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Article 1. In order to meet the demands of opening the securities market, to strengthen and improve the supervision and administration of foreign-shared securities companies and to define the conditions and procedures for the establishment of foreign-shared securities companies, these Rules have been formulated in accordance with the relevant provisions of the Company Law and the Securities Law. กกกก Article 2. The foreign-shared securities companies used in these Rules shall refer to those of which the shares are transferred to or purchased by foreign shareholders or those that are co-founded by the foreign and domestic shareholders. Article 3. The China Securities Regulatory Commission (hereinafter referred to the CSRC) shall be responsible for the examination and approval, supervision and administration of foreign-shared securities companies. Article 4. The organizational structure of a foreign-shared securities company shall be limited company. The name, registered capital, establishment and duties of the departments of a foreign-shared securities company shall be compatible with the relevant provisions of the Company Law, the Securities Law and the CSRC. Article 5. A foreign-shared securities company may operate the following businesses: (1) Underwriting of shares (including RMB average shares and foreign shares) and bonds (including bonds issued by the government and companies); (2) Brokerage of foreign shares; (3) Brokerage and proprietary dealing of bonds (including bonds issued by the government and companies); (4) Other businesses approved by the CSRC. The foreign stocks used in the preceding paragraph shall refer to domestic listed foreign shares (B-shares) and overseas listed foreign shares. The securities company shall file the application for business scope to the CSRC according to the first paragraph of this Article. Those engaging in the lead underwriting of stocks shall obtain the license for share lead underwriting according to the provisions of the CSRC on the administration of share lead underwriting license for securities companies. Article 6. A foreign-shared securities company shall meet the following conditions: (1) The registered capital is in accordance with the provisions of the Securities Law on the registered capital of comprehensive securities companies; (2) The shareholders have the qualifications provided for by these Rules, and the proportion and form of their capital contribution are in accordance with the provisions of these Rules; (3) The personnel who have obtained the qualification for securities dealing according to the provisions of the CSRC shall be 50 or more, and there shall be necessary professionals of accounting, law and computer; (4) Having sound internal management, risk control and the separated management system of underwriting, brokerage and proprietary trading in the aspects of institution, personnel, information, business execution, etc., and having appropriate internal control technical system; (5) Having the business place meeting the requirements and the qualified dealing facilities; and (6) Other prudential conditions provided for by the CSRC. Article 7. The foreign shareholders of a foreign-shared securities company shall meet the following conditions: (1) Their home countries shall have sound legal and regulatory system of securities, and the securities regulatory bodies have signed the memorandums of understanding on securities regulation with the CSRC, and kept effective cooperative relation with the CSRC; (2) They have the legal qualification for securities dealing in their home countries and have engaged in the financial business for 10 years or more, and haven't been given major punishment by the securities regulatory bodies and judicial departments in the last 3 years; (3) The various risk regulatory indications are in accordance with the legal provisions and the requirements of the securities regulatory bodies of their home countries in the last 3 years; (4) Having sound internal control system; (5) Having good reputation and business performance on the international securities market; and (6) Other prudential conditions provided for by the CSRC. Article 8. The domestic shareholders of a foreign-shared securities company shall have the qualification for shareholders of securities companies provided for by the CSRC. Among the domestic shareholders of a foreign-shared securities company, at least one shall be a domestic-funded securities company. But the foreign-shared securities companies transferred from domestic-funded securities company shall be an exception. Article 9. The domestic shareholders may invest by cash and objects necessary for the business operation; while the foreign shareholders shall invest by freely convertible currency. Article 10. The shares held by foreign shareholders or the equity possessed by them (both directly and indirectly) in a foreign-shared securities company may not exceed one third of the total accumulatively. Among domestic shareholders, at least one domestic-funded securities company shall hold one third or more of the shares or equity in the foreign-shared securities company. As for a foreign-shared securities company transferred from domestic-funded securities company, at least one domestic shareholder shall hold one third or more of the shares. Article 11. The board chairman, general manager, and deputy general manager of a foreign-shared securities company shall have the qualifications for senior officers of securities company provided for by the CSRC. Article 12. To apply for establishing a foreign-shared securities company, the representative appointed by all the shareholders or the agent entrusted thereby shall submit the following documents to the CSRC: (1) Application form jointly signed by the legal representatives or the authorized representatives of the domestic and foreign shareholders; (2) Contract on establishing the foreign-shared securities company and the draft of articles of incorporation; (3) Application form for qualification of the board chairman, general manager and deputy general manager of the foreign-shared securities company; (4) Copies of the business licenses or registration certificates and the qualification certificates for securities business of the shareholders; (5) Audited financial statements of the foreign and domestic shareholders of the year prior to the application; (6) Statements issued by the securities regulatory bodies of the home countries of the foreign shareholders on whether those shareholders have the conditions as provided for in Items (2) and (3) of Article 7 of these Rules; and (7) Legal opinions issued by the law firms within China with the qualification for securities-related business. Article 13. The CSRC shall, according to the relevant laws, administration regulations and these rules, examine the application documents as provided for in the preceding paragraph, and shall make the decision on whether to approve it within 45 workdays from the day of receiving the application documents meeting the requirements, and shall notify the applicant in written form. For those not approved, reasons shall be explained in written form. กก Article 14. The shareholders shall contribute the capital in full or provide the cooperative conditions agreed upon, elect the board of directors, retain the senior officers, and apply to the administration for industry and commerce for registration of establishment and draw the business license within 6 months from the day on which the CSRC issued the documents of approval. Article 15. The board chairman or the authorized representative of a foreign-shared securities company shall, within 15 workdays from the day on which the business license is granted, submit the following documents to the CSRC to apply for the License for Securities Business: (1) Copy of the business license; (2) Articles of incorporation of the company; (3) Report on capital verification produced by the accounting firm within China with the qualification for securities-related business; (4) Name list and resumes of the directors, supervisors and senior officers, name list of the main business personnel and the copies of their qualification certificates for securities business; (5) Documents of the internal control system; and (6) Descriptions of the business place and dealing facilities. Article 16. The CSRC shall, according to the relevant laws, administrative regulations and these Rules, examine the application documents as provided for in the preceding paragraph, and shall make its decision within 15 workdays from the day of receiving the application documents meeting the requirements. For those meeting the conditions, the License for Securities Business shall be granted; for those not meeting the conditions, the license shall not be granted and reasons shall be explained in written form. Article 17. A foreign-shared securities company that hasn't obtained the License for Securities Business granted by the CSRC may not start business and engage in the securities business. Article 18. Where a domestic-funded securities company applies to be transferred to a foreign-shared securities company, the conditions as provided for in Article 6 of these Rules shall be met. The foreign shareholders purchasing or holding shares of domestic-funded securities companies shall meet the conditions as provided for in Article 7 of these Rules, and the proportion of the purchased shares or the capital contribution thereof shall meet the provisions of Article 10 of these Rules. Article 19. A domestic-funded securities company applying for transferring itself to a foreign-shared securities company shall submit the following documents to the CSRC: (1) Application form signed by the legal representative; (2) Decision of the shareholders' meeting on transferring itself to a foreign-shared securities company; (3) Draft of the articles of incorporation of the company; (4) Agreement on share transfer or capital contribution (agreement on share purchase); (5) Name list and resumes of the personnel appointed by the foreign investors to take post in that securities company; (6) Business licenses or registration certificates of the foreign shareholders and the copies of their qualification certificates for securities business; (7) Audited financial statements of the foreign shareholders of the year prior to the application; (8) Statements issued by the securities regulatory bodies of the home countries of the foreign shareholders on whether those shareholders have the conditions as provided for in Items (2) and (3) of Article 7 of these Rules; (9) Plans on cleaning up the business that can't be operated by a foreign-shared securities company according to law; and (10) Legal opinions issued by the law firm within China with the qualification for securities-related business. Article 20. The CSRC shall, according to the relevant law, administrative regulations and these Rules, examine the application documents as provided for in the preceding paragraph, and shall make its decision within 30 workdays from the day of receiving the application documents meeting the requirements, and shall notify the applying securities companies in written form, for those not approved, reasons shall be explained in written form. Article 21. Those securities companies approved to be transferred shall, within 6 months from the day the CSRC issued the documents of approval, handle the transfer of shares or increase of capital, clean up the business that can't be operated by a foreign-shared securities company, and shall apply to the administration for industry and commerce for registration of alteration and draw the new business license with the original one. Article 22. A securities company approved to be transferred shall, within 15 workdays from the day of registration of transfer, submit the following documents to the CSRC, and apply for drawing the new License for Securities Business: (1) Copy of the business license; (2) Articles of incorporation of the foreign-shared company; (3) Original license for securities business and the copy thereof of the company; (4) Report on capital verification issued by the accounting firm within China with the qualification for securities business; (5) Report on cleaning up the business that can't be operated by a foreign-shared securities company according to law; and (6) Legal opinions and verification report on the aforesaid cleaning-up work issued by the law firm and accounting firm with the qualification for securities-related business. Article 23. The CSRC shall, according to the relevant laws, administration regulations and these Rules, examine the application documents as provided for in the preceding paragraph, and shall make the decision on whether to approve it within 45 workdays from the day of receiving the application documents meeting the requirements, for those meeting the conditions, the new License for Securities Business shall be granted to them, and for those not meeting the conditions, the new license shall not be granted, and reasons shall be explained in written form. Article 24. A securities company newly established or continuing to exist after the merger of foreign-shared securities companies or the merger of foreign-shared securities companies and domestic-funded securities companies shall meet the conditions for establishment of foreign-shared securities company as provided for by these Rules; its business scope, the proportion of the shares or equity held by foreign shareholders shall be in accordance with the provisions of these Rules. Where there are foreign shareholders in a securities company established upon the splitting of a foreign-shared securities company, its business scope and the proportion of the shares or equity held by the foreign shareholders shall be in accordance with the provisions of these Rules. Article 25. The application documents and materials submitted to the CSRC according to the provisions of these Rules shall be in Chinese language. Where the documents and materials of the foreign shareholders and those issued by the securities regulatory bodies of their home countries are in foreign languages, the Chinese versions that are consistent with the original documents shall be attached. Where the documents and materials submitted by the applicant fail to sufficiently state the information of the applicant, the CSRC may ask the applicant to make supplementary statements. Article 26. Where investors from the Special Administration of Hong Kong, the Special Administration of Macao and the Taiwan area participate in securities companies, these Rules shall be applied in analog. Article 27. The establishment, alteration, termination, business activities, supervision and management shall be subject to other relevant provisions of the CSRC if there is no such provisions in there Rules. Article 28. These Rules shall come into force as of July 1, 2002. |
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