證券法英語版

證劵法

英文版

證劵

英文版《證券法》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 submittedas 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