following circumstances shall not serve as the person-in-charge of a securities exchange:

　　(1)the person-in-charge of a securities exchange or a securities registration⁸ and settlement agency or a director, or a commissioner⁹ or a manager of a security company who was removed from office as a result of illegal acts or acts of violation¹⁰ of discipline for not more than 5 years starting from the date of removal from office; and

　　(2)a lawyer, a chartered accountant or a specialized¹¹ member of a legal asset assessment¹² agency or authentication¹³ agency whose qualification has been revoked¹⁵ as a result of illegal acts or acts of violation of discipline for not more than 5 years starting from the date of revocation¹⁶ of the qualification.

　　Article 102 An employee of a securities exchange, a securities registration and settlement agency or a security company and a functionary¹⁷ of a state organ who has been dismissed as a result of illegal acts or acts of violation of discipline shall not be employed as an employee of a securities exchange.

　　Article 103 Those that enter securities exchanges to participate in centralized competitive bidding in trading must be security companies with securities exchange membership.

　　Article 104 An investor¹⁸ should open an account for securities trading in a security company and entrust¹⁹ the security company that has opened an account for him/her/it to buy or sell securities on his/her/its behalf in writing, making telephone calls or in other forms.

　　An investor that buys or sells securities through the security company that has opened an account for him/her/it should adopt market price commission or limited price commission.

　　Article 105 A security company shall, in accordance with the entrustment²⁰ of an investor and the rule of time preference, file a trading application for participating in centralized bidding for trading on the trading floor of a securities exchange; a securities registration and settlement agency shall, on the basis of transaction results and pursuant to the rules of settlement and delivery, carry out settlement and delivery of securities and funds, and process the formalities of ownership transfer of securities registration.

　　Article 106 A security company that accepts entrustment or engages in self-operations must not sell the securities again on the day they are bought in.

　　Article 107 Securities exchanges should provide safeguards for organizing fair and centralized competitive bidding in trading, make public real-time quotations²¹ for securities trading, and make tabulated²² quotations for the securities market according to trading day and make an announcement thereof.

　　Article 108 Securities exchanges shall, pursuant to the provisions of laws and regulations, handle affairs of suspension of listing, resumption of listing or termination of listing of stocks and corporate²³ bonds. Specific measures shall be formulated by the securities supervision and administration institution under the State Council.

　　Article 109 A securities exchange may, in the event of an emergency that affects the normal process of securities trading, take technical measures of suspending the listing; a securities exchange may, in the event of an emergency by force majeure or for the purpose of maintaining normal order of securities trading, decide to temporarily suspend the market.

　　A securities exchange that takes technical measures of suspending the listing or a decision on temporary suspension of the market must submit a report to the securities supervision and administration institution under the State Council in time.

　　Article 110 Securities exchanges shall carry out real-time monitoring of the securities transactions going on in the exchanges and submit a report on the abnormal trading pursuant to the requirements of the securities supervision and administration institution under the State Council.

　　Securities exchanges should exercise supervision over information disclosure by the listed companies and supervise and urge the listed companies to disclose information timely and accurately²⁴ according to law.

　　Article 111 Securities exchanges should withdraw a certain percentage of amount of money from the trading charges, membership fees and seating fees collected by them for the establishment of a venture capital. The venture capital shall be administered by the board of directors of the securities exchanges.

　　Specific percentage to be withdrawn²⁵ from and measures for the use of the venture capital shall be laid down by the securities supervision and administration institution under the State Council in conjunction with the department of finance under the State Council.

　　Article 112 Securities exchanges should deposit the guaranty money for trading and venture capital collected and kept in a special account of a bank of deposit. and must not use them without authorization²⁷.

　　Article 113 Securities exchanges shall, pursuant to laws and administrative²⁸ regulations on securities, formulate² specific rules for centralized competitive bidding for securities trading, formulate rules for membership management of securities exchanges and business rules for employees of securities exchanges and submit them to the securities supervision and administration institution under the State Council for approval.

　　Article 114 The person-in-charge and other employees of a securities exchange should practise challenge in the discharge of duties relating to securities trading involving relations of interests of the person himself/herself or his/her relations.

　　Article 115 The transaction results for transactions concluded pursuant to the trading rules formulated according to law must not be changed. Civil liability to be borne by the trader who has violated rules in trading must not be absolved²⁹; benefits accrued³⁰ from trading against rules shall be dealt with pursuant to relevant provisions.

　　Article 116 Any person engaging in securities trading in a securities exchange violates the rules governing trading of a securities exchange shall be imposed disciplinary sanctions by the securities exchange; where the circumstances are serious, his/her qualification shall be revoked and he/she shall be prohibited from entering the trading place for securities trading.

　　Chapter VI Security Companies

　　Article 117 Establishment of a security company must be subject to the examination and approval of the securities supervision and administration institution under the State Council. No securities business operations shall be conducted without the approval of the securities supervision and administration institution under the State Council.

　　Article 118 A security company referred to in this Law means a limited liability company or a join-stock company limited engaging in securities business operations approved pursuant to the provisions of the Company Law and the provisions of the preceding Article.

　　Article 119 The state exercises classified administration over security companies which shall be classified into integrated security companies and brokerage security companies, and the securities supervision and administration institution under the State Council shall issue business licences according to the classification.

　　Article 120 A security company must expressly display the words of limited liability security company or joint⁵-stock security company limited in its name.

　　A securities brokerage company must expressly display the word of brokerage in its name.

　　Article 121 Establishment of an integrated security company must have the following qualifications:

　　(1)a minimum registered capital of RMB 500 million Yuan;

　　(2)its main administrators³² and business personnel must have qualifications for the securities profession;

　　(3)has a fixed³³ business site and qualified³⁴ trading facilites; and

　　(4)has sound and complete management rules and standardized³⁵ classified management systems for self-operated business and brokerage business.

　　Article 122 The minimum registered capital of a securities brokerage company shall be RMB 50 million Yuan; its main administrators and business personnel must have qualifications for the securities profession; it has a fixed business site and qualified trading facilities; and it has sound and complete management rules.

　　Article 123 Establishment or withdrawal³⁶ of branch(es), change in business scope or registered capital, change in articles of association, amalgamation³⁷, separation, change in the form of the company or disbandment of a security company must be subject to the approval of the securities supervision and administration institution under the State Council.

　　Article 124 The total amount of external liabilities of a security company must not exceed the prescribed multiple(times) of its amount of net assets; its total amount of floating liabilities must not exceed a certain percentage of the total amount of its floating assets; its specific multiple(times), percentage and control measures shall be worked out by the securities supervision and administration institution under the State Council.

　　Article 125 Whoever has the circumstance prescribed in Article 57 of the Company Law or any of the following circumstances shall not serve as a director, a commissioner or a manager of a security company:

　　(1)the person-in-charge of a securities exchange or a securities registration and settlement agency of a director, or a commissioner, or a manger of a security company who was relieved of the post for illegal acts or acts of violation of discipline for not more than 5 years starting from the date of relief of the post; and

　　(2)a lawyer, a chartered accountant or specialized personnel of legal asset assessment agency or authentication agency whose qualification was revoked for illegal acts or acts of violation of discipline for not more than 5 years starting from the date of revocation of the qualification.

　　Article 126 Employees of securities exchanges, securities registration and settlement agencies and security companies and functionaries³⁸ of state organs dismissed for illegal acts or acts of violation of discipline must not be employed as employees of security companies.

　　Article 127 Functionaries of state organs and other personnel whose holding of concurrent³⁹ posts in companies is prohibited by provisions of laws and administrative regulations must not take up concurrent positions in security companies.

　　Directors, commissioners⁴⁰, managers and business personnel of a security company must not take up concurrent positions in other security companies.

　　Article 128 Security companies shall withdraw trading risk reserve from the yearly after-tax profit for making up the losses in securities trading, specific percentage of the withdrawal shall be fixed by the securities supervision and administration institution under the State Council.

　　Article 129 An integrated security company may operate the following securities businesses:

　　(1)securities brokerage business;

　　(2)self-operated securities business;

　　(3)securities underwriting business; and

　　(4)other securities businesses verified and determined⁴¹ by the securities supervision and administration institution under the State Council.

　　Article 130 A securities brokerage company shall be permitted to specialize in securities brokerage business only.

　　Article 131 A security company should, pursuant to the business prescribed in the two preceding Articles, file a business scope application which shall be verified and determined by the securities supervision and administration institution under the State Council.

　　A security company must not operate securities businesses and other businesses beyond the verified and determined business scope.

　　Article 132 An integrated security company must handle its brokerage business and self-operated business separately, the business personnel and financial accounts should also be separated, and there must be no mixed operations.

　　The transaction settlement funds of clients must be deposited in full in a designated commercial bank and a separate account be opened for management. Diversion of clients' transaction settlement funds to other purposes shall be strictly⁴² prohibited.

　　Article 133 Bank funds shall be prohibited from flowing into stock markets in violation of regulations.

　　A security company must use its own funds and funds raised according to law in its self-operated business.

　　Article 134 The self-operated business of a security company must be conducted in its own name and must not be conducted under the cloak of other's name or in the name of an individual.

　　A security company must not lend its self-operations account to others for use.

　　Article 135 A security company has the right to autonomous⁴³ management according to law, its lawful⁴⁴ management shall be free from intervention⁴⁵.

　　Article 136 A security company whose registered capital is lower than that required for corresponding business prescribed by this Law shall be revoked of the verification and determination of its relevant business scope by the securities supervision and administration institution under the State Council.

　　Article 137 A security company engaging in intermediary business, buying and selling securities for clients as an agent in securities trading shall be a securities broker³¹ with legal personality.

　　Article 138 A security company must, in handling brokerage business, open separate securities accounts and fund accounts for clients and manage the securities and funds delivered by the clients on separate ledgers⁴⁶ according to each account, make truthful⁴⁷ records on transactions and must not make false records.

　　A client opening an account must hold lawful certification proving the identity of Chinese citizenship⁴⁸ or Chinese legal personality.

　　Article 139 A security company should, in handling brokerage business, prepare and place the uniformly printed letters of authority for buying and selling of securities for use by clients. Records on clientage must be made for the adoption⁴⁹ of other forms of clientage.

　　For authority by clients for buying and selling of securities, whether a transaction has been concluded or not, the record on its authority should be deposited at the security company in accordance with the specified time period.

　　Article 140 A security company that accepts the entrustment of buying and selling of securities should buy and sell securities by proxy⁵⁰ according to the trading rules on the basis of the names of the securities, amount of buying and selling, mode of offer price and price range; a report slip on the conclusion of buying and selling shall be prepared according to rules and handed over to the client on the conclusion of the buying and selling. The reconciliation⁵¹ sheet confirming the trading acts and its trading results in securities trading must be truthful and shall be examined and verified by an auditor⁵³ other than the consigner case by case to ensure the consistency⁵⁴ of the balance of securities in book account and the securities in actual possession.

　　Article 141 A security company that accepts entrustment to sell securities must be the securities actually in the securities account of a client and must not make an accommodation in securities trading for the client.

　　A security company that accepts entrustment to buy in securities must effect payment with the fund actually in the fund account of a client and must not arrange financing in trading for the client.

　　Article 142 A security company that handles brokerage business must not accept carte blanches⁵⁵ of a client and decide the buying and selling of securities, select types of securities and decide the quantity of buying and selling or price of buying and selling.

　　Article 143 A security company must not in any form make a commitment to a client on the returns of buying and selling of securities or compensation for the losses in buying and selling of securities.

　　Article 144 A security company and its employees must not accept the entrustment of a client to buy and sell securities in private without going through the location of business established according to law.

　　Article 145 For an employee of a security company who violates trading rules in securities trading operations according to the directive of the security company to which he/she belongs or by taking advantage of his/her position, the security company to which he/she belongs shall bear full responsibility.

　　Chapter VII Securities Registration and Settlement Agencies

　　Article 146 A securities registration and settlement agency provides centralized services in registration, trust and settlement for security transactions and constitutes a legal entity with no purpose of profit-making.

　　Establishment of a securities registration and settlement agency must be subject to the approval of the securities supervision and administration institution under the State Council.

　　Article 147 Establishment of a securities registration and settlement agency should have the following qualifications:

　　(1)its own capital shall be not less than RMB 200 million Yuan;

　　(2)it has a location and facilities necessary for securities registration, trust and settlement services;

　　(3)its main administrators and business personnel must have employment qualification for securities business; and

　　(4)other qualifications prescribed by the securities supervision and administration institution under the State Council.

　　The words of securities registration and settlement should be expressly displayed in the name of a securities registration and settlement agency.

　　Article 148 A securities registration and settlement agency shall perform the following functions:

　　(1)establishment of securities accounts and settlement accounts;

　　(2)trust and ownership transfer of securities;

　　(3)roster⁵⁶ registration of securities holders⁵⁸;

　　(4)settlement and delivery and receipt of listed securities transactions of securities exchanges;

　　(5)allotment and pay out of equity⁵⁹ entrusted⁶⁰ by issuers;

　　(6)handling of inquiries⁶¹ relating to the above-mentioned businesses; and

　　(7)other businesses approved by the securities supervision and administration institution under the State Council.

　　Article 149 Securities registration and settlement shall adopt centralized and uniform operational mode nationwide.

　　Articles of association and business rules of securities registration and settlement agencies should be formulated according to law and must be subject to the approval of the securities supervision and administration institution under the State Council.

　　Article 150 The securities held by a securities holder⁵⁷ should, prior to listing for trading, be put under trust in full at a securities registration and settlement agency.

　　A securities registration and settlement agency must not use the securities of a client for hypothecation⁶² or lending to others.

　　Article 151 A securities registration and settlement agency should provide a roster of securities holders and its relevant materials to the securities issuer.

　　A securities registration and settlement agency should, on the basis of the results of securities registration and settlement, confirm the fact of securities held by a securities holder and provide materials on the registration of the securities holder.

　　A securities registration and settlement agency should guarantee the truthfulness⁶³, accuracy and completeness of the roster of securities holders and records of ownership transfer registration and no forgery⁶⁴, tampering⁶⁵ with and destruction thereof shall be permitted.

　　Article 152 A securities registration and settlement agency should take the following measures to ensure normal business operations:

　　(1)it has essential services equipment and perfect data security protection measures;

　　(2)to establish sound and perfect business, financial and security and precaution and other management rules; and

　　(3)to establish a perfect risk management system.

　　Article 153 A securities registration and settlement agency should preserve the original vouchers⁶⁶ of registration, trust and settlement in a proper way. The period of safekeeping of important original vouchers shall not be less than 20 years.

　　Article 154 A securities registration and settlement agency should establish a settlement venture capital and deposit it in a rubricated account in a designated bank. The settlement venture capital shall be used for losses caused to the securities registration and settlement agency as a result of technical failure, mistakes in operations and force majeure.

　　The securities settlement venture capital shall be withdrawn from the business revenue and returns of the securities registration and settlement agency and may be paid by security companies according to a certain percentage of the business volume of securities trading.

　　Measures for the raising and administration of securities venture capital shall be formulated by the securities supervision and administration institution under the State Council in conjunction with the department of finance under the State Council.

　　Article 155 The securities settlement venture capital should be put under special-purpose administration.

　　Upon compensation with the venture capital by a securities registration and settlement agency, recourse of compensation should be sought from the responsible person involved.

　　Article 156 Application for disbandment of a securities registration and settlement agency should be subject to the approval of the securities supervision and administration institution under the State Council.

　　Chapter VIII Securities Trading Services Agencies

　　Article 157 Specialized securities investment consultancy agencies and credit appraisal⁶⁷ agencies may be established in accordance with the requirements of the securities investment and securities trading businesses. Conditions for the establishment of, procedures for examination and approval and business rules of securities investment consultancy agencies and credit appraisal agencies shall be formulated by the securities supervision and administration institution under the State Council.

　　Article 158 Business personnel of specialized securities investment consultancy agencies and credit appraisal agencies must have professional knowledge about securities and experiences of over 2 years in securities business. Standards for affirming the qualification for securities business and measures for management shall be formulated by the securities supervision and administration institution under the State Council.

　　Article 159 Employees of securities investment consultancy agencies must not commit the following acts:

　　(1)to engage in securities investment for a client as an agent;

　　(2)to agree with a client on the sharing of securities investment returns or sharing of securities investment losses;

　　(3)to buy or sell the stocks of the listed companies for which the consultancy agency provides services; and

　　(4)other acts prohibited under laws and regulations.

　　Article 160 Specialized securities investment consultancy agencies and credit appraisal agencies should, pursuant to the rates or measures for the collection of charges worked out by the departments of administration concerned under the State Council, collect service charges.

　　Article 161 Specialized agencies and personnel for drawing up such documents as the audit⁵² report, asset assessment report or legal advice for the issuance and listing of securities or securities trading operations must, pursuant to the working procedures prescribed in the employment rules, draw up the reports, and verify and authenticate⁶⁸ the truthfulness, accuracy and completeness of the contents of the reports drawn²⁶ up by them, and bear joint responsibility for the part(s) for which it/he/she is responsible.

　　Chapter IX Securites Industry Associations

　　Article 162 Securities industry associations are self-policing organizations of the securities industry and constitute juridical associations.

　　Security companies should join the securities industry association.

　　The general meeting of members composed of all the members constitutes the organ of power of the securities industry association.

　　Article 163 The articles of association of the securities industry association shall be formulated by the general meeting of members and submitted to the securities supervision and administration institution under the State Council for the record.

　　Article 164 The securities industry association performs the following duties and responsibilities:

　　(1)to assist securities supervision and administration institutions in the education and organization of members in implementing⁶⁹ laws and administrative regulations on securities;

　　(2)to safeguard the legitimate⁷⁰ rights and interests of members according to law and report the suggestions and requests of members to the securities supervision and administration institution;

　　(3)to gather and sort out securities information to provide services for the members;

　　(4)to formulate rules which the members should abide⁷¹ by, organize employees of member units in professional training and conduct business exchange among members;

　　(5)to mediate⁷² disputes among members and between members and clients;

　　(6)to organize members in carrying out research on the development, operation and relevant contents of the securities industry;

　　(7)to supervise and inspect acts of members and impose disciplinary sanctions on members pursuant to provisions for violation of laws, administrative regulations or articles of association of the association; and

　　(8)other duties and responsibilities vested by the securities supervision and administration institution under the State Council.

　　Article 165 The securities industry association shall set up a council. Members of the council shall be elected according to the provisions of the articles of association.

　　Chapter X Securities Supervision and Administration Institution

　　Article 166 The securities supervision and administration institution under the State Council exercises supervision and administration over the securities market, maintain the order of the securities market and ensure its lawful operation.

　　Article 167 The securities supervision and administration institution under the State Council shall, in the exercise of supervision and administration of the securities market, perform the following duties and responsibilities:

　　(1)to formulate rules and regulations governing securities market supervision and administration according to law and to exercise the power of examination and approval or of verification and approval according to law;

　　(2)to carry out supervision and administration of the issuance, trading, registration, trust and settlement of securities according to law;

　　(3)to exercise supervision and administration of securities business operations of securities issuers, listed companies, securities exchanges, security companies, securities registration and settlement agencies, securities investment fund administration agencies, securities investment consultancy agencies, credit appraisal agencies as well as law firms, accounting⁷³ firms and asset assessment agencies according to law;

　　(4)to formulate qualification standards and code of conduct for business personnel engaging in securities and supervise their implementation⁷⁴ according to law;

　　(5)to supervise and inspect the openness of information on securities issuance and trading according to law;

　　(6)to provide guidance for and supervision over activities of the securities industry associations according to law;

　　(7)to investigate and handle acts in violation of the laws and regulations governing supervision and administration of the securities market according to law; and

　　(8)other duties and responsibilities stipulated⁷⁵ in laws and regulations.

　　Article 168 The securities supervision and administration institution under the State Council has the power to adopt the following measures in performing its duties and responsibilities according to law:

　　(1)to enter a site of occurrence of illegal acts for investigation⁷⁶ and evidence gathering⁷⁷;

　　(2)to inquire the parties concerned, unit(s) and individual(s) concerned of the event under investigation, and ask them to make explanations of matters relating to the event under investigation;

　　(3)to look up, copy the records on securities transactions, records on ownership transfer registration, financial and accounting materials as well as other relevant documents and materials of the parties concerned and unit(s)and individual(s) concerned of the event under investigation, and may seal up those documents and materials that may be transferred or concealed⁷⁹ for safekeeping; and

　　(4)to investigate and make inquiry⁸⁰ of the fund accounts, securities accounts of the parties concerned and unit(s) and individual(s) concerned of the event under investigation, and an application may be filed with the judicial⁸¹ organ for the freezing of the illegal funds and securities when there is evidence to prove that there are signs of transfer or concealment⁸² thereof.

　　Article 169 Functionaries of the securities supervision and administration institution under the State Council shall, in performing their duties and responsibilities, in carrying out supervision and inspection⁸³ or investigation according to law, produce relevant ID cards, and have the obligation to keep the secrecy⁸⁴ of the commercial secrets of the unit(s)and individual(s) concerned they have come to know.

　　Article 170 Functionaries of the securities supervision and administration institution under the State Council must be devoted⁸⁵ to their duties, handle matters according to law, be impartial⁸⁶, honest and clean, and must not seek unlawful profits by taking advantage of their own positions.

　　Article 171 The securities supervision and administration institution under the State Council shall perform its duties and responsibilities according to law, the unit(s) and individual(s) under inspection and investigation should cooperate, truthfully provide relevant documents and materials, and must not refuse, obstruct⁸⁷ or conceal⁷⁸.

　　Article 172 The securities supervision and administration institution under the State Council shall make public rules and regulations and rules for supervision and administration work formulated according to law.

　　The securities supervision and administration institution under the State Council should make public penalty decision(s) taken on illegal acts in securities on the basis of the results of investigation.

　　Article 173 The securities supervision and administration institution under the State Council should, upon uncovering of illegal acts in securities suspected of commitment of a crime in the performance of its duties and responsibilities according to law, transfer the case to a judicial organ for handling.

　　Article 174 Functionaries of the securities supervision and administration institution under the State Council must not take up concurrent posts in institutions under its supervision and control.

　　Chapter XI Legal Liability

　　Article 175 Whoever issues securities without authorization or issues securities by fabricating false issuance documents without verification and approval or examination and approval of a legal organ shall be ordered to stop the issuance, refund⁸⁸ the funds raised and the additionally calculated bank deposit interests of the corresponding period, and concurrently⁸⁹ imposed a fine of more than 1% less than 5% of the amount of funds raised illegally. The person-in-charge directly responsible and other personnel directly responsible shall be administered a warning and concurrently imposed a fine of more than RMB 30000 Yuan less than RMB 300000 Yuan. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 176 A security company that underwrites or acts as a commission agent for the buying and selling of securities issued without authorization and without verification and approval or examination and approval shall be banned by the securities supervision and administration institution, confiscated⁹⁰ of the illegal income, and concurrently imposed a fine of more than 100% less than 500% of the illegal income. The person-in-charge directly responsible and other personnel directly responsible shall be administered a warning and concurrently imposed a fine of more than RMB 30000 Yuan less than RMB 300000 Yuan. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 177 Any issuer of securities verified and approved for listing for trading pursuant to the provisions of this Law who fails to disclose information in accordance with relevant provisions, or the information disclosed carries false recordings⁹¹, misleading statements or has major omissions⁹² shall be ordered by the securities supervision and administration institution to make a rectification⁹³ and the issuer shall be imposed a fine of more than RMB 300000 Yuan less than RMB 600000 Yuan. The person-in-charge directly responsible and other personnel directly responsible shall be administered a warning and concurrently imposed a fine of more than RMB 30000 Yuan less than RMB 300000 Yuan. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Any issuer of the preceding paragraph who fails to make an announcement of its listing documents or submit the relevant report on the specified time shall be ordered by the securities supervision and administration institution to make a rectification, and the issuer shall be imposed a fine of more than RMB 50000 Yuan less than RMB 100000 Yuan.

　　Article 178 Whoever illegally establishes a securities trading site shall be banned by the securities supervision and administration institution, confiscated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income. Where there is no illegal income, a fine of more than RMB 100000 Yuan less than RMB 500000 Yuan shall be imposed. The person-in-charge directly responsible and other personnel directly responsible shall be administered a warning and concurrently imposed a fine of more than RMB 30000 Yuan less than RMB 300000 Yuan. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 179 Whoever establishes a security company operating securities business without authorization and without approval and obtainment of a business license⁹⁴ shall be banned by the securities supervision and administration institution, confiscated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income. Where there is no illegal income, a fine of more than RMB 30000 Yuan less than RMB 100000 Yuan shall be imposed. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 180 Any of the personnel prohibited from participating in stock trading provided for in laws and regulations who holds or buys and sells stocks directly or by using an assumed name or under the cloak of another person's name shall be ordered to dispose of the illegally held stocks according to law, confiscated of the illegal income and concurrently imposed a fine of less than the equivalent value of the stocks bought or sold; whoever is a state functionary shall also be imposed administrative sanctions according to law.

　　Article 181 Any employee of a securities exchange, a security company, a securities registration and settlement agency, a securities trading services agency, any staff member of a securities industry association or a securities supervision and administration institution who induces and lures⁹⁵ investor(s)to buy or sell securities by deliberately⁹⁶ providing false materials, forging, altering or destroying trading records shall be revoked of his/her employment qualification and concurrently imposed a fine of more than RMB 30000 Yuan less than RMB 50000 Yuan; whoever is a state functionary shall also be imposed administrative sanctions. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 182 Any specialized agency or its member drawing up such documents as an audit report, an asset assessment report or a legal advice for the issuance or listing of stocks that buys and sells stocks in violation of the provisions of Article 39 of this Law shall be ordered to dispose of the illegally acquired stocks according to law, confisticated of the illegal income and concurrently imposed a fine of less than the equivalent value of the stocks bought and sold.

　　Article 183 Any insider of inside information on securities trading or any person illegally acquiring inside information on securities trading who. prior to information involving securities issuance, trading or other information having a major influence on securities price being made public, buys in or sells the said securities or discloses the said information or suggests others to buy or sell the said securities shall be ordered to dispose of the illegally obtained securities according to law, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income or less than the equivalent value of the securities bought and sold illegally. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Heavy penalty shall be imposed on any functionary of a securities supervision and administration institution for inside trading.

　　Article 184 Whoever obtains unjust profits or transfers risks by manipulating securities trading prices, or fabricating false prices for securities trading or false securities transaction volume in violation of the provisions of Article 71 of this Law shall be confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 185 Whoever diverts public money to buy and sell securities in violation of the provisions of this Law shall be confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income; whoever is a state functionary shall also be imposed administrative sanctions according to law. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 186 Any security company that sells for a client securities not actually in his/her/its account or buys in securities for a client through accommodation of funds in violation of the provisions of this Law shall be confisticated of the illegal income and concurrently imposed a fine of equivalent value of the illegally bought or sold securities. The person-in-charge directly responsible and other personnel directly responsible shall be administered a warning and concurrently imposed a fine of more than RMB 30000 Yuan less than RMB 300000 Yuan. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 187 Any security company that accepts the entrustment of a client or buys in securities in self-operations on the date of issue and again sells the said securities on the very day in violation of the provisions of this Law shall be confisticated of the illegal income and concurrently imposed a fine of more than 5% less than 20% of the total amount of transactions done in buying and selling of securities.

　　Article 188 Whoever fabricates and disseminates⁹⁷ false information influencing securities trading, disrupting the securities trading market shall be imposed a fine of more than RMB 30000 Yuan less than RMB 200000 Yuan. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 189 Any securities exchange, any security company, any securities registration and settlement agency, any securities trading services agency, any intermediary agency of society and any of its employees, or any securities industry association, the securities supervision and administration institution or any of its staff members that makes a false statement or provide information misguidance in securities trading operations shall be ordered to make a rectification and imposed a fine of more than RMB 30000 Yuan less than RMB 200000 Yuan; whoever is a state functionary shall also be imposed administrative sanctions according to law. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 190 Any legal entity that opens an account in the name of an individual for the buying and selling of securities in violation of the provisions of this Law shall be ordered to make a rectification, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income; its person-in-charge directly responsible and other personnel directly responsible who are state functionaries shall be imposed administrative sanctions.

　　Article 191 Any integrated security company that engages in self-operated businesses under the cloak of another person's name or in the name of an individual in violation of the provisions of this Law shall be ordered to make a rectification, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income; where there are serious circumstances, its self-operated businesses shall be terminated.

　　Article 192 Any security company that causes losses to a client for breach⁹⁸ of the entrustment of the client in buying and selling of securities, in handling trading matters and in handling other matters other than trading contrary to the indication of the real intention of the client shall bear responsibility for compensation according to law and concurrently be imposed a fine of more than RMB 10000 Yuan less than RMB 100000 Yuan.

　　Article 193 Any security company or securities registration and settlement agency and any of its employees who, without the entrustment of a client, buys and sells, diverts to other purposes or lends the securities in the client's account or use the client's securities for hypothecation, or diverts the funds in the client's account to other purposes shall be ordered to make a rectification, confisticated of the illegal income, and imposed a fine of more than 100% less than 500% of the illegal income, and shall be ordered to close down or revoked of the employment qualification certificate of the person responsible. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 194 Any security company handling brokerage business that accepts carte blanches of a client in buying and selling securities, or makes a commitment to the client on the returns on the buying and selling of securities or compensation for the losses in securities buying and selling shall be ordered to make a rectification and imposed a fine of more than RMB 50000 Yuan less than RMB 200000 Yuan.

　　Article 195 Whoever seeks unjust profits by taking advantage of the acquisition of a listed company in violation of the legal procedures for the acquisition of listed companies shall be ordered to make a rectification, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income.

　　Article 196 Any security company and any of its employees that accepts the entrustment of a client in private for the buying and selling of securities in violation of the provisions of this Law shall be confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income.

　　Article 197 Any security company that manages unlisted securities trading without approval in violation of the provisions of this Law shall be ordered to make a rectification, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income.

　　Article 198 A security company that fails to start business for more than 3 months without any justifiable⁹⁹ reason or close down on its own for more than 3 months in a row after opening for business upon establishment shall be revoked of the company's business licence by the company registration organ.

　　Article 199 Any security company that operates securities businesses beyond the business scope permitted in violation of the provisions of this Law shall be ordered to make a rectification, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income. Where there are serious circumstances, it shall be ordered to shut down.

　　Article 200 Any security company in simultaneous operations of securities brokerage business and self-managed securities business that fails to handle the businesses separately according to law and conduct mixed operations shall be ordered to make a rectification, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income; where there are serious circumstances, it shall be revoked of the securities businesses originally verified and determined by the securities supervision and administration institution.

　　Article 201 Whoever obtains securities business permit by deceitful means by presenting false certification documents or employing other fraudulent means to conceal important facts, or any security company that commits serious illegal acts in securities trading and is no longer qualified for the operations shall be revoked of its securities business permit and ordered to close down.

　　Article 202 Any specialized agency that draws up audit reports, asset assessment reports or legal advice for the issuance and listing of securities or for securities trading operations practises fraud in the contents for which it should have been responsible shall be confisticated of the illegal income, concurrently imposed a fine of more than 100% less than 500% of the illegal income, and the competent department concerned shall order the said agency to close down and revoke¹⁴ the qualification certificate of the person(s) directly responsible.

　　Article 203 Any securities registration and settlement agency or securities trading services agency established without authorization and without the approval of the securities supervision and administration institution shall be banned by the securities supervision and administration institution, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income.

　　Any securities registration and settlement agency and securities trading services agency that violates the provisions of this Law or the business rules uniformly formulated by the securities supervision and administration institution shall be ordered by the securities supervision and administration institution to make a rectification, confisticated of the illegal income and concurrently imposed a fine of more than 100% less than 500% of the illegal income. Where there are serious circumstances, it shall be ordered to close down.

　　Article 204 Any securities supervision and administration institution that verifies and approves an application for securities issuance and listing not in conformity¹⁰⁰ with the provisions of this Law, or approves an application for the establishment of a security company, a securities registration and settlement agency or securities trading services agency not in conformity with the qualifications provided for in this Law constituting serious circumstances, the person-in-charge directly responsible and other personnel directly responsible shall be imposed administrative sanctions according to law. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 205 Any functionary of the securities supervision and administration institution and any member on the issuance examination and verification committee who fails to fulfil the duties and responsibilities specified in this Law, indulges in malpractices for selfish gains, negligence¹⁰¹ of duty or deliberately making things difficult for the relevant parties interested shall be imposed administrative sanctions. Where a crime has been constituted, criminal liability shall be investigated according to law.

　　Article 206 Whoever issues or underwrites corporate bonds in violation of the provisions of this Law shall be imposed a penalty by the department authorized¹⁰² by the State Council pursuant to the provisions of Article 175, Article 176 and Article 202 of this Law.

　　Article 207 Whoever should bear civil liability for compensation and effect payment of a fine or penalty in violation of the provisions of this Law while his/her property is insufficient¹⁰³ to make simultaneous payment thereof shall bear civil liability for compensation first.

　　Article 208 Whoever obstructs¹⁰⁴ the securities supervision and administration institution in the exercise of its duties and responsibilities of supervision and inspection with violence and threat shall be investigated for criminal liability according to law; whoever refuses and obstructs the securities supervision and administration institution and its staff members in the exercise of the duties and responsibilities of supervision and inspection without resorting to violence and threat shall be imposed penalty pursuant to the provisions of the Regulations on Public Security Administration Penalties.

　　Article 209 The illegal income confisticated and fines from illegal acts of securities issuance and trading pursuant to this Law shall be handed over to the state treasury¹⁰⁵ in full.

　　Article 210 The party interested that refuses to obey the penalty decision of the securities supervision and administration institution or the department authorized by the State Council may apply for reconsideration according to law, or take legal action at a people's court directly according to law.

　　Chapter XII Supplementary¹⁰⁶ Provisions

　　Article 211 Securities the listing for trading of which at securities exchanges already approved pursuant to administrative regulations prior to the coming into force of this Law shall continue to be traded according to law.

　　Securities operating agencies the establishment of which was approved pursuant to the provisions of administrative regulations and the department of banking¹⁰⁷ administration under the State Council prior to the coming into force of this Law which are not in full conformity with the provisions of this Law should meet the specified requirements within the given time period. Specific measures for implementation shall be formulated by the State Council separately.

　　Article 212 Procedures for the implementation of provision governing the clients' transaction settlement funds of this Law shall be worked out by the State Council separately.

　　Article 213 Specific measures for the subscription¹⁰⁸ and trading of stocks of domestic companies in foreign currencies for overseas personages and institutions shall be formulated by the State Council separately.

　　Article 214 This Law shall enter into force as of July 1, 1999.

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