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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II REGISTRATION OF SPONSOR INSTITUTIONS AND SPONSOR REPRESENTATIVES CHAPTER III DUTIES OF THE SPONSOR INSTITUTIONS CHAPTER IV SPONSOR PROCEDURES CHAPTER V THE COORDINATION OF SPONSOR WORK CHAPTER VI SUPERVISORY MEASURES AND LEGAL LIABILITIES CHAPTER VII SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. In order to regulate the activities of listing and issuance of securities, to enhance the quality of listed companies and the practices of securities operating institutions, to protect the legitimate rights and interests of investors and to promote the sound development of securities market, the present Measures are formulated in accordance with the laws and administrative regulations. Article 2. The present Measures shall be applicable to the join-stock limited companies' initial public offer of stocks and the listed companies' issuance of new stocks and convertible corporate bonds. Article 3. The securities operating institutions shall fulfill the sponsor duties, shall register as the sponsor institutions in accordance with the present Measures. Article 4. The sponsor institutions shall abide by the laws, administrative regulations, the rules of the China Securities Regulatory Commission (hereinafter referred to CSRC) and the bylaws of the securities industry, shall sponsor the issuance and listing of the issuers' securities honestly, faithfully, diligently and devotedly, and shall continuously supervise and urge the issuers to perform the relevant obligations. When a sponsor institution performs the sponsor duties, it shall designate some sponsor representatives to take charge of the specific sponsor work. Article 5. The sponsor institutions shall be responsible for the main underwriting work of the issuance of securities, shall check the public offer financing documents in accordance with the law, and shall give a sponsor advice to the CSRC. The sponsor institutions shall ensure the authenticity, exactness and completeness of the documents issued by them. Article 6. An issuer and its directors, supervisors, managers and other senior managerial persons (hereinafter referred to the "senior managerial persons"), the law firm, accounting firm, assets assessment institutions and other intermediary institutions that provide special services to the issuer (hereinafter referred to " the intermediary institutions") and the signer of the issuer shall, in accordance with the laws, administrative regulations and the rules of the CSRC, bear the corresponding liabilities, and shall cooperate with the sponsor institutions to fulfill the sponsor duties. The sponsor institution and the sponsor representatives' fulfillment of their duties cannot be considered a reason to mitigate the liabilities of the issuer and its senior managerial persons, the intermediary institutions and its signer or to exonerate them from their liabilities. Article 7. The CSRC shall, in accordance with the laws, administrative regulations and the present Measures, conduct supervision and administrative over the pertinent activities of the sponsor institutions and their representatives, the issuers and their managerial persons, the intermediary institutions and their signers. The China Securities Association shall adopt self-disciplinary management to the sponsor institutions and the sponsor representatives. CHAPTER II REGISTRATION OF SPONSOR INSTITUTIONS AND SPONSOR REPRESENTATIVES Article 8. Any securities operating institution or individual that has been registered in the CSRC and is on the name list of the sponsor institutions and the sponsor representatives (hereinafter referred to the name list) may engage in the sponsor work in accordance with the provisions of the present Measures. Any one fails to be registered as a sponsor institution or sponsor representative in the CSRC and to be on the name list may not engage in the sponsor work. Article 9. Where a securities operating institution applies for being registered as a sponsor institution, it shall be a comprehensive securities company and shall submit to the CSRC a statement or commitments expressing its willingness to fulfill the sponsor duties. Article 10. Where a securities operating institution is under any of the circumstances, it shall not be registered as a sponsor institution: (1) There are less than 2 sponsor representatives; (2) There is any serious weakness in the company's governance structure, the risk control system is imperfect or hasn't been implemented effectively; (3) It is removed from the name list of the CSRC due to violations of laws and regulations in the recent 24 months; or (4) Any other circumstance prescribed by the CSRC. Article 11. Where an individual applies for being registered as a sponsor representative, he/she shall file an application to the CSRC via the sponsor institution in which he/she holds a position and submit the relevant evidential documents and statement if he/she has acquired the professional qualifications of securities and the corresponding certificate. And he/she shall meet the following conditions in addition: (1) Having experience in any investment bank prescribed by the CSRC; (2) Having taken and passed the sponsor representatives' competence examination acknowledged by the CSRC; (3) Having obtained a sponsor letter issued by the sponsor institution in which he/she holds a position and signed by the chairman of the board of directors or the general manager; (4) Without any debt of considerably large amount that shall be paid off when it matures; (5) His/her name hasn't been removed from the name list of the CSRC or he/she hasn't been given any administrative punishment by the CSRC due to violations of the law and regulations within the recent 36 months; and (6) Other conditions prescribed by the CSRC. Article 12. The securities operating institutions and individuals shall ensure that the registration application documents be authentic, exact and complete. During the period of application, if there is any important change in the documents, the applicant shall submit new materials to the CSRC within 5 working days from the day when the change occurs. Article 13. If an applicant meets the conditions, the CSRC shall, within 20 working days from the day when it accepts his/her registration application, handle the registration formalities, list him/her in the name list and make an announcement. If the applicant doesn't meet the conditions, the CSRC shall not handle the registration formalities and notify him/her of the reasons in writing. Article 14. A sponsor institution shall, within 1 month from the day when it or its sponsor representatives complete the registration or from the day when it has been 12 months since the previous archival filing is completed, submit the annual archival filing form and the relevant materials to the CSRC so as to modify the registered information. Article 15. Where there is any important change in the registered information of the sponsor institution or of its sponsor representatives, the sponsor institution shall report to the CSRC within 5 working days from the day when the change occurs. Article 16. Where a sponsor institution is under any of the circumstances prescribed in Article 10 of the present Measures, the CSRC shall remove it and its sponsor representatives from the name list. Article 17. Where a sponsor representative is under any of the following circumstances, the CSRC shall remove his/her name from the name list: (1) His /her professional license has been cancelled or withdrawn; (2) Without experience in an investment bank required by the CSRC; (3) The sponsor institution has withdrawn its sponsor letter; (4) He/She has been transferred from a sponsor institution or from the operating department of its investment bank; (5) He/She fails to clear off any mature debt of considerably large amount; (6) He/She is given any administrative punishment by the CSRC due to violations of the law and regulations or receives a criminal punishment due to committing a crime; or (7) Other circumstances prescribed by the CSRC. Article 18. If a sponsor representative whose name has been removed from the name list meets the registration conditions, he/she may re-file an application for being registered as a sponsor representative. If it has been more than 6 months since the day when he/she is removed from the name list, he /she shall have the sponsor representatives' competence examination once again. CHAPTER III DUTIES OF THE SPONSOR INSTITUTIONS Article 19. A sponsor institution shall dutifully sponsor the issuance and listing of the securities of an issuer. After the listing of the securities of an issuer, the sponsor institution shall continuously supervise and guide the issuer to fulfill the obligations such as operating normatively, keeping its promise and disclosing the information. Article 20. Before a sponsor institution sponsors the initial public offer of stocks of an issuer, it shall give guidance to the issuer in accordance with the requirements of the CSRC. Where the sponsor institution is to sponsor the initial public offer of an issuer guided by any other institution, it shall re-provide guidance to the issuer for at least 6 months prior to making the sponsor. Article 21. Where an issuer meets the following requirements upon guidance, the sponsor institution may sponsor it to issue securities by way of listing: (1) It meets the requirements for the public issuance of securities and the relevant regulations and has the capability of sustainable development; (2) It is independent of the promoters, big shareholders and the actual controller in the aspects of operations, assets, personnel, institution and financial affairs. There is no intra-trade competition, obviously unfair connected transaction or any other act that may affect the independent operation of the issuer; (3) There is no serious defect in the corporate governance, financial and accounting systems that may impede the sustained normative operation; (4) The senior managerial persons have grasped the laws and administrative regulations and other related knowledge required for entering the securities market, have known the statutory obligations and responsibilities of a listed company and its senior managerial personnel, are adequately honest and trustworthy, are capable of managing a listed company and have sufficient experiences; and (5) Other requirements prescribed by the CSRC. Article 22. Where a sponsor institution sponsors the issuance and listing of the securities of an issuer, it shall, in accordance with the laws, administrative regulations and provisions of the CSRC, devotedly conduct investigations into and carefully examine the issuer and its promoters, big shareholders and actual controller. It shall, upon the entrustment of the issuer, organize and make the application documents and issue the sponsor documents. Article 23. Among the issuer's public financing documents, those not supported by any professional opinion of an intermediary institution and its signer shall be fully, widely and properly investigated into by the sponsor institution, who shall then independently make a judgment on the materials provided by the issuer and the information disclosed by it and shall have adequate reasons to affirm that there is no material discrepancy between the judgment made by it and the issuer's public financing documents. Article 24. Among the issuer's public financing documents, those containing the professional opinions issued by the intermediary institutions and their signers shall be carefully checked and verified by the sponsor institution, who shall independently make a judgment on the materials provided by the issuer and the information disclosed by it. Where there is any important discrepancy between the judgment made by the sponsor institution and the professional opinion of an intermediary institution, the related items shall be re-investigated and re-verified, and another intermediary institution may be hired to provide professional services. Article 25. A sponsor institution shall make the following commitments in its sponsor documents: (1) It has adequate reasons to believe that the issuer meets the requirements prescribed in Article 14 of the present Measures, and it is proper for its securities to be listed and traded in the stock exchange; (2) It has adequate reasons to believe that there is no false information, misleading statement or serious omission in the issuer's application documents and the public financing documents; (3) It has adequate reasons to believe that the opinions of the issuer and its directors expressed in the public financing documents are well-grounded; (4) It has adequate reasons to believe that there is no material discrepancy between its judgment and the opinions expressed by other intermediary institutions; (5) It shall guarantee that the sponsor representatives assigned by it and the related personnel of this sponsor institution has fulfilled their duties diligently, and have devotedly conducted investigations into and have carefully verified the application documents of the issuer; (6) It shall guarantee that there is no false information, misleading statement or serious omission in the sponsor documents and the other documents relating to the fulfillment of the sponsor duties; (7) It shall guarantee that the professional services and the professional opinions provided to the issuer are in line with the laws, administrative regulations, the provisions of the CSRC and the bylaws of the securities industry; (8) It voluntarily accepts the supervision measures taken by the CSRC in accordance with the present Measures; and (9) Other commitments prescribed by the CSRC. Article 26. After the sponsor institution has submitted the sponsor documents to the CSRC, it shall actively help the CSRC to examine the said documents, and shall undertake the following tasks: (1) To organize the issuer and its intermediary institutions to make replies to the opinions of the CSRC; (2) To devotedly investigate into or verify the special matters relating to the current issuance and listing of securities in pursuance of the requirements of the CSRC; (3) To assign the sponsor representatives to conduct professional communications with the CSRC; and (4) Other tasks prescribed by the CSRC. Article 27. To sponsor the listing of the securities of an issuer, the sponsor institution shall submit to the stock exchange a sponsor letter and the pertinent documents required in the listing rules in the stock exchange, and shall report them to the CSRC for archival purposes. A sponsor letter shall contain the commitments prescribed in Article 25 of the present Measures, the arrangement regarding the continuous supervision over the issuer and other matters required by the stock exchange. Article 28. The sponsor institution shall determine the items and emphases of the continuous supervision and guidance in light of the actual situation of the issuer, and shall undertake the following tasks: (1) To supervise and guide the issuer to effectively implement and perfect the system regarding the prevention of the big shareholders' and other connected parties' illegal use of the issuer's resources; (2) To supervise and guide the issuer to effectively implement and perfect the internal control system regarding the prevention of the senior managerial personnel's impairment to the interests of the issuer by taking the advantage of their positions; (3) To supervise and guide the issuer to effectively implement and perfect the system regarding guarantee of the fairness and normativeness of connected transactions, and to express its opinions on the connected transactions; (4) To supervise and guide the issuer to fulfill the obligation of information disclosure, to examine the information disclosure documents and other documents submitted to the CSRC and the stock exchange; (5) To continuously pay attention to the issuer' uses of the raised fund, the fulfillment of the investment project and other commitments; (6) To continuously pay attention to the issuer's providing guaranties to others, and to express its opinions; and (7) Other tasks required by the CSRC and stipulated in the sponsor agreement. Article 29. With regard to an issuer of initial public offer of stocks, the period of continuous supervision and guidance shall be the remaining time of the current year of the listing of the securities and the following two full fiscal years. As to a listed company who issues new stocks or convertible corporate bonds, the period of continuous supervision and guidance shall be the remaining time of the current year of the listing of the securities and the following one full fiscal year. The period of continuous supervision and guidance shall start from the day of the listing of the securities. Article 30. At the expiration of the period of the continuous supervision and guidance, if there is any uncompleted sponsor task, the sponsor institution shall complete it continuously. During the conscientious sponsor period or the continuous supervision and guidance period, if the sponsor institution fails to fulfill its duties diligently and devotedly, it shall bear the relevant liabilities after the expiration of the period of continuous supervision and guidance. CHAPTER IV SPONSOR PROCEDURES Article 31. A sponsor institution shall establish and perfect the internal control system of the sponsor work. Article 32. A sponsor institution shall establish and perfect the duty investigation system regarding the issuance and listing of securities, the internal examination system concerning the issuance and listing application documents and the system regarding the continuous supervision and guidance to the issuers after the listing of securities. Article 33. A sponsor institution shall establish and perfect the system regarding the continuous training of the sponsor representatives and other personnel engaging in sponsor work. Article 34. A sponsor institution shall establish and perfect the system regarding the archival files. It shall set up separate archival files for each sponsor project. The sponsor archives shall be authentic, exact and complete, and shall be preserved for at least 10 years. Article 35. Where any of the following circumstances exists that might affect the impartial performance of duties of sponsor, a sponsor institution may not sponsor the issuance and listing of the securities of any issuer: (1) The aggregate shares of the sponsor institution, the actual controllers and the important connected parties exceed 7% of the total shares of the issuer; (2) The issuer holds or controls 7% of the total shares of the sponsor institution; (3) Any of the sponsor institution's sponsor representatives, directors, supervisors, managers and other senior managerial personnel has an interest in the issuer, takes a position in the issuer or any other circumstance that may affect the impartial performance of the sponsor duties; or (4) The sponsor institution, or any of its big shareholders, actual controllers and important connected parties provide guaranty or financing services to the issuer. Article 36. The sponsor institution and the issuer shall conclude a sponsor agreement so as to specify their respective rights and obligations. Article 37. The sponsor institution shall, according to the bylaws of the securities industry and by consulting the issuer, determine the relevant fees for the performance of the sponsor duties. Article 38. Where a sponsor agreement is terminated prior to the publication of the public offer financing documents, the sponsor institution and the issuer shall respectively report to the CSRC and give it explanations within 5 working days from the day of termination. Article 39. After the publication of the public offer financing documents, the sponsor institution and the issuer shall not terminate the sponsor agreement, except that the issuer hires another sponsor institution to apply for the issuance of new stocks or convertible corporate bonds and that the sponsor institution has been removed from the name list by the CSRC. Where a sponsor agreement is terminated, the sponsor institution and the issuer shall report to the CSRC and the stock exchange and give them explanations within 5 working days from the day of termination. Article 40. If the sponsor institution is removed from the name list of the CSRC during the period of continuous supervision and guidance, the issuer shall hire another sponsor institution within one month. Article 41. The other sponsor institution hired shall finish the supervision and guidance work uncompleted by the former one, and the supervision and guidance period shall not be shorter than a full fiscal year. The other sponsor institution hired shall carry out the sponsor work and bear the corresponding liabilities from the day when the sponsor agreement is concluded. The former sponsor institution shall bear the corresponding liabilities during the period of the conscientious sponsor and the period of continuous supervision and guidance. Article 42. A sponsor institution shall assign 2 sponsor representatives to take charge of the specific sponsor work of an issuer, shall issue a special authorization signed by the chairman of the board of directors or by the general manager, and shall ensure that the relevant departments and personnel of the sponsor institution efficiently cooperate with each other based on division of labor. In addition, the sponsor institution shall assign a project principal. A sponsor representative may take the position of a project principal. Article 43. After the issuance of the securities of an issuer, the sponsor institution shall not change the sponsor representatives, except that they are removed from the name list by the CSRC due to being transferred from the sponsor institution or any other circumstance. If the sponsor institution changes the sponsor representatives, it shall notify the issuer, and shall report and give explanations to the CSRC and the stock exchange. The former sponsor representatives shall bear the corresponding liabilities for the period during which they take charge of the specific sponsor work. Article 44. The legal representative of the sponsor institution, the person-in-charge of the business department of the investment bank, the person-in-charge of internal examination, the sponsor representatives and project principal shall affix their signatures to the sponsor documents, and list their names in the issuer's public financing documents. Article 45. The sponsor institution shall timely notify the issuer of the opinions expressed for the performance of the sponsor duties, shall keep them as its work archives, and may make an announcement in accordance with the provisions of the present Measures and report them to the CSRC and the stock exchange. Article 46. The sponsor institution shall, within 10 working days after completing the continuous supervision and guidance work, submit a "sponsor summary report" to the CSRC and the stock exchange. Article 47. Where a sponsor representative engaging in sponsor work is interfered with by any unjustifiable factor, he/she shall independently keep his/her professional opinions, which shall be recorded in the sponsor archives. Article 48. Since all the sponsor representatives and other personnel engaging in sponsor work are the persons who know the inside information, they shall abide by the laws, the administrative regulations and the provisions of the CSRC, shall not directly or indirectly seek improper interests for themselves or for any other person by making use of the access to the inside information. CHAPTER V THE COORDINATION OF SPONSOR WORK Article 49. When performing the sponsor duties, a sponsor institution may exercise the following rights to an issuer: (1) To ask the issuer to notify it of the information in accordance with the provisions of the present Measures and in the form stipulated in the sponsor agreement; (2) To announce the illegal acts of the issuer in pursuance of information disclosure provisions of the CSRC and the stock exchange; and (3) To exercise other rights provided by the CSRC or stipulated in the sponsor agreement. Article 50. Where an issuer is under any of the following circumstances, it shall timely inform or consult the sponsor institution, and shall, according to the stipulations in the agreement, submit the relevant documents to the sponsor institution: (1) Modifying its commitments regarding the financing and investment project, etc.; (2) Making any connected transaction and providing guaranty to any other person, etc.; (3) Performing the information disclosure duties or reporting the relevant matters to the CSRC and the stock exchange; (4) Committing any illegal act or other serious acts; or (5) Other matters prescribed by the CSRC or stipulated in the sponsor agreement. Article 51. Prior to the issuance of securities, if the issuer fails to cooperate with the sponsor institution to perform the sponsor duties, the sponsor institution shall express its reservations, and shall give explanations in the sponsor documents; if the circumstance is serious, it shall refuse to make sponsor or withdraw the sponsor that it has already completed. Article 52. After the issuance of securities, if the sponsor institution has adequate reasons to hold that the issuer may have illegal acts or other improper acts, it shall supervise and urge the issuer to make explanations and order it to get right within a time limit; if the circumstance is serious, it shall report to the CSRC and the stock exchange. Article 53. A sponsor institution shall organize and coordinate the relevant work of the intermediary institutions and their signers when they participate in the issuance and listing of securities. Article 54. Where a sponsor institution has any doubts about the professional opinions issued by an intermediary institution and its signer, it shall actively negotiate with this intermediary institution and may ask it to make explanations or to present the basis. Article 55. Where a sponsor institution has adequate reasons to hold that the professional opinions issued by an intermediary institution and its signer may have false information, misleading statement, serious omission or any other illegal or improper circumstance, it shall timely express its opinions; if the circumstance is serious, it shall report to the CSRC and the stock exchange. Article 56. An intermediary institution and its signer shall keep professional independence, shall prudently make a new judgment on the doubts or opinions raised by the sponsor institution, shall timely notify the sponsor institution and the issuer of its opinions, and may report to the relevant departments, the CSRC and the stock exchange in accordance with the law. CHAPTER VI SUPERVISORY MEASURES AND LEGAL LIABILITIES Article 57. The CSRC shall establish a sponsor credit-standing supervision system to conduct continuous and dynamic management regarding the registration of the sponsor institutions and sponsor representatives and to announce the records such as their professional practices, illegal acts, other bad acts and the supervision measures taken against them. Article 58. A sponsor institution and its sponsor representatives shall bear the corresponding liabilities from the day when the sponsor institution submits the sponsor documents to the CSRC. Article 59. Where the application documents for the registration of a sponsor institution submitted by a securities operating institution to the CSRC contain any false information, misleading statement or serious omission, the CSRC shall refuse to handle the registration, or remove the sponsor institution from the name list if it has completed the registration. Where the application documents for registration of a sponsor representative contain any false information, misleading statement or serious omission, the CSRC shall refuse to handle the registration, or remove him/her from the name list if it has completed the registration, and shall refuse to accept any application for the registration of sponsor representatives sponsored by this sponsor institution within 6 months from the day of removal. Article 60. Where any sponsor document submitted by a sponsor institution to the CSRC and the stock exchange contains any false information, misleading statement or serious omission, or where the sponsor institution induces, or assists the issuer or intermediary institutions to provide documents that contain any false information, misleading statement or serious omission, or is involved in this act, the CSRC shall not accept any sponsor made by the sponsor institution within 6 months from the day when this act is found; the CSRC shall not accept any sponsor for which the sponsor representatives are responsible within 12 months; with regard to any sponsor that has been accepted, the CSRC shall order the sponsor institution to replace the sponsor representatives; if the circumstance is serious, the CSRC shall remove the sponsor institution and the related sponsor representatives from the name list. Article 61. Where a sponsor institution or a sponsor representative induces, assists an issuer to interfere with the examination work of the CSRC and the Stock Issuance Examination Commission of the CSRC in violation of the law and administrative regulations or is involved in interfering with the examination work, the CSRC shall not accept any new sponsor made by the sponsor institution within 3 months from the day when it is found, shall not accept any sponsor for which the sponsor representatives are responsible within 6 months; with regard to any sponsor that has been accepted, the CSRC shall order the sponsor institution to replace the sponsor representatives; if the circumstance is serious, the CSRC shall remove the sponsor institution and the related sponsor representatives from the name list. Article 62. Where a sponsor institution, in violation of Article 34 of the present Measures, fails to establish archival files for the sponsor work or there is any false information or serious omission in the archival files for the sponsor work, the CSRC shall not accept any sponsor made by the sponsor institution within 3 months from the day when it is found, and shall not accept any sponsor for which the sponsor representatives are responsible within 6 months. Article 63. Where a sponsor institution or a sponsor representative is under investigation because the investment bank is suspected of having committed illegal offences, the CSRC shall suspend the acceptance of any sponsor made by the sponsor institution and any sponsor for which the relevant sponsor representatives are responsible. Article 64. Where a sponsor representative is criticized publicly by the stock exchange or the CSRC due to the operations of the investment bank or the issuer, for whose sponsor work he/she is responsible, during the period of the duty sponsor or during the period of continuous supervision and guidance, the CSRC shall not accept any specific sponsor for which he/she is responsible within 3 months from the day when he/she is openly criticized; with regard to any sponsor that has been accepted, the CRSC shall order the sponsor institution to replace him/her. Article 65. Where an issuer is under any of the following circumstances, the CSRC shall not accept any sponsor made by the sponsor institution within 3 months from the day when it is found, and shall remove the related sponsor representatives from the name list: (1) There is any false information, misleading statement or serious omission in the public financing documents or any other application document; (2) There occurs a business loss in the current year of the listing of securities; or (3) During the period of continuous supervision and guidance, there occurs any false information, misleading statement or serious omission in the information disclosure documents. Article 66. Where an issuer is under any of the following circumstances during the period of continuous supervision and guidance, the CSRC shall not, within 3 months from the day when it is found, accept any specific sponsor for which the related sponsor representatives are responsible: (1) The uses of more than 50 % of the aggregate amount of the fund raised in the current year are inconsistent with the commitments; (2) The profit from the main businesses of the current year slopes down by 50 % or more than that of the previous year; (3) There is any change of the big shareholders or the actual controller within 12 months from the day of the listing of securities; (4) More than 50% or more of the assets or main businesses accumulated has been restructured within 12 months from the day of the initial public offer of stocks; (5) More than 50% or more of the assets or main businesses accumulated has been restructured within 12 months from the day when a listed company issues new stocks or convertible corporate bonds, and that has not been disclosed in any public financing documents; or (6) Any other circumstance prescribed by the CSRC. Within a natural year, where an issuer is under two or more of the circumstances mentioned in the preceding paragraph and it is ranked among the top 10 violators, the CSRC shall refuse to accept any specific sponsor for which the related sponsor representatives are responsible within 12 months from the day when it is found; with regard to a sponsor that has been accepted, the CSRC shall order the sponsor institution to replace the sponsor representatives. Article 67. Where an issuer is under any of the following circumstances during the period of continuous supervision and guidance, the CSRC shall not accept any specific sponsor for which the related sponsor representatives are responsible within 3 months from the day when it is found: (1) The actual profits are at least 20% less than the expected profits; (2) The amount of the money involved in the connected transactions that are obviously unfair or are inconsistent with the prescribed procedures is more than 5% of the net assets upon final audit of the previous year, or the profit and loss affected is more than 10% of the net profits upon final audit of the previous year; (3) The sum involved in the big shareholders', the actual controller's or other connected parties' occupation of the issuer's resources in violation of the relevant provisions is more than 5% of the value of the net assets upon final audit of the previous year, or the profit and loss affected is more than 10% of the net profits upon final audit of the previous year; (4) The sum involved in providing guaranties to others in violation of the relevant provisions is more than 10 % of the net assets upon final audit of the previous year, or the profit and loss affected is more than 10% of the net profits upon final audit of the previous year; (5) The sum involved in purchasing or selling assets, in loans or asset management under authorization exceeds 10 % of the net assets upon final audit of the previous year, or the profit and loss affected is more than 10% of the net profits upon final audit of the previous year; (6) The senior managerial personnel are given an administrative sanction or subject to criminal liabilities due to their misappropriation of the interests of the issuer; or (7) Any other circumstances prescribed by the CSRC. Within a natural year, where an issuer is under two or more of the circumstances mentioned in the preceding paragraph and it is ranked among the top 10 violators, the CSRC shall refuse to accept any specific sponsor for which the related sponsor representatives are responsible within 6 months from the day when it is found; with regard to a sponsor that has been accepted, the CSRC shall order the sponsor institution to replace the sponsor representatives. Article 68. Where an issuer is under any of the following circumstances during the period of continuous supervision and guidance, the CSRC shall not accept any specific sponsor for which the related sponsor representatives are responsible within 3 months from the day when it is found: (1) Failing to disclose any regular report within the statutory time limit; (2) Failing to disclose any important change of performance or loss in accordance with the relevant provisions; (3) Failing to disclose any purchase or selling of assets in accordance with the relevant provisions; (4) Failing to disclose any connected transaction in accordance with the relevant provisions; (5) Failing to disclose, in accordance with the relevant provisions, any guaranty loss, disaster, calculation, preparation and recovery of assets depreciation, government subsidy and lawsuit compensations in accordance with the relevant provisions; (6) Failing to disclose any pledge of stock right or change of the actual controller in accordance with the relevant provisions; (7) Failing to disclose the information about any lawsuit, guaranty, important contract, modification to the financing project; or (8) Any other circumstance prescribed by the CSRC. Within a natural year, where an issuer is under two or more of the circumstances mentioned in the preceding paragraph and it is ranked among the top 10 violators, the CSRC shall refuse to accept any specific sponsor for which the related sponsor representatives are responsible within 6 months from the day when it is found; with regard to a sponsor that has been accepted, the CSRC shall order the sponsor institution to replace the sponsor representatives. Article 69. Within a natural year, if the sponsor representatives assigned by a sponsor institution is given at least 3 refusals under the supervision measures, or the accumulated time is longer than 12 months, and the rate between the accumulated time and number of the issuers sponsored by the sponsor institution in the current year is ranked among the top 3, the CSRC shall not accept any sponsor made by it within 3 months from the day when it is found; with regard to a sponsor that has been accepted, the CSRC shall order the sponsor institution to replace the sponsor representatives. Article 70. Where a sponsor institution or its sponsor representatives file a complaint about any supervision measures taken by the CSRC, the CSRC shall adopt the complaint if the following facts are supported by adequate proofs and it considers that the complaint is justified: (1) The issuer or its senior managerial personnel intentionally conceal any important fact, the sponsor institution and the sponsor representatives have performed the duties diligently and devotedly; (2) The issuer has made special hints in the public financing documents, the sponsor institution and the sponsor representatives have performed the duties diligently and devotedly; (3) Any force majeure causes the issuer's abnormal business performance or improper uses of the fund raised through financing or the issuer's failure to fulfill its commitments; (4) The issuer and its senior managerial personnel intentionally violate the laws and regulations during the period of continuous supervision and guidance, the sponsor institution and the sponsor representatives have voluntarily disclosed their illegal acts and have performed the duties diligently and devotedly; or (5) Any other circumstances under which the sponsor institution and the sponsor representatives have performed the duties diligently and devotedly. Article 71. Any issuer and its senior managerial personnel, not in accordance with the provisions of the present Measures, fail to hire a new sponsor institution after modifying the former, violate the laws and regulations during the period of continuous supervision and guidance and refuse to get right, or cause any other serious circumstance of failing to cooperate with the sponsor work, shall be recorded and announced by the CSRC. And the CSRC may take the following supervision measures as well: (1) To ask the issuer to report the information about the supervision and guidance offered by the sponsor institution to CSRC every month; (2) To ask the issuer to disclose its monthly financial report and the related materials; (3) To assign an intermediary institution to conduct inspection; (4) To ask the stock exchange to make special hints concerning the transactions of the securities of the issuer; and (5) To refuse to accept any application of the issuer for the issuance of new stocks or convertible corporate bonds within 2-5 years. Article 72. Where there is any false information, misleading statement or serious omission in the professional opinions issued by an intermediary institution and its signer, or any serious consequence is caused due to the intermediary institution's and its signer's un-cooperation with the sponsor work, the CSRC shall not accept its document within 6 months to 36 months from the day when it is found, and shall announce the handling result. Article 73. If any of the sponsor institutions and their sponsor representatives, issuers and their senior managerial personnel, intermediary institutions and their signers violate the present Measures, the CSRC may take the supervision measures such as making a hint in talks, paying important attention, ordering it /him to get right or determining him as improper to take the corresponding position. Article 74. Where any of the sponsor institutions and their sponsor representatives, the issuers and their senior managerial personnel and their signers should be given an administrative sanction due to intentionally violating the laws and administrative regulations, it/he shall be punished in accordance with the relevant regulations; if the circumstance is serious and it/he is suspected of committing any crime, it/he shall be transferred to the judicial organ and shall be subject to the criminal liabilities. CHAPTER VII SUPPLEMENTARY PROVISIONS Article 75. Upon the acknowledgement the CSRC, the Securities Association of China or any other institution may organize sponsor representative competence examinations. Article 76. The present Measures shall be implemented as of February 1, 2004. |
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