发布文号: Decree No. 112 of the State Council of the People's Republic of China
（Promulgated by Decree No. 112 of the State Council of the People's Republic of China on April 22， 1993 and effective as of the same date）
Chapter I General Provisions
Article 1 These Regulations have been formulated in order to suit the needs of the development of the socialist market economy， to establish and develop a uniform and efficient national share market， to protect the lawful interests of investors and the public interest of the society at large and to promote the development of the national economy.
Article 2 All issuance or trading of shares and related activities within the territory of the People's Republic of China must abide by these Regulations.
The provisions of these Regulations concerning shares shall apply to securities that have the nature or function of shares.
Article 3 The issuance and trading of shares shall comply with the principles of openness， fairness， and credit-worthiness.
Article 4 Shares shall be issued and traded so as to preserve the leading position of socialist public ownership and so as not to endanger state-owned assets.
Article 5 The State Council Securities Commission （hereinafter referred to as “SCSC”） shall be the agency in charge of the national securities market and shall be responsible for the unified administration of securities markets throughout China in accordance with the provisions of laws and regulations. The China Securities Supervisory and Regulatory Commission （hereinafter referred to as “CSSRC”） shall be the supervising and administering agency of the SCSC and supervise specific activities relating to the issuance and trading of securities in accordance with the provisions of laws and regulations.
Article 6 Specific measures with respect to the issuance and trading of special Renminbi denominated shares shall be formulated separately.
A domestic enterprise must obtain approval from the SCSC before it directly or indirectly issue shares abroad or has its shares traded abroad. Specific measures with respect thereto shall be formulated separately.
Chapter II Issuance of Shares
Article 7 Only companies limited by shares qualified to issue shares may issue shares.
Companies limited by shares referred to in the preceding paragraph include both already established companies limited by shares and companies limited by shares that have obtained approval but yet to be established.
Article 8 To establish a company limited by shares and to apply for the issue of shares to the public， the following conditions must be satisfied：
1. Its production and operations are in compliance with the industrial policies of the state；
2. Only one class of common shares are to be issued， with equal rights attaching to the same shares；
3. Shares subscribed for by promoters shall not represent less than 35% of the total capital that the company intends to issue；
4. Of the total amount of capital that the company intends to issue， the promoters shall subscribe not less than Renminbi 30，000，000 yuan， except where national regulations provide otherwise；
5. The shares to be offered to the public shall represent not less than 25% of the total amount of capital that the company intends to issue， and the amount of capital that employees of the company subscribe for shall not exceed 10% of the total amount of capital to be offered to the public； where the total amount of capital that the company intends to issue exceeds Renminbi 400，000，000 yuan， the CSSRC may， in accordance with relevant provisions and the circumstances， reduce the proportion to be offered to the public， provided， however， that the amount issued to the public shall not be less than 10% of the total amount of capital that the company plans to issue；
6. The promoters have not engaged in serious illegal activities in the prior three years；
7. Other conditions that the SCSC may impose.
Article 9 If an existing enterprise that is to be restructured as a company limited by shares applies to issue shares to the public， it shall meet the following conditions in addition to those enumerated under Article 8：
1. At the end of the year preceding the issuance， net assets shall account for at least 30% of the total assets， intangible assets shall be not more than 20% of the total assets， except where the SCSC provides otherwise； and
2. It shall have shown a profit in each of the most recent three consecutive years.
If an existing state-owned enterprise is to be restructured as a company limited by shares and issue shares to the public， the proportion of the state-owned capital to the total amount of capital that the company proposes to issue shall be provided for by the State Council or a department authorized by the State Council.
Article 10 A company limited by shares that applies to issue shares to the public for the purpose of increasing its capital shall meet the following conditions in addition to those enumerated in Article 8 and 9 hereof：
1. The proceeds raised from any immediately preceding public issuance of shares shall have been used in compliance with the description in the prospectus concerning the use of proceeds and the use of such proceeds shall have obtained satisfactory results；
2. Not less than twelve months shall have elapsed since the preceding public issuance of shares；
3. There shall have been no serious illegal activities during the period from the preceding public issuance of shares to the subject application； and
4. Other conditions that the SCSC may impose.
Article 11 A company that has raised capital by private placement that applies to issue shares to the public shall meet the following conditions in addition to those enumerated in Article 8 and 9 hereof：
1. The funds raised by private placement shall have been used in compliance with the description in the prospectus concerning the use of proceeds and the use of such proceeds shall have obtained satisfactory results；
2. Not less than twelve months shall have elapsed since the preceding private placement of shares；
3. There shall have been no serious illegal activities during the period from the preceding placement of shares to the subject application；
4. Stock purchase warrants for staff and employees shall have been distributed in accordance with the prescribed scope by the state and in centralized custody of the securities dealing institution prescribed by the state； and
5. Other conditions that the SCSC may impose.
Article 12 An application to issue shares to the public shall be made in accordance with the following procedure：
1. The applicant shall retain professionals such as an accounting firm， an asset valuation institution and a law firm， to review and evaluate its credit history， assets and financial status and to issue legal opinions with respect to related matters. Thereafter， it shall， in accordance with the applicable jurisdiction， file an application to issue shares to the public with the People's Governments of the province， autonomous region， municipality directly under the Central Government or municipality listed separately under State plan （hereinafter referred to as the “Local Governments”）， or with the department in charge of central enterprises；
2. Within the scope of permitted share issuances designated by the state， Local Governments shall review for approval share issuance applications of local enterprises and the departments in charge of central enterprises shall review for approval the applications of central enterprises after consultation with the Local Government of the place where the applicant is located； the Local Government or the department in charge of central enterprises shall， within thirty business days of the receipt of the shares issuance application， render a decision after review and shall send a copy of the decision to the SCSC；
3. The approved issuance application shall be submitted to the CSSRC for review. The CSSRC shall issue an opinion within twenty business days of its receipt of the review application and a copy of the CSRC opinion shall be transmitted to the SCSC. If approval is granted by the CSSRC after review， the applicant shall file an application with the listing commission of the relevant securities exchange. The shares may be issued only after the relevant listing commission has agreed to the listing of the applicant's shares.
Article 13 Applicants seeking to issue shares to the public shall submit the following documents to the Local Government（s） or the department（s） in charge of central enterprises：
1. an application report；
2. resolutions of the promoters' or shareholders' general meeting approving the issuance of shares to the public；
3. approval documentation with respect to the establishment of the company limited by shares；
4. the business license of the company limited by shares or a registration certificate evidencing the subscription for and establishing of the company limited by shares， issued by the administration for industry and commerce；
5. the articles of association or the draft articles of association of the company；
6. the share prospectus；
7. a feasibility study concerning the use of proceeds； in the case of the fixed asset investment project requiring state provided capital or other conditions， an approval document from the relevant department of the state evidencing agreement with the capital investment project proposal shall also be submitted；
8. audited financial statements for the most recent three years or the period since its establishment accompanied by an audit report signed by more than two certified accountants （in addition to the auditing firm） and sealed by the respective firm；
9. a written legal opinion signed by more than two lawyers and sealed by the respective law firm of such lawyers；
10. an asset valuation report signed by more than two professional appraisers and sealed by the respective institution of such appraisers and a verification report signed by more than two certified accountants and sealed by the respective accounting firm of such accountants； if state-owned assets are involved， a confirmation document issued by the administrative department in charge of state-owned assets shall also be furnished；
11. the proposed share distribution and the distribution agreement；
12. other documents that the Local Governments or the departments in charge of central enterprises may require.
Article 14 When the approved share issuance application is submitted to the CSSRC for review， the following documents shall be submitted in addition to those enumerated in Article 13 hereof：
1. the document of the Local Government or the department in charge of central enterprises approving the issuance application； and
2. other documents that the CSSRC may require.
Article 15 The prospectus referred to in Article 13 hereof shall be prepared in accordance with the form prescribed by CSSRC and shall address the following matters：
1. the name and domicile of the company；
2. a brief description of the promoter（s） and issuer；
3. the purpose of the funds subscription；
4. the company's current total capital， the classes and total value of the shares that the company proposes to issue in the subject issuance， the par value and sale price per share， the net asset value attributable to each share prior to the issuance and the estimated net asset value attributable to each share on the conclusion of the issuance， distribution expenses and commissions related to the issuance；
5. information regarding share subscriptions by the promoters of the initial issuance， the share rights structure and the verification certifications for the subscriptions；
6. the name of the distributing institutions， the method of distribution and the number of shares to be distributed；
7. the proposed purchasers of the share issuance， the time and place of the share issuance， and the methods for share subscription and payment of purchase；
8. the plan for the use of proceeds and the prediction of profitability and risks；
9. a near-term development plan of the company， and a projection of the following year's profit of the company， audited by a certified accountant and for which such accountant has issued an audit opinion；
10. major contracts；
11. major litigations involving the company；
12. a list of the names and brief biographies of each of the board directors and the supervisors of the company；
13. a description of production and operations for the most recent three years or in the period since the company's establishment and the basic business development situation；
14. audited financial statements of the company for the most recent three years or the period since its establishment accompanied by an audit report signed by more than two certified accountants （in addition to the auditing firm） and sealed by their respective firm；
15. with respect to any company seeking to increase its capital， information on the use of proceeds from any previous public share issue；
16. other matters that the CSSRC requires to be addressed.
Article 16 The cover of the share prospectus shall set forth the following： “THE ISSUER HEREBY WARRANTS THE TRUTHFULNESS， ACCURACY AND COMPLETENESS OF THE CONTENTS OF THIS SHARE PROSPECTUS. NO DECISION MADE BY THE GOVERNMENT OR ANY STATE SECURITIES REGULATORY DEPARTMENT CONCERNING THIS ISSUANCE INDICATES THAT SUCH BODIES HAVE SUBSTANTIVELY PASSED UPON OR WARRANTED THE VALUE OF THE SHARES BEING OFFERED BY THE ISSUER OR ANY POTENTIAL GAIN TO THE INVESTORS.”
Article 17 All the promoters or directors and the principal distributors shall sign the share prospectus， warranting that the share prospectus contains no false or seriously misleading statements or important omissions and that such persons will be jointly and severally liable for the same.
Article 18 In performing their duties， the certified accountants and their firms， professional appraisers and their institutions and lawyers and their firms that issue documents for the issuer shall， in accordance with the recognized business standards and ethics codes of their respective professions， check and verify the truthfulness， accuracy and completeness of the contents of the documents that they have issued.
Article 19 Before a public share issuance has been approved， no person shall disclose in any form the contents of the prospectus. The issuer shall publicize the share prospectus within two to five business days prior to the commencement of the distribution period after the public share issuance has been approved.
The issuer shall provide all subscribers with a prospectus. Institutions distributing securities shall place copies of the prospectus at the place of business and have the obligation to remind the subscribers to read the prospectus.
The prospectus shall be effective for a period of six months， commencing from the date when all of the signatures to the prospectus have been applied. After the prospectus ceases to be effective the share issuance shall be Terminated immediately.
Article 20 Shares being offered to the public shall be distributed by securities dealing institutions. “Distribution” comprehends two methods： underwriting and sales on a best effort basis.
The issuer and the securities dealing institution shall execute a distribution agreement， in which the following matters shall be addressed.
1. the names and domiciles of the parties and the names of their legal representatives；
2. the method of distribution；
3. the types， volume， value and issue price of the shares to be distributed；
4. the distribution period and the commencement and termination dates；
5. the time and method of payment for the distribution；
6. calculation of the distribution expenses， and the method and time of payment therefor；
7. liability for breach of contracts；
8. other matters that need to be agreed upon.
The principles pursuant to which a securities dealing institution collects distribution fees shall be determined by the CSSRC.
Article 21 In distributing the shares， a securities dealing institution shall check the truthfulness， accuracy and completeness of the prospectus and other related materials that are distributed； if it is determined that they contain false or substantially misleading statements or important omissions， no offer invitation or offer may be made； if an offer invitation or an offer has already been made， distribution shall be stopped immediately and appropriate remedial measure shall be taken.
Article 22 Public share issuances， the total par value of which exceeds Renminbi 30，000，000 yuan or the projected total sales price of which may exceed Renminbi 50，000，000 yuan， shall be distributed by a distribution syndicate.
A distribution syndicate shall be made up of two or more distributing institutions. The principal distributor（s） shall be selected by the issuer in accordance with the principle of fair competition and by means of bid invitation or consultation. The principal distributor（s） shall sign a distribution syndicate agreement with the other distributors.
Article 23 If the total par value of the shares to be offered to the public exceeds Renminbi 100，000，000 yuan or the projected total sales price of the shares to be offered to the public may exceed Renminbi 150，000，000， the number of distributors from other localities shall account for a reasonable proportion of the distribution syndicate and the number of shares to be sold in other localities shall account for a reasonable proportion of total sales.
“Other localities” referred to in the preceding paragraph means places other than the province， autonomous region or municipality directly under the Central Government where the issuer is located.
Article 24 The distribution period shall not be less than ten days and more than ninety days.
During the distribution period， the distributing institution must make every effort to sell to subscribers the shares that it has undertaken to sell， and may not keep distributed shares for itself.
Upon the expiration of the distribution period， the then unsold shares shall be disposed of in accordance with the method of underwriting or sale on a best effort basis， respectively， as agreed in the distribution agreement.
Article 25 In issuing share subscription or applications to the public， a distributing institution or its authorized organ may not collect a fee that equals more than the cost of the print of subscription form and issuing expenses. Moreover， such entities may not place a limit on the number of subscription forms distributed.
If the number of shares subscribed for exceeds the total number of shares to be offered， the distributing institutions shall sell the shares in accordance with the principle of fairness and by means of proportional allotments， proportional allotments after cumulative reductions， or by lottery. In case the lottery method is used， the distributing institution shall， under the supervision of the notary public office and in accordance with the prescribed procedures， publicly conduct the lottery form of all the share subscription applications at a given date and sell shares to those whose lots are drawn.
Other than the distributing institutions or their authorized organs， no unit or individual may distribute or resell share subscription applications.
Article 26 Within fifteen business days after the expiration of the share distribution period， the distributing institutions shall submit to the CSSRC a written report on the share distribution.
Article 27 If， after the distribution period expires， the securities dealing institution intends to make to the public （other than the issuer） an offer invitation to buy or an offer to sell， or intends to sell， the issuer's shares in its possession to the public （other than the issuer）， the matter shall be handled in accordance with prescribed procedures， subject to approval by the CSSRC.
Article 28 The provisions of this Chapter shall not apply if an issuer replaces its already issued share certificates with new share certificates， and no direct or indirect expenses are incurred as a result thereof.
Chapter III The Trading of Shares
Article 29 The trading of shares must be conducted at securities exchanges authorized for share trading by the SCSC.
Article 30 A company limited by shares that applies to have its shares traded on a securities exchange shall meet the following conditions：
1. Its shares shall have been already offered to the public；
2. Its total amount of capital after the issuance shall be not less than Renminbi 50，000，000 yuan；
3. Not less than 1，000 shareholders hold individually shares the par value of which is at least Renminbi 1，000 yuan and the total par value of the shares owned by individuals is not less than Renminbi 10，000，000 yuan；
4. The company has a record of profitability over the most recent three consecutive years； in the case of an existing enterprise that is being restructured as a company limited by shares， the existing enterprise shall have had a record of profitability over the most recent three consecutive years， without regard to the newly-established company limited by shares； and
5. Other conditions that the SCSC may impose.
Article 31 A company limited by shares which intends to apply to have its shares traded on a securities exchange and that offers shares to the public and meets the conditions provided in the preceding Article shall apply to the listing commission of the relevant securities exchange； the listing commission shall， within twenty business days upon receipt of the application， make a decision after review and determine the specific time when the applicant may be listed. The approved review document shall be submitted to the CSSRC for the record， with a copy thereof to the SCSC.
Article 32 A company limited by shares that applies for its shares to be traded on a securities exchange shall file the following documents with the listing commission of the securities exchange：
1. the application document；
2. the registration document of the company；
3. the document approving the public issuance of shares；
4. the company's financial statements for the three most recent years or the period since its establishment audited by an accounting firm， accompanied by an audit report signed by more than two certified accountants （in addition to the auditing firm） and sealed by the accounting firm of such accountants；
5. recommendation letter（s） from members of the securities exchange；
6. the most recent prospectus； and
7. other documents that the securities exchange may require.
Article 33 After the shares are approved for trading on a securities exchange， the listing company shall make a listing announcement and publicize the documents listed in Article 32 hereof.
Article 34 In addition to the major items of the prospectus provided for in Article 15 hereof， the contents of the listing announcement shall also include the following matters：
1. the date when approval is granted for the shares to be traded at the securities exchange and the approval document number；
2. information on the share issue， the share rights structure and the names of the ten largest shareholders and the amount of shares they each hold；
3. the resolution of the company's inaugural meeting or a shareholder's general meeting approving the trading of the company's shares on the securities exchange；
4. brief biographies of the directors， supervisors and senior managers and information with respect to their ownership of company shares；
5. documents showing the operating results and financial status of the company over the most recent three years or the period since its establishment and profit projection for the following year； and
6. other matters that the securities exchange may require to be specified.
Article 35 In performing their duties， the certified accountants and their firms， professional appraisers and their institutions and lawyers and their firms that issue documents for the listing company shall， in accordance with the recognized business standards and ethics codes of their respective professions， check and verify the truthfulness， accuracy and completeness of the contents of the documents that they have issued.
Article 36 The transfer of state-owned shares shall be subject to approval by the relevant state authorities， for which specific measures will be formulated separately.
The transfer of state-owned shares may not jeopardize the rights and interests of the state-owned shares.
Article 37 The securities exchanges and institutions administering the safekeeping， clearance， transfer， registration and distribution of securities shall ensure that clients of different localities shall enjoy the same treatment as the clients of the locality of such institutions and shall not be discriminated against or be subjected to restrictions.
Article 38 Any profits made by any company limited by shares' director， supervisor， senior management and a legal person shareholder that owns more than 5% of the voting shares of a company from selling company shares that such person purchased within the six months prior to such sale， or from purchasing company shares that such person sold within the six months prior to such purchase， shall be vested in the company.
The preceding paragraph shall apply to the directors， supervisors and management of a legal person shareholder that owns more than 5% of the voting shares of the company.
Article 39 No person engaged in the securities industry， securities industry regulatory personnel and other persons who are prohibited by the state from buying or selling shares may directly or indirectly own， buy or sell shares except for the approved securities of investment funds.
Article 40 Professionals that issue documents such as audit reports， asset valuation reports and written legal opinions for the issue of the shares may not buy or own the subject shares during the distribution period and for six months after the expiration of such period.
Professionals that issue documents such as audit reports， asset valuation reports and written legal opinions for the listed company may not purchase or hold the shares of the subject company before such documents as the audit report， asset valuation report and written legal opinion become public information； nor may they purchase the shares of the subject company within five business days after such documents become public information.
Article 41 A company limited by shares may not redeem its outstanding shares without approval in accordance with the relevant provisions of the state.
Article 42 Without the approval of the SCSC， no person may trade share options or futures or options or futures on share indexes.
Article 43 No financial institution may provide credit for the trading of shares.
Article 44 Securities dealing institution may not lend the shares of their clients to others or use such shares as security.
Article 45 Any securities dealing institution that has been granted approval to undertake more than two activities， including dealing in securities for its own account， dealing in securities as an agent and the management of investment funds， shall separate the business personnel， funds and accounts for the different activities.
Chapter IV Acquisition of Listed Company
Article 46 No individual may own more than 0.5% of the outstanding common shares of a listed company； any amount in excess of such portion shall be redeemed by the company after it has obtained approval from the CSSRC， at the original purchase price or the then current market price， whichever is lower. However， if an individual's holding more than 0.5% of the outstanding common shares of such company results from the decrease of the total number of the outstanding common shares of such company， then the amount in excess of such portion shall not be redeemed for a reasonable time.
Special Renminbi denominated shares issued by the company and shares issued outside China that are held by individuals of a foreign country or individuals of the Hong Kong， Macao and Taiwan regions are not subject to the 0.5% restrictions set forth in the preceding paragraph.
Article 47 When any legal person directly or indirectly holds 5% of the outstanding common shares of a listed company， it shall， within three business days of the occurrence of such fact， report the same in writing to such company， the securities exchange and the CSSRC and make such occurrence public. However， if a legal person's holding of more than 5% of the outstanding common shares of such company results from the decrease of the total number of the outstanding common shares of such company， then it shall not be subject to the above requirements for a reasonable time.
When a legal person's ownership of the outstanding common shares of a listed company changes up or down by more than 2% of the total number of such shares after it has held more than 5% of such outstanding shares， it shall， within three business days of the occurrence of such fact， report the same in writing to such company， the securities exchange and the CSSRC and make such occurrence known to the public.
Such legal person may not directly or indirectly make further purchase or sales of such share within two business days after the date it reports in writing and makes an announcement to the public in accordance with the provisions of the preceding paragraph and prior to its written report.
Article 48 When any legal person other than a promoter directly or indirectly owns at least 30% of the outstanding common shares of a listed company， it shall， within forty-five business days of the occurrence of such fact， make an acquisition offer to all shareholders of the company， to buy their shares for cash at a price equal to the highest of the following：
1. the highest price paid by the acquisition offer or for such shares in the 12 months prior to its making of the acquisition offer； and
2. the average market price of such shares for the thirty business days prior to the making of the acquisition offer.
Holders referred to in the preceding paragraph are prohibited from making further purchases of such shares before they make the acquisition offer.
Article 49 Before it makes the acquisition offer， the acquisition Offer or shall report in writing to the CSSRC about the intended acquisition； simultaneous with the acquisition offer， it shall provide the offerees and the relevant securities exchange with a statement about itself and all information relating to such offer and shall guarantee that the materials are true， accurate， complete and not misleading.
The acquisition offer shall remain valid for not less than thirty business days， commencing from the date the acquisition offer is given. The acquisition offer or may not withdraw its acquisition offer within thirty business days after the giving of the acquisition offer.
Article 50 All conditions of the acquisition offer shall apply to all shareholders of the same shares.
Article 51 The acquisition shall fail if， at the expiration of the acquisition offer， the number of common shares that the acquisition offer or holds does not equal at least 50% of the outstanding common shares of the company； other than new acquisition offers made by such offeror， the outstanding common shares of the company thereafter that he purchases may not exceed 5% of the total outstanding common shares of the company.
If， at the expiration of an acquisition offer， the acquisition offer or holds more than 75% of the total outstanding common shares of such company， such company shall terminate trading on the relevant securities exchange.
If the acquisition offer or offers to purchase less than the total number of shares which the offerees have agreed to sell into the offer， the acquisition offer or shall purchase such shares pro rata from all offerees that have accepted the acquisition offer.
If， at the expiration of the acquisition offer， the acquisition offeror holds up to 90% the total common shares of such company， the remaining shareholders shall be entitled to sell their shares to the acquisition offeror on the same terms.
Article 52 If， after the acquisition offer has been given， there is any change in the key terms of the offer， the acquisition offeror shall immediately notify all the offerees of such change， through a press conference， by newspaper or by other means of communication.
During the offer period and for thirty business days after the expiration of the offer， the acquisition offeror may not purchase the subject shares on any terms other than those provided for in the offer.
Offerees that have accepted a compulsory offer shall have withdrawal rights prior to the expiration of the acquisition offer.
Chapter V Safekeeping， Clearance and Transfer
Article 53 All issued shares shall be registered shares. The issuer may issue book entry shares and may also issue shares represented by physical certificates. The register for book entry shares shall be placed in safekeeping with an institution designated by the CSSRC. Shares represented by physical certificates， if kept together， shall also be placed in safekeeping with an institution designated by the CSSRC.
Article 54 Without the written consent of the holder of the subject shares， the institution keeping the share certificates may not lend the shares of such holder to other persons or pledge them as security.
Article 55 The securities clearance institution shall， in accordance with the principle of convenience， security and fairness， formulate the operational rules and internal administrative rules with respect to share clearance and transfer.
The securities clearance institution shall accept new member in accordance with the principle of fairness.
Article 56 The institutions responsible for the safekeeping， clearance， transfer and registration of securities shall be subject to the supervision and regulation of the CSSRC.
Chapter VI Disclosure of Listed Companies
Article 57 A listed company shall furnish the CSSRC and relevant securities exchange with the following documents：
1. an interim report furnished within sixty days following the end of the first six months of each financial year； and
2. an annual report audited by a certified accountant， submitted within one hundred and twenty days after the end of each financial year.
The interim report and annual report must comply with state accounting principles and the relevant provisions of the CSSRC. They each shall be signed by an authorized director or manager and shall be sealed by the listed company.
Article 58 The interim report referred to in Article 57 hereof shall include the following：
1. the company's financial report；
2. the company management's analysis of the financial situation and operating results of the company；
3. major litigations relating to the company；
4. any change in the outstanding shares of the company；
5. important matters that the company has submitted to the voting shareholders for review； and
6. other matters that the CSSRC may require to be specified.
Article 59 The annual report referred to in Article 57 hereof shall include the following contents：
1. basic information on the company；
2. basic information on the primary products or services of the company；
3. basic information on the company's industry；
4. basic information on the assets and property of the company， such as important factories， mines and real property；
5. information on the outstanding shares of the company， including the names of shareholders who hold 5% or more of the company's outstanding common shares and the names of the ten largest shareholders of the company；
6. the number of shareholders of the company；
7. basic information on the directors， supervisors and senior managers of the company， their ownership of company shares and their remuneration；
8. basic information regarding the corporate structure of the company and its affiliates；
9. an abstract of the company's financial information for the prior three years or the period since its establishment；
10. the company management's analysis of the financial situation and operating results of the company；
11. any changes with respect to the outstanding bonds and/or debentures of the company；
12. major litigations relating to the company；
13. a financial report of the company comparing the two most recent financial years with schedules and notes， audited by a certified accountant； if the listed company is a holding company， there shall also be submitted a consolidated financial report comparing the two most recent years； and
14. other matters that the CSSRC may require to be specified.
Article 60 If there occurs any major event that may have a substantial impact on the market price of the shares of a listed company that the investors are not as yet aware of， the listed company shall immediately submit to the relevant securities exchange and the CSSRC a report on the major event and promulgate and explain the essence of the event to the public. However， if the listed company has adequate reason to believe that the promulgation of such major event to the public will jeopardize the interests of the listed company and the failure to promulgate information with respect to it will not result in a substantial change in the market price of the shares， then， upon approval by the relevant securities exchange， such event needs not be promulgated.
The “major events” referred to in the preceding paragraph shall include the following situations：
1. The company enters into an important contract which may have substantial impact on the assets， liabilities， interests and one or more operational results of the company；
2. Major changes take place in the operational policies or projects of the company；
3. The company makes a major investment or purchases long-term assets for a substantial amount；
4. The company incurs major debts；
5. The company defaults by failing to make payment when due on a major loan；
6. The company suffers a major operational or non-operational loss；
7. The company's assets suffer major damage；
8. Important changes take place with respect to the company's production and operational environment；
9. Newly-promulgated laws， regulations， policies and rules， etc. may have a substantial impact on the operations of the company；
10. The chairman of the board of directors， or more than 30% of the directors， or the general manager， is replaced；
11. The number of common shares of any shareholder holding 5% or more of the outstanding common shares of the company changes up or down by 2% of the total number of the shares；
12. Any major litigation relating to the company； and
13. The company commences liquidation or is placed in bankruptcy.
Article 61 If any information disseminated through any public media may have a misleading impact on the market price of the shares of a listed company， such company shall publicly issue a clarification with respect to such information immediately after it becomes aware of the same.
Article 62 All directors， supervisors and senior management of a listed company who hold common shares of the company shall report their holdings of such shares to the CSSRC， the relevant securities exchange and such company； if there is any change in their holdings， they shall report the same to the CSSRC， the relevant securities exchange and such company within ten business days of such change.
The persons referred to in the preceding paragraph shall have the reporting obligations in accordance with the provisions of this Article for six months after their resignation or relocation.
Article 63 Information required to be promulgated shall be published by a listed company in newspapers and magazines of national circulation designated by the CSSRC.
When a listed company promulgates information in accordance with provisions of the preceding paragraph， it may， at the same time， promulgate the relevant information in local newspapers and magazines designated by the relevant securities exchange.
Article 64 The CSSRC shall promptly publicize the reports， announcements and other documents submitted by a listed company and its directors， supervisors， senior management and shareholders of more than 5% of the outstanding common shares for investor review.
All information required to be disclosed by the CSSRC shall be public information， with the exception of the following：
1. protected trade secrets， the non-disclosure of which is permitted by laws or regulations；
2. non-public information and documents that the CSSRC acquires in the course of investigating illegal activities； and
3. other information and documents the non-disclosure of which is permitted in accordance with the provisions of relevant laws or regulations.
Article 65 Any shareholder may authorize another person to exercise on his/her behalf consent or voting rights. However， when any person attempts to solicit consent or voting rights from more than twenty-five persons， the provisions of the CSSRC concerning information disclosure and the submission of reports shall be complied with.
Article 66 In addition to the submission to the CSSRC and the relevant securities exchange of the reports， announcements， information and documents provided in this Chapter， a listed company shall also submit the related reports， announcements， information and documents in accordance with all provisions of the relevant securities exchange and shall publicize them to all shareholders.
Article 67 The provisions of Articles 57-65 hereof shall apply to companies limited by shares that have issued on to the public but have not had their shares traded on a securities exchange.
Chapter VII Investigation and Sanctions
Article 68 The CSSRC shall have the right， by itself or jointly with the relevant state authorities， to conduct investigation of any unit or individual that violates the provisions of these regulations； serious cases shall be investigated under the direction of the SCSC.
Article 69 The CSSRC may inspect the business activities of securities dealing institutions.
Article 70 A company limited by shares that violates the provisions of these regulations by committing one of the following acts shall， in accordance with the circumstances， be given one or a combination of the following sanctions： warning， compulsory recession of the share capital raised illegally， confiscation of illegal income or fine； when the circumstances are serious， the company shall be suspended from issuing shares：
1. the issuance or the issuance in a disguised form of shares without approval；
2. approval to issue shares or to trade on a securities exchange obtained by fraud or other improper means；
3. failure to issue shares in accordance with the prescribed method and scope or selling shares after the share prospectus ceases to be effective； and
4. the redemption of outstanding shares without approval.
The directors， supervisors and senior management of the company limited by shares that are directly responsible for the acts enumerated in the preceding paragraph shall be given a warning or fined an amount of more than 30，000 yuan and under 300，000 yuan.
Article 71 A securities dealing institution that violates the provisions of these regulations by committing one of the following acts shall， in accordance with circumstances， be given one or a combination of the following sanctions： warning， confiscation of the shares acquired illegally and other illegal income， or a fine； when the circumstances are serious， the institution's securities dealing business shall be restricted or temporarily suspended or its business license for dealing in securities shall be canceled：
1. failure to sell the shares in accordance with the prescribed time， procedures and method；
2. failure to distribute the share subscription applications in accordance with the relevant provisions；
3. lending clients' shares to other parties or pledging them as security；
4. collecting unreasonable commissions and other fees；
5. buying or selling shares for its own account in the name of its clients；
6. appropriating the deposits of clients；
7. sharing the profits or the losses from the trading of shares with clients or guaranteeing to the clients that losses will be avoided when buying or selling shares as an agent of the clients； and
8. providing borrowed money for the trading of shares.
The securities dealing institution's leading personnel responsible， and other personnel directly responsible， for the acts enumerated in the preceding paragraph shall be given a warning or fined an amount of more than 30，000 yuan but less than 300，000 yuan.
Article 72 If insiders and other personnel who obtain inside information by inappropriate means violate the provisions of these regulations by disclosing inside information， buying or selling shares or tipping other persons on the buying or selling of shares on the basis of inside information， they shall， in accordance with the circumstances， have the illegally acquired shares and other illegal income confiscated and in addition shall be fined more than 50，000 yuan but less than 500，000 yuan.
If securities industry personnel， the regulatory personnel of the securities industry and other personnel prohibited by the state from buying or selling shares violate the provisions of these regulations by directly or indirectly owning or buying or selling shares， they shall， in addition to being ordered to sell the shares that they own within a specified time limit and in accordance with the circumstances， be given one or a combination of the following sanctions： warning， confiscation of illegal income， and a fine of more than 5，000 yuan but less than 50，000 yuan.
Article 73 If an accounting firm， an appraisal institution or a law firm violates the provisions of these regulations by issuing documents with false or seriously misleading contents or major omissions， it shall， in accordance with the circumstances， be given one or a combination of the following sanctions： warning， confiscation of illegal income， and fines； if the circumstances are serious， its securities connected business shall be temporarily suspended or its license permitting it to undertake securities related activities canceled.
Any certified accountants， professional appraisers or lawyers directly responsible for the acts enumerated in the preceding paragraph may be given a warning or fined more than 30，000 yuan but less than 300，000 yuan， if the circumstances are serious， such professionals' qualification to engage in the securities business shall be terminated.
Article 74 Any unit or individual that violates the provisions of these Regulations by committing any one of the following acts shall， in accordance with the circumstances， be given one or a combination of the following sanctions： warning， confiscation of the illegally-acquired shares and other illegal income， and a fine：
1. trading shares at place（s） other than a securities exchange which the SCSC has approved as a site where shares may be traded；
2. making false or seriously misleading statements or omissions of important information in the course of issuing and trading shares；
3. manipulating stock market prices through conspiracy or pooling， or influencing the issuance and trading of shares by spreading rumors and similar means；
4. acting in collaboration with other persons to make sham purchases and sales without transferring ownership or effective control of the shares for the purpose of creating false share prices；
5. disturbing the order of the stock market by selling or offering to sell shares not held；
6. extorting or forcing the purchase or sale of shares or assisting other persons in buying or selling shares by taking advantage of one's office or by other improper means；
7. trading options and futures of shares or of a share index without approval；
8. failure to perform the reporting， publicizing and promulgation of the relevant documents and information；
9. forging， altering or destroying the business records， accounting ledgers and other documents related to the issuance and trading of shares； and
10. participating in other illegal issuances and trading of shares and similar activities；
A company limited by shares that commits any of the acts referred to in the preceding paragraph may be suspended from issuing shares if the circumstances are serious； a securities dealing institution that commits any of the acts referred to in the preceding paragraph may have its securities dealing operations restricted or suspended or have its business license for securities dealing canceled.
Article 75 The sanctions provided for under Articles 70， 71， 72 and 74 hereof shall be determined by a SCSC-designated authority； sanctions for major cases shall be submitted to the SCSC for determination. The sanctions provided for in Article 73 hereof shall be determined by the relevant departments in accordance with the scope of their power.
Article 76 Any listed company or securities exchange or other self-regulatory organs of the securities industry's member units or employees that violate the provisions of these Regulations shall， in addition to being subject to administrative sanctions in accordance with the provisions of these Regulations， be punished by the securities exchange or other self-regulatory organs of the securities industry in accordance with their articles of association or self-regulating rules.
Article 77 Violations of the provisions of these Regulations that cause damages to other persons shall make the violators liable to pay civil compensation.
Article 78 Violations of these Regulations which constitute criminal acts shall be investigated for criminal liability in accordance with the law.
Chapter VIII Arbitration of Disputes
Article 79 With respect to any dispute relating to the issuance or trading of shares， the parties may， in accordance with the provisions of their agreement， apply to an arbitration organ for mediation or arbitration.
Article 80 A dispute between securities dealing institutions or between a securities dealing institution and a securities exchange arising from the issuance or trading of shares shall be resolved through mediation or arbitration under the auspices of an arbitration organ that has been established with the approval of the SCSC or is designated by the SCSC.
Chapter IX Supplementary Articles
Article 81 The following terms used in these Regulations shall have the following meanings：
1. “Shares” means the transferable written certificates issued by a company limited by shares indicating that its shareholders enjoy rights and bear obligations in accordance with the shares held by such shareholders.
“Book entry shares” means the written register that the issuer has produced in accordance with the uniform form provided for by the CSSRC and that records the interests of the shareholders.
“Shares in the form of physical certificates” means written shares certificates that the issuer has uniformly printed at a CSSRC-designated printing institution.
2. “Outstanding common shares” shall mean the common share capital of the company other than treasury shares.
3. “Public issue” or “issue to the public” shall mean the making of offer invitations， offers or sales with respect to the issuer's shares that the issuer makes to the public （other than the issuer itself） through securities dealing institutions.
4. “Distribute” or “distribution” shall mean the act whereby a securities dealing institution distributes the issuer's shares by means of underwriting or sales on a best efforts basis.
5. “Distributing institution” shall mean a securities dealing institution that sells the issuer's shares by means of underwriting or sale on a best effort basis.
6. “Underwrite” or “underwriting” shall mean the method of distribution whereby the securities dealing institution shall purchase all of the unsold shares upon the expiration of the issuing period.
7. “Sale or sell on a best effort basis” shall mean the method of distribution whereby the securities dealing institution shall return all the unsold shares to the issuer or underwriter upon the expiration of the issuing period.
8. “Promulgate” shall mean the act whereby the documents that should be disclosed in accordance with the provisions of these Regulations are published in newspapers and magazines designated by the CSSRC.
9. “Publicize” shall mean the act whereby the documents that should be disclosed in accordance with the provisions of these Regulations are placed at the business offices of the issuer and its securities distributing institution and at the CSSRC， for review and examination by the investors.
10. “Offer” shall mean the oral or written expression made to private places or non- private offerees to buy or sell certain shares.
11. “Offer invitation” shall mean any expression that advises other persons to make an offer to the person that makes the invitation.
12. “Preliminary acceptance” shall mean the preliminary expression of acceptance by the offeree of an offer， which shall not constitute an acceptance prior to the expiration of the offer.
13. A “listed company” shall mean a company limited by shares the shares of which have been approved to be traded on a securities exchange.
14. “Insiders” shall mean any person that has access to or can acquire inside information because of its holdings of the issuer's shares， or because of its position as a director， supervisor or senior manager of the issuer or of the enterprises that have close connections with the issuer， or because of its membership， managerial position， supervisory role or professional connection， or because it performs duties as an employee or professional advisor.
15. “Inside information” shall mean important information which may have an impact on the market price， of which the relevant issuer， securities dealing institutions， legal persons intending to complete an acquisition， securities supervisory and regulatory organs， self-regulatory organs of the securities industry and the personnel that have close connections with them have knowledge and which has not yet been made public.
16. A “securities exchange” shall mean a securities exchange or a securities trading quotation system which has been established after approval for the trading of shares.
17. “Regulatory personnel of the securities industry” shall mean the staff of the regulatory departments and the self-regulatory organs of the securities industry.
18. “Securities industry personnel” shall mean the staff of the institutions that issue and trade shares and undertake other related businesses.
Article 82 The regulations for the administration of securities dealing institutions and securities exchanges shall be formulated separately. These regulations shall not apply to shares owned by the internal staff and employees of an issuer.
Article 83 The SCSC shall be responsible for the interpretation of these Regulations.
Article 84 These Regulations shall come into effect as of the date of their promulgation.
