BIZCHINA / Finance
Securities Law of the People's Republic of China (revised in 2005)
Updated: 2006-04-18 08:56
Article 141 Upon accepting an entrustment of securities transaction, a
securities company shall, on the basis of the description of the
securities, trading volume, method of bidding, price band, etc. as
indicated in the power of attorney, undertake securities trading as an
agent according to the trading rules and make trading records in a
faithful manner. After a transaction is concluded, a securities company
shall, according to the relevant regulations, formulate a transaction
report and deliver it to the relevant clients. The statements in acheck
sheet that confirms trading acts and results in securities trading shall
be authentic. Such statements shall be subject to the examination of an
examiner, other than the relevant transaction handler, on a
transaction-by-transaction basis, so as to guarantee the consistency
between the balance of securities in book account and the securities as
actually held.
Article 142 Where a securities company provides any service of securities
financing through securities transactions for its client, it shall meet
the provisions of the State Council and shall be subject to the approval
of the securities regulatory authority under the State Council.
Article 143 A securities company that engages in brokerage operation may
not decide any purchase or sale of securities, class selection of
securities, trading volume or trading price on the basis of full
entrustment of its client.
Article 144 A securities company may not make a promise to its clients on
the proceeds as generated from securities transactions or on compensating
the loss as incurred from securities transactions by any means.
Article 145 A securities company and the practitioners thereof may not
privately accept any entrustment of its client for securities transaction
beyond its business place as established according to law.
Article 146 Where any practitioner of a securities company violates the
trading rules by implementing the instructions of his securities company
or taking advantage of his post in any securities trading, the relevant
securities company shall bear all the liabilities as incurred therefrom.
Article 147 A securities company shall keep the materials of its clients
regarding account opening, entrustment records, trading records and
internal management as well as business operation in a proper manner. No
one may conceal, forge, alter or damage the aforesaid materials. The term
for keeping the aforesaid materials shall be no less than 20 years.
Article 148 A securities company shall, according to the relevant
provisions, report the information and materials regarding operation and
management such as its business operation and financial status to the
securities regulatory authority under the State Council. The securities
regulatory authority under the State Council has the right to require a
securities company as well as the shareholders and actual controllers
thereof to provide the relevant information and materials within a
prescribed period. The information and materials as reported or provided
by a securities company and the shareholders and actual controllers
thereof to the securities regulatory authority under the State Council
shall be authentic, accurate and complete.
Article 149 The securities regulatory authority under the State Council
may, when believing it requires so, entrust an accounting firm or an
asset appraisal institution to carry out an auditing or appraisal on the
financial status, internal control as well as asset value of a securities
company. The specific measures thereof shall be formulated by the
securities regulatory authority under the State Council in collaboration
with the relevant administrative departments.
Article 150 Where the net capital or any other indicator of risk control
of a securities company fails to satisfy the relevant provisions, the
securities regulatory authority under the State Council shall order it to
correct in a prescribed period. Where a securities company fails to
correct within the prescribed period or any act thereof has injured the
sound operation of the securities company or has damaged the legitimate
rights and interests of its clients, the securities regulatory authority
under the State Council may take the following measures in light of
different circumstances:
(1) Restricting its business operation, ordering it to suspend some
business operations and stopping the approval of any new operation
thereof;
(2) Stopping the approval for establishing or taking over any business
branch;
(3) Restricting its distribution of dividends, restricting the payment
of remunerations to or provision of welfare for its directors,
supervisors or senior managers;
(4) Restricting any transfer of property or the setting of any other
right to its property;
(5) Ordering it to alter its directors, supervisors and senior managers
or restricting the right thereof;
(6) Ordering the controlling shareholders to transfer their stock right
or restricting its shareholders from exercising the shareholders' rights;
and
(7) Revoking the relevant business license. A securities company shall,
upon rectification, submit a report to the securities regulatory
authority under the State Council. The securities regulatory authority
under the State Council shall lift the relevant measures as prescribed in
the preceding paragraph herein within 3 days as of concluding the
relevant examination and acceptance of a securities company that has met
the requirements of risk control indicators upon examination and
acceptance.
Article 151 Where a shareholder of a securities company makes any fake
capital contribution or spirits away registered capital, the securities
regulatory authority under the State Council shall order him to correct
within the prescribed period and may order him to transfer the stock
rights of the securities company as held thereby. Before a shareholder as
prescribed in the preceding paragraph herein corrects his irregularity
and transfers the stock right of the securities company as held thereby
according to the relevant requirements, the securities regulatory
authority under the State Council may restrict the shareholders' rights
thereof.
Article 152 Where any director, supervisor or senior manager of a
securities company fails to fulfill his accountability in a diligent
manner and thus incurs any major irregularity or rule-breaking act or
major risk to his securities company, the securities regulatory authority
under the State Council may revoke the post-holding qualification thereof
and order his company to remove him from his post for alteration.
Article 153 Where any illegal operation of a securities company or any
major risk thereof seriously disturbs the order of the securities market
or injures the interests of the relevant investors, the securities
regulatory authority under the State Council may take such supervisory
measures as suspending its business for rectification, designating any
other institution for trusteeship, take-over or cancellation.
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