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Securities Law of the People's Republic of China

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  • Time of issue:2012-07-04 23:28
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(Summary description) In order to regulate the issuance and trading of securities, protect the legitimate rights and interests of investors, maintain social economic order and social public interests, and promote the development of the socialist market economy, this law is formulated.

Securities Law of the People's Republic of China

(Summary description) In order to regulate the issuance and trading of securities, protect the legitimate rights and interests of investors, maintain social economic order and social public interests, and promote the development of the socialist market economy, this law is formulated.

  • Categories:Propaganda
  • Author:
  • Origin:
  • Time of issue:2012-07-04 23:28
  • Views:
Information

Chapter One   General Provisions

Chapter Two   Securities Issuance

Chapter Three   Securities Trading

Section 1 General Provisions

Section 2  Securities Listing

Section Three  Continuous Information Disclosure

Section 4 Prohibited trading activities

Chapter Four   Acquisition of listed companies

Chapter 5   Stock Exchange

Chapter VI   Securities Company

Chapter Seven   Securities Depository and Clearing Institution

Chapter 8   Securities Service Agency

Chapter 9   Securities Industry Association

Chapter X   Securities Regulatory Agency

Chapter 11   Legal Liability

Chapter Twelve   Supplementary Provisions

Chapter One   General Provisions

Article 1   In order to regulate the issuance and trading of securities, protect the legitimate rights and interests of investors, maintain social economic order and social public interests, and promote the development of the socialist market economy, this law is formulated.

Article 2 Within the territory of the People’s Republic of China, the issuance and trading of stocks, corporate bonds and other securities recognized by the State Council in accordance with the law shall be governed by this law; if not provided for in this law, the “Company Law of the People’s Republic of China” and other laws and administrative regulations shall apply. Regulations.

The listing and trading of government bonds and securities investment fund shares shall be governed by this law; if other laws and administrative regulations provide otherwise, their provisions shall apply.

The administrative measures for the issuance and trading of securities derivatives shall be formulated by the State Council in accordance with the principles of this law.

Article 3   Securities issuance and trading activities must follow the principles of openness, fairness and justice.

Article 4   The parties involved in securities issuance and trading activities shall have equal legal status and shall abide by the principles of voluntariness, compensation, honesty and credibility.

Article 5   Securities issuance and trading activities must comply with laws and administrative regulations; fraud, insider trading, and manipulation of the securities market are prohibited.  Article 6   The securities industry and the banking industry, trust industry, and insurance industry shall implement separate operation and separate management, and securities companies shall be established separately from banks, trust and insurance business institutions. Except as otherwise provided by the state.

Article 7   The State Council’s securities regulatory agency shall implement centralized and unified supervision and management of the national securities market in accordance with the law.

The State Council’s securities regulatory agency may, if necessary, set up dispatched offices to perform its supervisory and administrative duties as authorized.

Article 8   Under the premise that the state implements centralized and unified supervision and management of securities issuance and trading activities, a securities industry association shall be established in accordance with the law to implement self-discipline management.

Article 9   The state auditing agency shall conduct auditing supervision of stock exchanges, securities companies, securities registration and settlement institutions, and securities supervision and management institutions in accordance with the law.

Chapter 2   Securities Issuance

Article 10   Public issuance of securities must meet the conditions prescribed by laws and administrative regulations, and be submitted to the State Council’s securities regulatory agency or a department authorized by the State Council for approval in accordance with the law; no unit or individual may publicly issue securities without legal approval.

In any of the following circumstances, it is a public offering:

(1) Issuing securities to unspecified objects;

(2) A total of more than 200 people have issued securities to a specific target;

(3) Other issuance activities as required by laws and administrative regulations.

Non-public issuance of securities shall not use advertising, public solicitation, and disguised disclosure.

Article 11: If an issuer applies for the public issuance of stocks or corporate bonds that can be converted into stocks and adopts underwriting methods in accordance with the law, or the public issuance of other securities that are subject to the sponsorship system provided by laws and administrative regulations, it shall hire an institution with sponsorship qualifications to act as sponsor people.

Sponsors shall abide by business rules and industry regulations, be honest and trustworthy, diligent and conscientious, conduct prudent verification of the issuer’s application documents and information disclosure materials, and supervise the issuer’s standardized operations.

The qualifications of sponsors and their management measures shall be stipulated by the securities regulatory agency of the State Council.

Article 12 The establishment of a joint stock limited company to issue shares to the public shall meet the conditions stipulated in the "Company Law of the People's Republic of China" and other conditions stipulated by the State Council’s securities regulatory authority approved by the State Council, and submit a stock offering application and The following documents:

(1) Articles of Association;

(2) Promoter Agreement;

(3) The name of the promoter, the number of shares subscribed by the promoter, the type of capital contribution and the capital verification certificate;

(4) Prospectus;

(5) The name and address of the bank that collects funds;

(6) The name of the underwriting agency and related agreements.

If a sponsor is hired in accordance with the provisions of this Law, the sponsor shall also submit the issuance sponsorship letter issued by the sponsor.

If the laws and administrative regulations stipulate that the establishment of a company must be reported for approval, the corresponding approval documents shall also be submitted.

Article 13   A company that issues new shares to the public shall meet the following conditions:

(1) Have a sound and well-functioning organization;

(2) Have sustained profitability and good financial status;

(3) There is no false record in the financial accounting documents in the last three years, and no other major illegal acts;

(4) Other conditions as approved by the State Council’s securities regulatory agency.

The non-public issuance of new shares by a listed company shall meet the conditions prescribed by the State Council’s securities regulatory agency approved by the State Council and report to the State Council’s securities regulatory agency for approval.

Article 14  When a company issues new shares to the public, it shall submit a stock offering application and the following documents to the securities regulatory authority under the State Council:

(1) Company business license;

(2) Articles of Association;

(3) Resolutions of the general meeting of shareholders;

(4) Prospectus;

(5) Financial accounting report;

(6) The name and address of the bank that collects funds;

(7) The name of the underwriting agency and related agreements.

If a sponsor is hired in accordance with the provisions of this law, it shall also submit the issuance sponsorship letter issued by the sponsor.

Article 15  The funds raised by the company from the public offering of stocks must be used in accordance with the use of funds listed in the prospectus. To change the use of funds listed in the prospectus, a resolution must be made by the general meeting of shareholders. If the purpose is changed without authorization without correction, or without the approval of the general meeting of shareholders, no new shares shall be issued publicly.

Article 16   The public issuance of corporate bonds shall meet the following conditions:

(1) The net assets of a company limited by shares shall not be less than RMB 30 million, and the net assets of a limited liability company shall not be less than RMB 60 million;

(2) The accumulated bond balance does not exceed 40% of the company's net assets;

(3) The average distributable profit in the last three years is sufficient to pay the interest of the corporate bonds for one year;

(4) The investment of the funds raised is in line with the national industrial policy;

(5) The interest rate of the bond does not exceed the interest rate level set by the State Council;

(6) Other conditions stipulated by the State Council.

The funds raised from the public issuance of corporate bonds must be used for the approved purposes and must not be used to make up for losses and non-productive expenditures.

A listed company issuing corporate bonds that can be converted into stocks shall not only meet the requirements specified in the first paragraph, but also meet the requirements of this Law for the public issuance of stocks, and report to the securities regulatory authority of the State Council for approval.

Article 17   To apply for the public issuance of corporate bonds, the following documents shall be submitted to the department authorized by the State Council or the State Council’s securities regulatory agency:

(1) Company business license;

(2) Articles of Association;

(3) Corporate bond raising methods;

(4) Asset evaluation report and capital verification report;

(5) Departments authorized by the State Council or other documents required by the State Council’s securities regulatory agency.

If a sponsor is hired in accordance with the provisions of this Law, the sponsor shall also submit the issuance sponsorship letter issued by the sponsor.

Article 18   Under any of the following circumstances, no corporate bonds may be issued again:

(1) The corporate bonds issued in the previous public offering have not yet been fully raised;

(2) The fact that there is a default or delay in the payment of principal and interest on corporate bonds or other debts that have been publicly issued is still continuing;

(3) Violating the provisions of this law by changing the use of funds raised in the public issuance of corporate bonds.

Article 19   The format and method of submission of the application documents submitted by the issuer in applying for approval of the issuance of securities in accordance with the law shall be prescribed by the agency or department responsible for the approval in accordance with the law.

Article 20   The securities issuance application documents submitted by the issuer to the securities regulatory agency of the State Council or the department authorized by the State Council must be true, accurate and complete.

Securities service agencies and personnel who issue relevant documents for securities issuance must strictly perform statutory duties and ensure the authenticity, accuracy and completeness of the documents issued by them.

Article 21   When an issuer applies for an initial public offering of shares, after submitting the application documents, it shall disclose the relevant application documents in advance in accordance with the provisions of the securities regulatory authority of the State Council.

Article 22   The State Council’s Securities Regulatory Authority shall set up an issuance review committee to review stock issuance applications in accordance with the law.

The Issuance Review Committee is composed of professionals from the securities regulatory agency of the State Council and relevant experts hired by outside the agency to vote on stock issuance applications and provide review opinions.

The specific composition method, tenure of the members, and working procedures of the issuance review committee shall be prescribed by the securities regulatory authority of the State Council.

Article 23 The State Council's securities regulatory agency shall be responsible for approving stock issuance applications in accordance with statutory conditions. The approval procedure should be open and subject to supervision in accordance with the law.

Personnel involved in reviewing and approving stock issuance applications shall not have an interest in the issuance applicant, shall not directly or indirectly accept gifts from the issuance applicant, shall not hold the stocks of the approved issuance application, and shall not contact the issuance applicant privately.

The approval of the application for issuance of corporate bonds by the department authorized by the State Council shall refer to the provisions of the preceding two paragraphs.

Article 24 The securities regulatory agency of the State Council or the department authorized by the State Council shall, within three months from the date of accepting the securities issuance application documents, make a decision to approve or disapprove in accordance with statutory conditions and procedures. The time for supplementing or modifying the issuance application documents is not counted; if it is not approved, the reasons shall be explained.

Article 25   Upon approval of a securities issuance application, the issuer shall, in accordance with the provisions of laws and administrative regulations, announce the public offering documents before the public issuance of securities, and place the documents in designated places for public inspection.

Before the information on the issuance of securities is disclosed in accordance with the law, no insider shall disclose or divulge the information.

The issuer shall not issue securities before announcing the public offering documents.

Article 26   If the securities regulatory agency of the State Council or a department authorized by the State Council finds that the decision to approve the issuance of securities does not meet the statutory conditions or statutory procedures, and the securities have not been issued, it shall be revoked and the issuance shall be suspended. If the issuance has not been listed, the issuance approval decision shall be revoked, and the issuer shall return the securities holders according to the issue price plus the interest on bank deposits during the same period; the sponsor shall bear joint and several liabilities with the issuer, unless it can prove that it has no fault; the issuer If the controlling shareholder or actual controller is at fault, it shall bear joint liability with the issuer.   Article 27   After the issuance of stocks in accordance with the law, the issuer shall be responsible for the changes in its operations and income; the investors shall be responsible for the investment risks caused by such changes.

Article 28   If the securities issued by an issuer to an unspecified object shall be underwritten by a securities company according to laws and administrative regulations, the issuer shall sign an underwriting agreement with the securities company. The securities underwriting business adopts agency sales or underwriting methods.

Securities agency underwriting refers to the underwriting method in which a securities company sells securities on behalf of the issuer, and at the end of the underwriting period, all unsold securities are returned to the issuer.

Securities underwriting refers to the underwriting method in which the securities company purchases all the securities of the issuer in accordance with the agreement or purchases all remaining securities after the sale at the end of the underwriting period.

Article 29   Issuers that publicly issue securities have the right to independently select securities companies to underwrite in accordance with the law. Securities companies may not solicit securities underwriting business by means of unfair competition.

Article 30   When a securities company underwrites securities, it shall sign an agency or underwriting agreement with the issuer, stating the following items:

(1) The name, domicile and legal representative of the party concerned;

(2) The type, quantity, amount, and issue price of the securities sold on a commission or underwriting;

(3) The time limit and start and end dates of agency sales and underwriting sales;

(4) The payment method and date of agency sales and underwriting sales;

(5) Expenses and settlement methods for agency sales and underwriting sales;

(6) Liability for breach of contract;

(7) Other matters specified by the securities regulatory agency of the State Council.

Article 31 Securities companies underwriting securities shall check the authenticity, accuracy and completeness of the public offering documents; if false records, misleading statements or major omissions are found, they shall not conduct sales activities; if they have already been sold, Sales activities must be stopped immediately and corrective measures must be taken.

Article 32   If the total face value of securities issued to unspecified objects exceeds RMB 50 million, they shall be underwritten by an underwriting syndicate. The underwriting syndicate shall be composed of the lead underwriter and the securities companies participating in the underwriting.

Article 33   The maximum period of securities underwriting and underwriting shall not exceed 90 days.

During the period of consignment or underwriting, the securities company shall ensure that the securities it sells on consignment or underwriting shall be sold to subscribers in advance, and the securities company shall not reserve the securities for consignment for the company or purchase and keep the securities underwritten in advance.

Article 34   Where stocks are issued at a premium, the issue price shall be negotiated and determined by the issuer and the underwriting securities company.

Article 35  The stock issuance adopts the method of consignment, and the consignment period expires, and the number of shares sold to investors does not reach 70% of the number of shares to be issued publicly, the issuance has failed. The issuer shall return to the stock subscribers based on the issue price plus interest on bank deposits during the same period.

Article 36   When the time limit for public offering of stocks expires, the issuer shall report the issuance of stocks to the securities regulatory authority of the State Council for the record.

Chapter Three   Securities Trading

Section 1 General Provisions

Article 37   The securities bought and sold by the parties to a securities transaction must be securities issued and delivered in accordance with the law.

Securities not issued in accordance with the law shall not be bought or sold.

Article 38   The stocks, corporate bonds and other securities issued in accordance with the law shall not be sold or sold within the limited period if the law has restrictive provisions on their transfer period.

Article 39   The stocks, corporate bonds and other securities that are publicly issued in accordance with the law shall be listed and traded on a stock exchange established in accordance with the law or transferred at other securities trading venues approved by the State Council.

Article 40 The listing and trading of securities on a stock exchange shall be conducted in an open centralized trading method or other methods approved by the securities regulatory authority of the State Council.

Article 41   The securities bought and sold by the parties to a securities transaction may be in paper form or other forms prescribed by the securities regulatory authority of the State Council.

Article 42   Securities transactions shall be conducted in spot and other methods prescribed by the State Council.

Article 43   Stock exchanges, securities companies and securities registration

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