证券法 英文版 证券 法英文版新《证券法》英文版Securities Law of the People's Republic of China (revised in 2005) The Securities Law of the People's Republic of China, which was revised and adopted at the 18th Meeting of the Standing Committee of the 10th National People's Congress of the People's Republic of China on October 27, 2005 are hereby promulgate and shall be implemented as of January 1, 2006. President of the People's Republic of China, Hu Jintao October 27, 2005 Securities Law of the People's Republic of China (revised in 2005) (Adopted at the 6th Meeting of the Standing Committee of the 9th National People's Congress on December 29, 1998, revised at the 18th Meeting of the Standing Committee of the Tenth National People's Congress of the People's Republic of China on October 27, 2005 according to the Decision on Revising the Securities Law of the People's Republic of China as made at the 11th meeting of the Standing Committee of the 10th People's Congress on August 28, 2004) Contents Chapter I General Provisions Chapter II Issuance of Securities Chapter III Transaction of Securities Section I General Provisions Section II Listing of Securities Section III On-going Disclosure of Information Section IV Prohibited Trading Acts Chapter IV Acquisition of Listed Companies Chapter V Stock Exchanges Chapter VI Securities Companies Chapter VII Securities Registration and Clearing Institutions Chapter VIII Securities Trading Service Institutions Chapter IX Securities Industrial Association Chapter X Security Regulatory Bodies Chapter XI Legal Liabilities Chapter XII Supplementary Articles Chapter I General Provisions Article 1 The present Law is formulated for the purpose of regulating the issuance and transaction of securities, protecting the lawful rights and interests of investors, safeguarding the economic order and public interests of the society and promoting the growth of the socialist market economy. Article 2 The present Law shall be applied to the issuance and transaction of stocks, corporate bonds as well as any other securities as lawfully recognized by the State Council within the territory of the People's Republic of China. Where there is no such provision in the present Law, the provisions of the Corporation Law of the People's Republic of China and other relevant laws and administrative regulations shall be applied. Any listed trading of government bonds and share of securities investment funds shall be governed by the present Law. Where there is any special provision in any other law or administrative regulation, the special provision shall prevail. The measures for the administration of issuance and transaction of securities derivatives shall be prescribed by the State Council according to the principles of the present Law. Article 3 The issuance and transaction of securities shall adhere to the principles of openness, fairness and impartiality. Article 4 The parties involved in any issuance or transaction of securities shall have equal legal status and shall persist in the principles of free will, compensation and integrity and creditworthy. Article 5 The issuance and transaction of securities shall observe laws and administrative regulations. No fraud, insider trading or manipulation of the securities market may be permitted. Article 6 The divided operation and management shall be adopted by the industries of securities, banking, trust as well as insurance. The securities companies and the business organs of banks, trust and insurance shall be established separately, unless otherwise provided for by the state. Article 7 The securities regulatory authority under the State Council shall adopt a centralized and unified supervision and administration of the national securities market. The securities regulatory authority under the State Council may, in light of the relevant requirements, establish dispatched offices, which shall perform their duties and functions of supervision and administration upon the authorization. Article 8 Under the centralized and unified supervision and administration of the state regarding the issuance and transaction of securities, a securities industrial association shall be lawfully established, which shall adopt the self-regulating administration. Article 9 The auditing organ of the state shall carry out auditing supervision of stock exchanges, securities companies, securities registration and clearing institutions and securities regulatory bodies. Chapter II Issuance of Securities Article 10 A public issuance of securities shall satisfy the requirements of the relevant laws and administrative regulations and shall be reported to the securities regulatory authority under the State Council or a department upon authorizat ion by the State Council for examination and approval according to law. Without any examination and approval according to law, no entity or individual may make a public issuance of any securities. It shall be deemed as a public issuance upon the occurrence of any of the following circumstances:[page] (1) Making a public issuance of securities to non-specified objects; (2) Making a public issuance of securities to accumulatively more than 200 specified objects; or (3) Making a public issuance as prescribed by any law or administrative regulation. For any securities that are not issued in a public manner, the means of advertising, public inducement or public issuance in any disguised form may not be adopted thereto. Article 11 An issuer that files an application for public issuance of stocks or convertible corporate bonds by means of underwriting according to law or for public issuance of any other securities, to which a recommendation system is applied, as is prescribed by laws and administrative regulations, shall employ an institution with the qualification of recommendation as its recommendation party. A recommendation party shall abide by operational rules and industrial norms and, on the basis of the principles of being honesty, creditworthy, diligent and accountable, carry out a prudent examination of application documents and information disclosure materials of its issuers as well as supervise and urge its issuers to operate in a regulative manner. The qualification of the recommendation party as well as the relevant measures for administration shall be formulated by the securities regulatory authority under the State Council. Article 12 A public offer of stocks for establishing a stock-limited company shall satisfy the requirements as prescribed in the Corporation Law of the People's Republic of China as well as any other requirements as prescribed by the securities regulatory authority under the State Council, which have been approved by the State Council. An application for public offer of stocks as well as the following documents shall be reported to the securities regulatory authority under the State Council: (1) The constitution of the company; (2) The promoter's agreement; (3) The name or title of the promoter, the amount of shares as subscribed by the promoter, the category of contributed capital as well as the capital verification certification; (4) The prospectus; (5) The name and address of the bank that receives the funds as generated from the issuance of stocks on the behalf of the company; and (6) The name of the underwriting organization as well as the relevant agreements. In case a recommendation party shall be employed, as prescribed by the present Law, the Recommendation Letter of Issuance as produced by the recommendation party shall be submitted as well. In case the establishment of a company shall be reported for approval, as prescribed by laws and administrative regulations, the relevant approval documents shall be submitted as well. Article 13 An initial public offer (IPO) of stocks of a company shall satisfy the following requirements: (1) Having a complete and well-operated organization; (2) Having the capability of making profits successively and a sound financial status; (3) Having no false record in its financial statements over the latest 3 years and having no other major irregularity; and (4) Meeting any other requirements as prescribed by the securities regulatory authority under the State Council, which has been approved by the State Council. A listed company that makes any initial non-public offer of stocks shall satisfy the requirements as prescribed by the securities regulatory authority under the State Council, which have been approved by the State Council and shall be reported to the securities regulatory authority under the State Council for examination and approval. Article 14 A company that makes an IPO of stocks shall apply for public offer of stocks as well as the following documents to the securities regulatory authority under the State Council: (1) The business license of the company; (2) The constitution of the company; (3) The resolution of the general assemble of shareholders; (4) The prospectus; (5) The financial statements; (6) The name and address of the bank that receives the funds as generated from the public offer of stocks on the behalf of the company; and (7) The name of the underwriting institution as well as the relevant agreements. In case a recommendation party shall be employed, as prescribed by the present Law, the Recommendation Letter of Issuance as produced by the recommendation party shall be submitted as well. Article 15 The funds as raised through public offer of stocks as made by a company shall be used according to thepurpose as prescribed in the prospectus. Any alteration of the use of funds as prescribed in the prospectus shall be subject to a resolution of the general assembly of shareholders. In case a company fails to correct any unlawful alteration of its use of funds or where any alteration of its use of funds fails to be adopted by the general assembly of shareholders, the relevant company may not make any IPO of stocks. In the foregoing circumstance, a listed company may not make any non-public offer of stocks.[page] Article 16 A public issuance of corporate bonds shall satisfy the following requirements: (1) The net asset of a stock-limited company being no less than RMB 30 million yuan and the net asset of a limited-liability company being no less than RMB 60 million yuan; (2) The accumulated bond balance constituting no more than 40 % of the net asset of a company; (3) The average distributable profits over the latest 3 years being sufficient to pay the 1-year interests of corporate bonds; (4) The investment of raised funds complying with the industrial policies of the state; (5) The yield rate of bonds not surpassing the level of interest rate as qualified by the State Council; and (6) Meeting any other requirements as prescribed by the State Council. The funds as raised through public issuance of corporate bonds shall be used for the purpose as verified and may not be used for covering any deficit or non-production expenditure. The public issuance of convertible corporate bonds as made by a listed company may not only meet the requirements as provided for in paragraph 1 herein but also meet the requirements of the present Law on public offer of stocks, and shall be reported to the securities regulatory authority under the State Council for examination and approval. Article 17 With regard to an application for public issuance of corporate bonds, the following documents shall be reported to the department as authorized by the State Council or the securities regulatory authority under the State Council: (1) The business license of the company; (2) The constitution of the company; (3) The procedures for issuing corporate bonds; (4) An assent appraisal report and an asset verification report; and (5) Any other document as prescribed by the department as authorized by the State Council or by the securities regulatory authority under the State Council. In case a recommendation party shall be employed, as prescribed by the present Law, the Recommendation Letter of Issuance as produced by the recommendation party shall be submitted as well. Article 18 In any of the following circumstances, no more public issuance of corporate bonds may be carried out: (1) Where the corporate bonds as issued in the previous public issuance haven't been fully subscribed; (2) Where a company has any default on corporate bonds as publicly issued or on any other liabilities, or postpones the payment of the relevant principal plus interests, and such situation is still continuing; or (3) Where a company violates the present Law by altering the use of funds as raised through public issuance of corporate bonds. Article 19 The formats and reporting ways of application documents as reported by an issuer for examination and approval of securities issuance according to law shall be prescribed by the legally competent organ or department in charge of examination and approval. Article 20 The application documents for securities issuance as reported by an issuer to the securities regulatory authority under the State Council or the department as authorized by the State Council shall be authentic, accurate and integrate. A securities trading service institution and its staff that produces the relevant documents for securities issuance shall strictly perform its/his statutory duties and functions and guarantee the authenticity, accuracy and integrity of the documents as produced thereby. Article 21 Where an issuer files an application for an IPO of stocks, it shall, upon submitting the application documents, disclose the relevant application documents in advance according to the provisions of the securities regulatory authority under the State Council. Article 22 The securities regulatory authority under the State Council shall establish an issuance examination committee, which shall examine the applications for stock issuance according to law. The issuance examination committee shall be composed of the professionals from the securities regulatory authority under the State Council and other relevant experts from outside the said authority, adopt the means of voting for the determination of applications for stock issuance and set forth the opinions on examination. The specific formulation measures, tenure of members as well as work procedures of the issuance examination committee shall be formulated by the securities regulatory authority under the State Council. Article 23 The securities regulatory authority under the State Council shall take charge of the examination and approval of applications for stock issuance in light of the statutory requirements. The procedures for examination and approval shall be publicized and shall be subject to supervision according to law. The personnel participating in the examination and verification of stock issuance may not have any interest relationship with an issuance applicant, may not directly or indirectly accept any present of the issuance applicant, may not hold any stock as verified for issuance and may not have any private contact with an issuance applicant. The department as authorized by the State Council shall conduct the examination and approval of applications for issuance of corporate bonds by referring to the preceding 2 paragraphs herein.[page] Article 24 The securities regulatory authority under the State Council or the department as authorized by the State Council shall, within 3 months as of acceptance of an application for securities issuance, make an decision on approval or disapproval according to the statutory requirements and procedures, whereby the time for an issuer to supplement or correct its application documents for issuance according to the relevant requirements may not be calculated within the aforesaid term for examination and approval. In the event of disapproval, an explanation shall be given in writing. Article 25 Where an application for securities issuance has been approved, the relevant issuer shall, in accordance with the provisions of the relevant laws and administrative regulations, announce the relevant financing documents of public issuance before publicly issuing any securities and shall make the aforesaid documents available for public reference in designated places. Before the information of securities issuance is publicized according to law, no insider may publicize or indulge the relevant information. An issuer may not issue any securities before an announcement of the relevant financial documents of public issuance. Article 26 The securities regulatory authority under the State council or the department as authorized by the State Council shall, where finding any decision on approving securities issuance fails to comply with the relevant statutory requirements and procedures and if the relevant securities haven't been issued, revoke the decision on approval and terminate the issuance. As to any securities that have been issued but haven't been listed, the relevant decision on approval for issuance shall be revoked. The relevant issuer shall, according to the issuing price plus interests as calculated at the bank deposit rate for the corresponding period of time, return the funds to securities holders. A recommendation party shall bear the joint and several liabilities together with the relevant issuer, except for one who is able to prove his exemption of fault. Where any controlling shareholder or actual controller has any fault, he shall bear the joint and several liabilities together with the relevant issuer, Article 27 After a legal offer of stocks, an issuer shall be liable for any alteration of its operation or its profits by itself. The investment risk as incurred therefrom shall be borne by investors by themselves. Article 28 Where an issuer issues any securities to any non-specified object and if the said securities shall be underwritten by a securities company, as is provided for by laws and administrative regulations, the issuer shall conclude an underwriting agreement with a securities company. The forms of "sale by proxy" and "exclusive sale" shall be adopted for the underwriting operation of securities. The term "sale by proxy" refers to an underwriting form, whereby a securities company sells securities as a proxy of the relevant issuer and, upon the conclusion of the underwriting period, returns all the securities unsold to the relevant issuer. The term "exclusive sale" refers to an underwriting form, whereby a securities company purchases all of the securities of an issuer according to the agreement there between or purchases all of the residing unsold securities by itself upon the conclusion of the underwriting period. Article 29 An issuer that makes public issuance of securities has the right to select a securities company for underwriting according to law at its own will. A securities company may not canvass any securities underwriting business by any unjust competition means. Article 30 Where a securities company underwrites any securities, it shall reach an agreement with the relevant issuer on sale by proxy or exclusive sale, which shall indicate the following items: (1) The name, domicile as well as the name of the legal representative of the parties concerned; (2) The classes, quant ity, amount as well as issuing prices of the securities under sale by proxy or exclusive sale; (3) The term of sale by proxy or exclusive sale as well as the start-stop date; (4) The means and date of payment for sale by proxy or exclusive sale; (5) The expenses for and settlement methods of sale by proxy or exclusive sale; (6) The liabilities of breach; and (7) Any other matter as prescribed by the securities regulatory authority under the State Council. Article 31 A securities company that is engaged in the underwriting of securities shall carry out verification on the authenticity, accuracy and integrity of the financing documents of public issuance. Where any false record, misleading statement or major omission is found, no sales activity may be carried out. Where any securities have been sold out under the foregoing circumstances, the relevant sales activity shall be immediately terminated and measures for correction shall be taken. Article 32 Where the total face value of securities as issued to non-specified objects is beyond RMB 50 million yuan, the said securities shall be underwritten by an underwriting syndicate. An underwriting syndicate shall be composed of securities companies acting as principal underwriters and participant underwriters.[page] Article 33 The term for sale by proxy or exclusive sale may not exceed 90 days at the most. A securities company shall, within the term of sale by proxy or exclusive sale, guarantee the priority of the relevant subscribers in purchasing securities under sale by proxy or exclusive sale. A securities company may not reserve in advance any securities under sale by proxy thereby or purchase in advance and sustain any securities under exclusive sale thereby. Article 34 Where any stock is issued at a premium, the issuing price thereof shall be agreed on through negotiation of the relevant issuer and the securities company that is engaged in underwriting. Article 35 As to a public offer of stocks through sale by proxy, when the term of sale by proxy expires and if the quantity of stocks fails to reach 70 % of the planned quantity in a public offer, it shall be deemed as a failure. The relevant issuer shall return the issuing price plus interests as calculated at the bank deposit rate for the contemporary period of time to the subscribers of stocks. Article 36 In a public offer of stocks, when the term for sale by proxy or exclusive sale expires, an issuer shall report the information on stock issuance to the securities regulatory authority under the State Council for archival purpose within the prescribed time. Chapter III Transaction of Securities Section I General Provisions Article 37 The securities as purchased and sold by any party who is involved in any securities transaction shall be the securities that have been legally issued and delivered. No securities that have been illegally issued may be purchased or sold. Article 38 All stocks, corporate bonds or any other securities that have been legally issued, where there are any restrictive provisions of laws on the term of transfer thereof, may not be purchased or sold within the restrictive term. Article 39 All stocks, corporate bonds or any other securities that have been publicly issued according to law shall be listed in a stock exchange as legally established or in any other places for securities transaction as approved by the State Council. Article 40 The means of public and centralized transaction or any other means as approval by the securities regulatory authority under the State Council shall be adopted for listed trading of securities in stock exchanges. Article 41 The securities as purchased or sold by the parties involved in securities transaction may be in paper form or in any other form as approved by the securities regulatory authority under the State Council. Article 42 The securities transaction shall be carried out in the form of spot goods as well as any other form as prescribed by the State Council. Article 43 The practitioners in stock exchanges, securities companies as well as securities registration and clearing institutions, the functionary of securities regulatory bodies as well as any other personnel who have been prohibited by laws and administrative regulations from engaging in any stock transaction shall, within their tenures or the relevant statutory term, not hold or purchase or sold any stock directly or in any assumed name or in a name of any other person, nor may they accept any stocks from any other person as a present. Anyone, when becoming any person as prescribed in the preceding paragraph herein, shall transfer the stocks he has held according to law. Article 44 The stock exchanges, securities companies as well as securities registration and clearing institutions shall keep secre t for the accounts as opened for their clients according to law. Article 45 A securities trading service institution and the relevant personnel that produce such documents as auditing reports, asset appraisal reports or legal opinions for stock issuance may not purchase or sell any of the aforesaid stocks within the underwriting term of stocks or within 6 months as of the expiration of the underwriting term of stocks. Except for the provisions as prescribed in the preceding paragraph herein, a securities trading service institutions and the relevant personnel that produce such documents as auditing reports, asset appraisal reports or legal opinions for listed companies may not purchase or sell any of the aforesaid stocks within the period from the day when an entrustment of a listed company is accepted to the day when the aforesaid documents are publicized. Article 46 The charge for securities transaction shall be reasonable. The charging items, standards as well as methods shall be publicized. The charging items, standards and administrative measures of securities transaction shall be uniformly formulated by the relevant administrative department under the State Council. Article 47 Where any director, supervisor and senior manager of a listed company or any shareholder who holds more than 5% of the shares of a listed company, sells the stocks of the company as held within 6 months after purchase, or purchases any stock as sold within 6 months thereafter, the proceeds generated therefrom shall be incorporated into the profits of the relevant company. The board of directors of the company shall withdraw the proceeds. However, where a securities company holds more than 5% of the shares of a listed company, which are the residing stocks after sale by proxy as purchased thereby, the sale of the foregoing stocks may not be limited by a term of 6 months. Where the board of directors of a company fails to implement the provisions as prescribed in the preceding paragraph herein, the shareholders concerned have the right to require the board of directors to implement them within 30 days. Where the board of directors of a company fails to implement them within the aforesaid term, the shareholders have the right to directly file a litigation with the people's court in their own names for the interests of the company. Where the board of directors of a company fail to implement the provisions as prescribed in paragraph 1herein, the directors in charge shall bear the joint and several liabilities according to law.[page] Section II Listing of Securities Article 48 An application for the listing of any securities shall be filed with a stock exchange and shall be subject to the examination and approval of the stock exchange according to law and a listing agreement shall be reached by both parties. The stock exchanges shall, according to the decision of the department as authorized by the State Council, arrange the listing of government bonds. Article 49 As for an application for the listing of any stocks, convertible corporate bonds or any other securities, to which a recommendation system is applied, as prescribed by laws and administrative regulations, an institution with the qualification of recommendation shall be employed as the recommendation party. The provisions of paragraphs 2 and 3 of Article 11 of the present Law shall be applied to the recommendation party of listing. Article 50 A stock-limited company that files an application for the listing of its stocks shall satisfy the following requirements: (1) The stocks shall have been subject to the examination and approval of the securities regulatory authority under the State Council and shall have been publicly issued; (2) The total amount of capital stock shall be no less than RMB 30 million yuan; (3) The shares as publicly issued shall reach more than 25 % of the total amount of corporate shares; where the total amount of capital stock of a company exceeds RMB 0.4 billion yuan, the shares as publicly issued shall be no less than 10% thereof; and (4) The company may not have any major irregularity over the latest years and there is no false record in its financial statements. A stock exchange may prescribe the requirements of listing that are more strict than those as prescribed in the preceding paragraph herein, which shall be reported to the securities regulatory authority under the State Council for approval. Article 51 The state encourages the listing of corporate stocks that comply with the relevant industrial policies and fulfill the relevant requirements of listing. Article 52 With regard to an application for the listing of stocks, the following documents shall be reported to a stock exchange: (1) The listing report; (2) The resolution of the general assembly of shareholders regarding the application for the listing of stocks; (3) The constitution of the company; (4) The business license of the company; (5) The financial statements of the company for the latest years as audited by an accounting firm according to law; (6) The legal opinions as well as the Recommendation Letter of Listing; (7) The latest prospectus; and (8) Any other document as prescribed by the listing rules of the stock exchange. Article 53 Where an application for the listing of stocks has been subject to the examination and approval of a stock exchange, the relevant company that has reached a listing agreement thereon shall announce the relevant documents for stock listing within the prescribed period and shall make the said documents available for public reference in designated places. Article 54 A company that has reached a listing agreement may not only announce the documents as prescribed in the preceding Article herein but also announce the following items: (1) The date when the stocks have been approved to be listed in a stock exchange; (2) The name list of the top 10 shareholders who hold the largest number of shares in the company as well as the amount of stocks as held thereby; (3) The actual controller of the company; and (4) The names of the directors, supervisors and senior managers of the company as well as the relevant information on the stocks and bonds of the company as held thereby. Article 55 Where a listed company is in any of the following circumstances, the stock exchange shall decide to suspend the listing of its stocks: (1) Where the total amount of capital stock or share distribution of the company changes and thus, fails to meet the requirements of listing; (2) Where the company fails to publicize its financial status according to the relevant provisions or has any false record in its financial statements, which may mislead the investors; (3) Where the company has any major irregularity; (4) Where the company has been operating at a loss for the latest 3 consecutive year; or (5) Under any other circumstance as prescribed in the listing rules of the stock exchange. Article 56 Where a listed company is in any of the following circumstances, the stock exchange shall decide to terminate the listing of its stocks: (1) Where the total amount of capital stock or share distribution of the company changes and thus, fails to meet the requirements of listing, and where the company fails again to meet the requirements of listing within the period as prescribed by the stock exchange; (2) Where the company fails to publicize its financial status according to the relevant provisions or has any false record in its financial statements, and refuses to make any correction;[page] (3) Where the company has been operating at a loss for the latest 3 consecutive years and fails to gain profits in the year thereafter; (4) Where the company is dissolved or is announce bankruptcy; or (5) Under any other circumstance as prescribed in the listing rules of the stock exchange. Article 57 A company shall, when applying for the listing of corporate bonds, fulfill the following requirements: (1) The term of corporate bonds shall be more than 1 year; (2) The amount of corporate bonds to be actually issued shall be no less than RMB 50 million yuan; and (3) The company shall meet the statutory requirements for the issuance of corporate bonds when applying for the listing of its bonds. Article 58 A company shall, when filing an application for the listing of its corporate bonds, report the following documents to a stock exchange: (1) The listing report; (2) The resolution as adopted by the board of directors regarding the application for listing; (3) The constitution of the company; (4) The business license of the company; (5) The measures for financing through the issuance of corporate bonds; (6) The amount of corporate bonds to be actually issued; and (7) Any other document as prescribed in the listing rules of the stock exchange. With regard to an application for the listing of convertible corporate bonds, the Recommendation Letter of Listing as produced by the relevant recommendation party shall be reported. Article 59 Where an application for the listing of corporate bonds has been subject to the examination and approval of the stock exchange, the company that has reached a listing agreement thereon shall, within the prescribed period, announce its report on the listing of its corporate bonds as well as the relevant documents and make its application documents available for public reference in designated places. Article 60 After any corporate bonds are listed, where the relevant company is in any of the following circumstances , the stock exchange may decide to suspend the listing of its corporate bonds: (1) Where the company has any major irregularity; (2) Where the company has any major change and thus fails to meet the requirements for the listing of corporate bonds; (3) Where the funds as raised through the issuance of corporate bonds fail to be used according to the purpose as verified; (4) Where the company fails to perform its obligations according to the measures for financing through the issuance of corporate bonds; or (5) Where the company has been operating at a loss for the latest 2 consecutive years. Article 61 Where a company is in any of the circumstances as described in item (1) or (4) of the preceding Article herein and the consequences as incurred therefrom have been verified to be serious, or where a company is under any of the circumstances as described in any of item (2), (3), or (5) of the preceding Article herein and fails to eliminate the relevant consequence within a specified time limit, the stock exchange shall decide to terminate the listing of corporate bonds of the company. In case a company is dissolved or declared bankrupt, the stock exchange shall terminate the listing of corporate bonds thereof. Article 62 Any company, which is dissatisfied with a decision of a stock exchange on disapproving, suspending or terminating its listing, may file an application for a review with the review organ established by the stock exchange. Section III On-going Information Disclosure Article 63 The information as disclosed by issuers and listed companies according to law shall be authentic, accurate and integrate and may not have any false record, misleading statement or major omission. Article 64 As for the stocks that have been publicly issued upon the verification of the securities regulatory authority under the State Council or for the corporate bonds that have been publicly issued upon the verification of the department as authorized by the State Council according to law, the prospectus or the measures for financing through the issuance of corporate bonds shall be announced. In an IPO of stocks or corporate bonds, the relevant financial statements shall be announced as well. Article 65 A company whose shares or bonds have been listed for trading shall, within two months as of the end of the first half of each accounting year, submit to the securities regulatory authority under the State Council and the stock exchange a midterm report indicating the following contents and announce it: (1) The financial statements and business situation of the company; (2) The major litigation involving the company; (3) The particulars of any change concerning the shares or corporate bonds thereof as already issued; (4) The important matters as submitted to the general assembly of shareholders for deliberation; and (5) Any other matter as prescribed by the securities regulatory authority under the State Council. Article 66 A listed company whose shares or bonds have been listed for trading shall, within four months as of the end of each accounting year, submit to the securities regulatory authority under the State Council and the stock exchange an annual report indicating the following contents, and announce it:[page] (1) A brief account of the company's general situation; (2) The financial statement and business situation of the company; (3) A brief introduction to the directors, supervisors, and senior managers of the company well as the information regarding their shareholdings; (4) The information on shares and corporate bonds as already issued, including the name list of the top 10 shareholders who hold the largest numbers of shares in the company as well as the amount of shares as held thereby; (5) The actual controller of the company; and (6) Any other matter as prescribed by the securities regulatory authority under the State Council. Article 67 In the event of a major event that may considerably affect the trading price of a listed company's shares and that is not yet known to the investors, the listed company shall immediately submit a temporary report regarding the said major event to the securities regulatory authority under the State Council and the stock exchange and make an announcement to the general public as well, in which the cause, present situation and possible legal consequence of the event shall be indicated: The term "major event" as mentioned in the preceding paragraph herein refers to the following circumstances: (1) A major change in the business guidelines or business scope of the company; (2) A decision of the company on any major investment or major asset purchase; (3) An important contract as concluded by the company, which may have an important effect on the a ssets, liabilities, rights, interests or business achievements of the company; (4) Any incurrence of a major debt in the company or default on an overdue major debt; (5) Any incurrence of a major deficit or a major loss in the company; (6) A major change in the external conditions for the business operation of the company; (7) A change concerning directors, no less than one-third of supervisors or managers of the company; (8) A considerable change in the holdings of shareholders or actual controllers who each hold or control no less than 5% of the company's shares; (9) A decision of the company on capital decrease, merger, division, dissolution, or application for bankruptcy; (10) Any major litigation involving the company, or where the resolution of the general assembly of shareholders or the board of directors have been cancelled or announced invalid; (11) Where the company is involved in any crime, which has been filed as a case as well as investigated into by the judicial organ or where any director, supervisor or senior manager of the company is subject to compulsory measures as rendered by the judicial organ; or (12) Any other matter as prescribed by the securities regulatory authority under the State Council. Article 68 The directors and senor managers of a listed company shall subscribe their opinions for recognition in the periodic report of their company in written form. The board of supervisors of a listed company shall carry out an examination on the periodic report of its company as formulated by the board of directors and produce the relevant examination opinions in writing. The directors, supervisors and senior managers of a listed company shall guarantee the authenticity, accuracy and integrity of the information as disclosed by their listed company. Article 69 Where the prospectus, measures for financing through issuance of corporate bonds, financial statement, listing report, annual report, midterm report, temporary report or any information as disclosed that has been announced by an issuer or a listed company has any false record, misleading statement or major omission, and thus incurs losses to investors in the process of securities trading, the issuer or the listed company shall be subject to the liabilities of compensation. Any director, supervisor, senior manager or any other person of the issuer or the listed company directly responsible shall be subject to the joint and several liabilities of compensation, except for anyone who is able to prove his exemption of any fault. Where any shareholder or actual controller of an issuer or a listed company has any fault, he shall be subject to the joint and several liabilities of compensation together with the relevant issuer or listed company. Article 70 The information as prescribed by law to be disclosed shall be publicized through the media as designated by the securities regulatory authority under the State Council and shall, at the same time, be made available for public reference at the company's domicile and a stock exchange. Article 71 The securities regulatory authority under the State Council shall carry out supervision over annual reports, midterm reports, temporary reports of listed companies as well as their announcements, over the distribution or rationing of new shares of such listed companies and over the controlling shareholders and any other obligor of information disclosure of listed companies. The securities regulatory body, stock exchange, recommendation party or securities company involving in underwriting as well as the relevant personnel thereof shall, before an announcement is made by a company according to the provisions of the relevant laws and administrative regulations, divulge any content concerned before the announcement.[page] Article 72 Where a stock exchange decides to suspend or terminate the listing of any securities, it shall announce the decision in a timely manner and report it to the securities regulatory authority under the State Council for archival purpose. Section IV Prohibited Trading Acts Article 73 Any insider who has access to any insider information of securities trading or who has unlawfully obtained any insider information is prohibited from taking advantage of the insider information as held thereby to engage in any securities trading. Article 74 The insiders who have access to insider information of securities trading include: (1) Directors, supervisors, and senior managers of an issuer; (2) Shareholders who hold no less than 5% of the shares in a company as well as the directors, supervisors, and senior managers thereof, or the actual controller of a company as well as the directors, supervisors, and senior managers thereof; (3) The holding company of an issuer as well as the directors, supervisors, and senior man agers thereof; (4) The personnel who may take advantage of their posts in their company to obtain any insider information of the company concerning the issuance and transaction of its securities; (5) The functionary of the securities regulatory body, and other personnel who administer the issuance and transaction of securities pursuant to their statutory functions and duties; (6) The relevant personnel of recommendation institutions, securities companies engaging in underwriting, stock exchanges, securities registration and clearing institutions and securities trading service organizations; and (7) Any other person as prescribed by the securities regulatory authority under the State Council. Article 75 For the purpose of the present Law, the term "insider information" refers to the information that concerns the business or finance of a company or may have a major effect on the market price of the securities thereof and that hasn't been publicized in securities trading. The following information all falls into the scope of insider information: (1) The major events as prescribed in paragraph 2 of Article 62 of the present Law; (2) The plan of a company concerning any distribution of dividends or increase of capital; (3) Any major change in the company's equity structure; (4) Any major change in guaranty of the company's obligation; (5) Where the mortgaged, sold or discarded value of a major asset as involved in the business operation of the company exceeds 30 % of the said asset in a one-off manner; (6) Where any act as conducted by any director, supervisor or senior manager of the company may be rendered liabilities of major damage and compensation; (7) The relevant plan of a listed company regarding acquisition; and (8) Any other important information that has been recognized by the securities regulatory authority under the State Council as having a marked effect on the trading prices of securities. Article 76 Any insider who has access to insider information or has unlawfully obtained any insider information on securities trading may not purchase or sell the securities of the relevant company, or divulge such information, or advise any other person to purchase or sell such securities. Where there is any other provision of the present Law on governing the purchase of shares of a listed company by a natural person, legal person or any other organization who holds or holds with any other person not less than 5% of the company's shares by means of an agreement or any other arrangement, it shall prevail. Where any insider trading incurs any loss to investors, the actor shall be subject to the liabilities of compensation according to law. Article 77 Anyone is prohibited from manipulating the securities market by any of the following means: (1) Whether anyone, independently or in collusion with others, manipulates the trading price of securities or trading quantity of securities by centralizing the advantage in respect of funds, shareholding advantage or utilizing information advantage to trade jointly or continuously; (2) Where anyone collaborates with any other person to trade securities pursuant to the time, price and method as agreed upon in advance, thereby affecting the price or quantity of the securities traded; (3) Where anyone trades securities between the accounts under self-control, thereby affecting the price or quantity of the securities traded; or (4) Where anyone manipulates the securities market by any other means. Where anyone incurs any loss to investors by manipulating the securities market, the actor shall be subject to the liabilities of compensation according to law. Article 78 It is prohibited for state functionaries, practitioners of the news media as well as other relevant personnel concerned to fabricate or disseminate any false information, thereby seriously disturbing the securities market. It is prohibited for stock exchanges, securities companies, securities registration and clearing institutions, securities trading service institutions and the practitioners thereof, as well as the securities industry association, the securities regulatory body and their functionaries to make any false statement or give any misleading information in the activities of securities trading. The securities market information as disseminated by any media shall be authentic and objective. Any dissemination of misleading information is prohibited.[page] Article 79 It is prohibited for securities companies as well as their practitioners to commit any of the following fraudulent acts in the process of securities trading, which may injure the interests of their clients: (1) Violating the entrustment of its client by purchasing or selling any securities on the behalf; (2) Failing to provide a client with written co nfirmation of a transaction within the prescribed period of time; (3) Misappropriating the securities as entrusted by a client for purchase or sale, or the funds in a client's account; (4) Unlawfully purchasing or selling securities for its client without any authorization, or unlawfully purchasing or selling any securities in the name of a client; (5) Inveigling a client into making any unnecessary purchase or sale of securities in order to obtain commissions; (6) Making use of mass media or by any other means to provide or disseminate any false or misleading information to investors; or (7) Having any other act that goes against the true intention as expressed by a client and damages the interests thereof. Where anyone practices any trickery and thus incurs any loss to the relevant clients, the actor shall be subject to the liabilities of compensation according to law. Article 80 It's prohibited for any legal person to unlawfully make use of any other person's account to undertake any securities trading. It's prohibited for any legal person to lend its or any other's securities account. Article 81 The channel for capital to go into the stock market shall be broadened according to law. It's prohibited for any unqualified capital to go into the stock market. Article 82 It's prohibited for any person to misappropriate any public fund to trade securities. Article 83 The state-owned enterprises and state-holding enterprises that engage in any transaction of listed stocks shall observe the relevant provisions of the state. Article 84 When stock exchanges, securities companies, securities registration and clearing institutions, securities trading service organizations as well as their functionaries discover any prohibited activities in securities trading, they shall report such activities to the securities regulation body in time. Section V Acquisition of Listed Companies Article 85 An investor may purchase a listed company by means of tender offer or agreement as well as by any other legal means. Article 86 Where an investor, through securities trading at a stock exchange, comes to hold or holds with any other person 5 % of the shares as issued by a listed company by means of agreement or any other arrangement, the investor shall, within three days as of the date when such shareholding becomes a fact, submit a written report to the securities regulatory authority under the State Council and the stock exchange, notify the relevant listed company and announce the fact to the general public. Within the aforesaid prescribed period, the investor may not purchase or sell any more shares of the listed company. In case an investor holds or holds with any other person 5 % of the shares as issued by a listed company by means of agreement or any other arrangement, he shall, pursuant to the provisions of the preceding paragraph herein, make report and announcement of each 5% increase or decrease in the proportion of the issued shares of the said company he holds through securities trading at a stock exchange. Within the reporting period as well as two days after the relevant report and announcement are made, the investor may not purchase or sell any more shares of the listed company. Article 87 The written report and announcement as made according to the provisions of the preceding Article herein shall include the following contents: (1) The name and domicile of the shareholder; (2) The description and amount of the shares as held; and (3) The date on which the shareholding or any increase or decrease in the shareholding reaches the statutory percentage. Article 88 Where an investor holds or holds with any other person 30% of the stocks as issued by a listed company by means of agreement or any other arrangement through securities trading at a stock exchange and if the purchase is continued, he shall issue a tender offer to all the shareholders of the said listed company to purchase all of or part of the shares of the listed company. It shall be stipulated in a tender offer as issued to a listed company that, where the share amount as promised to be sold by the shareholders of the target company exceeds the scheduled amount of stocks for purchase, the purchaser shall carry out the acquisition according to the relevant percentage. Article 89 Before any tender offer is issued pursuant to the provisions in the preceding Article herein, the relevant purchaser shall submit a report on the acquisition of a listed company to the securities regulatory authority under the State Council beforehand, which shall indicate the following items:[page] (1) The name and domicile of the purchaser; (2) The decision of the purchaser on acquisition; (3) The name of the target listed company; (4) The purpose of acquisition; (5) The det ailed description of the shares to be purchased and the amount of shares to be purchased in schedule; (6) The term and price of the acquisition; (7) The amount and warranty of the funds as required by the acquisition; and (8) The proportion of the amount of shares of the target company as held by the purchaser in the total amount of shares of the target company as issued, when the report on the acquisition of the listed company is reported. A purchaser shall concurrently submit to the stock exchange a report on the acquisition of the relevant company. Article 90 A purchaser shall, after 15 days as of the day when the report on the acquisition of a listed company is submitted pursuant to the preceding Article herein, announce its tender offer. Within the aforesaid term, where the securities regulatory authority under the State Council finds that any report in the acquisition of a listed company fails to satisfy the provisions of the relevant laws and administrative regulations, it shall notify the relevant purchaser in a timely manner. The relevant purchaser may not announce its tender offer. The term for acquisition as stipulated in a tender offer shall be not less than 30 days but not more than 60 days. Article 91 Within the acceptance term as prescribed in a tender offer, no purchaser may revoke its tender offer. Where a purchaser requests for altering its tender offer, it shall submit a report to the securities regulatory authority under the State Council and the stock exchange in advance and announce the alteration upon the approval thereby. Article 92 All the terms of acquisition as stipulated in a tender offer shall apply to all the shareholders of a target company. Article 93 In the event of an acquisition by tender offer, a purchaser shall, within the term for acquisition, not sell any share of the target company, nor shall it buy any share of the target company by any other means that hasn't been stipulated by provisions of its tender offer or that oversteps the terms as stipulated in its tender offer. Article 94 In the event of an acquisition by agreement, a purchaser may carry out share transfer with the shareholders of the target company by means of agreement according to the provisions of the relevant laws and administrative regulations. In the case of an acquisition of a listed company by agreement, a purchaser shall, within three days after the acquisition agreement is reached, submit a written report on the acquisition agreement to the securities regulatory authority under the State Council and the stock exchange as well as announce it to the general public. No acquisition agreement may be performed before the relevant announcement. Article 95 In the event of an acquisition by agreement, both parties to the agreement may temporarily entrust a securities registration and clearing institution to keep the stocks as transferred and deposit the relevant funds in a designated bank. Article 96 In the event of an acquisition by agreement, where a purchaser has purchased, held or held with any other person 30% of the shares as issued by a listed company through agreement or any other arrangement and if the acquisition is continued, the purchaser shall issue an offer to all of the shareholders of the target listed company for purchasing all of or part of the company's shares, unless a tender offer is been exempted from being issued by the securities regulatory authority under the State Council. A purchaser that purchases the shares of a listed company by means of tender offer according to the provisions of the preceding paragraph herein shall abide by the provisions of Articles 89~93 of the present Law. Article 97 Upon the expiration of a term for acquisition, where the share distribution of an target company fails to fulfill the requirements of listing, the listing of stocks of the said listed company shall be terminated by the stock exchange according to law. The shareholders that still hold the shares of the target company have the right to sell their shares pursuant to the equal terms as stipulated in the relevant tender offer. The purchaser shall make the purchase. When an acquisition is concluded, if a target company fails to meet the requirements of being a stock-limited company any more, its form of enterprise shall be altered according to law. Article 98 In an acquisition of a listed company, the stocks of the target company as held by a purchaser may not be transferred within 12 months after the acquisition is concluded. Article 99 When an acquisition is concluded, if the purchaser merges with the target company by dissolving the target company, the original shares of the company as dissolved shall be changed by the purchaser according to law. Article 100 Where an acquisition is concluded, a purchaser shall, within 15 days, report the acquisition to the securities reg[page] ulatory authority under the State Council and the stock exchange as well as announce it. Article 101 The purchase of the shares of a listed company as held by an organization that has been authorized by the state for investment shall be subject to the approval of the relevant administrative departments according to the provisions of the State Council. The securities regulatory authority under the State Council shall formulate the specific measures for acquisition of listed companies in light of the principles of the present Law. Chapter V Stock Exchanges Article 102 For the purpose of the present Law, the term "stock exchange" refers to a legal person that provides the relevant place and facilities for concentrated securities trading, organizes and supervises the securities trading and applies a self-regulating administration. The establishment and dissolution of a stock exchange shall be subject to the decision of the State Council. Article 103 A constitution shall be formulated for the establishment of a stock exchange. The formulation and revision of the constitution of a stock exchange shall be subject to the approval of the securities regulatory authority under the State Council. Article 104 The words "stock exchange" shall be indicated in the name of a stock exchange. No other entity or individual may use the name of "stock exchange" or an identical name. Article 105 The income that is at the discretion of a stock exchange, as generated from various commissions, shall first be used to guarantee the normal operation of the place and facilities of the stock exchange as well as the gradual improvement thereof. The gains as accumulated by a stock exchange that adopts a membership system shall belong to its members. The rights and interests of a stock exchange shall be jointly shared by its members. No accumulated gains of a stock exchange may be distributed to any member within the holding term. Article 106 A stock exchange shall have a council. Article 107 There shall be a general manager in a stock exchange, who shall be subject to the appointment and dismissal of the securities regulatory authority under the State Council. Article 108 Anyone, under the circumstance as prescribed in Article 147 of the Corporation Law of the People's Republic of China or under any of the following circumstances, may not assume the post of person-in-charge of a stock exchange: (1) Where a person-in-charge of a stock exchange or securities registration and clearing institution or any director, supervisor or senior manager of a securities company who has been removed from his post for his irregularity or disciplinary breach and if it has been within 5 years as of the day when he is removed from his post; or (2) Where a professional of a law firm, accounting firm or investment consulting organization, financial advising organization, credit rating institution, asset appraisal institution or asset verification institution who has been disqualified for his irregularity or disciplinary breach and if it' has been within 5 years as of the day when he is removed from his post. Article 109 A practitioner of a stock exchange, securities registration and clearing institution, securities trading service organization or securities company or any functionary of the state organ, who has been dismissed for his irregularity or disciplinary breach, may not be employed as a practitioner of a stock exchange. Article 110 Only a member of a stock exchange may enter into a stock exchange to engage in the centralized trading of securities. Article 111 An investor shall conclude an entrustment agreement with a securities company on securities trading, open an account of securities trading in a securities company and entrust the securities company to purchase or sell securities on the behalf in writing, by telephone or any other means. Article 112 A securities company shall, based on the entrustment of its investors, declare orders and engage in the centralized trading at a stock exchange according to the rules of securities trading and shall, based on trading results, bear the relevant liabilities of settlement and delivery. A securities registration and clearing institution shall, on the basis of trading results and according to the rules of settlement and delivery, conduct settlement and delivery of securities and capital with the relevant securities company and handle the formalities of transfer registration of securities for clients of the relevant securities company. Article 113 A stock exchange shall guarantee a fair centralized trading, announce up-to-the-minute quotations of securities trading, formulate the quotation tables of the securities market on the basis of trading days as well as announce it. Without permission of a stock exchange, no entity or individual may announce any up-to-the-min ute quotations of securities trading. Article 114 Where any normal trading of securities is disturbed by an emergency, a stock exchange may take the measures of a technical suspension of trading. In the event of an emergency of force majeure or with a view to preserving the normal order of securities trading, a stock exchange may decide a temporary speed bump. Where a stock exchange adopts the measure of a technical suspension of trading or decides a temporary speed bump, it shall report it to the securities regulatory authority under the State Council in a timely manner.[page] Article 115 A stock exchange shall exercise a real-time monitoring of securities trading and shall, according to the requirements of the securities regulatory authority under the State Council, report any abnormal trading thereto. A stock exchange shall carry out supervision over the information as disclosed by a listed company or the relevant obligor of information disclosure, supervise and urge it/him to disclose information in a timely and accurate manner according to law. A stock exchange may, when it requires so, restrict the trading through a securities account where there is any major abnormal trading and shall report it to the securities regulatory authority under the State Council for archival filing. Article 116 A stock exchange shall withdraw a certain proportion of funds from the transaction fees, membership fees and seat fees as charged thereby to establish a risk fund. The risk fund shall be subject to the administration of the council of the stock exchange. The specific withdrawal proportion and use of risk fund shall be provided for by the securities regulatory authority under the State Council in collaboration with the fiscal department of the State Council. Article 117 A stock exchange shall deposit its risk fund into a special account of its opening bank and may not unlawfully misuse it. Article 118 A stock exchan