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The Interim Measures for
the Stock Issuance and Listing
Recommendation SystemOrder of the China Securities Regulatory
Commission No. 18
December 28th, 2003
Chapter I General Provisions
Article 1 With a view to regulating the activities of listing and
issuance of securities, to enhancing the quality of listed companies
and the practices of securities operating institutions, to
protecting 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 apply 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
recommendation duties, shall register as the recommendation
institutions in accordance with the present Measures.
Article 4 The recommendation institutions shall comply with the
laws, administrative regulations, the rules of the China Securities
Regulatory Commission (hereinafter referred to as CSRC) and the
bylaws of the securities industry, shall recommend 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 recommendation institution performs the recommendation
duties, it shall designate some recommendation representatives to
take charge of the specific recommendation work.
Article 5 The recommendation institutions shall be responsible for
the main underwriting work of the issuance of securities, and shall
check the public offer financing documents according to the law, and
shall give a recommendation advice to the CSRC.
The recommendation 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 as 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 as "
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 recommendation institutions to fulfill the
recommendation duties.
The recommendation institution and the recommendation
representatives'' fulfillment of their duties cannot be deemed as 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, according to the laws, administrative
regulations and the present Measures, conduct supervision over and
administration of the pertinent activities of the recommendation
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 recommendation institutions and the recommendation
representatives.
Chapter II Registration of Recommendation Institutions and
Recommendation Representatives
Article 8 Any securities operating institution or individual that
has been registered in the CSRC and is on the name list of the
recommendation institutions and the recommendation representatives
(hereinafter referred to as the name list) may engage in the
recommendation work in accordance with the provisions of the present
Measures. Any one who fails to be registered as a recommendation
institution or recommendation representative in the CSRC and to be
on the name list may not engage in the recommendation work.
Article 9 Where a securities operating institution files an
application for being registered as a recommendation institution, it
shall be a comprehensive securities company and shall submit to the
CSRC a statement or commitments expressing its willingness to
fulfill the recommendation duties.
Article 10 Where a securities operating institution is under any of
the following circumstances, it shall not be registered as a
recommendation institution:
(1) There are less than 2 recommendation 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 because of
violations of laws and regulations in the recent 24 months; or
(4) Any other circumstance prescribed by the CSRC.
Article 11 Where an individual files an application for being
registered as a recommendation representative, he/she shall file an
application to the CSRC via the recommendation 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 as prescribed by the
CSRC;
(2) Having taken and passed the recommendation representatives''
competence examination acknowledged by the CSRC;
(3) Having obtained a recommendation letter issued by the
recommendation 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 because of violations of the law and regulations within the
recent 36 months; and
(6) Other conditions as 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 as of the day
when the change occurs.
Article 13 Where an applicant meets the conditions, the CSRC shall,
within 20 working days as of the day when it accepts his/her
registration application, handle the registration formalities, list
him/her in the name list and make an announcement. In case 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 recommendation institution shall, within 1 month as of
the day when it or its recommendation representatives complete the
registration or as of 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 recommendation institution or of its
recommendation representatives, the recommendation institution
shall, within 5 working days as of the day when the change occurs,
report to the CSRC.
Article 16 Where a recommendation institution is under any of the
circumstances as prescribed in Article 10 of the present Measures,
the CSRC shall remove it and its recommendation representatives from
the name list.
Article 17 Where a recommendation 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 as required by the
CSRC;
(3) The recommendation institution has withdrawn its recommendation
letter;
(4) He/She has been transferred from a recommendation 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
because of violations of the law and regulations or receives a
criminal punishment because of committing a crime; or
(7) Other circumstances prescribed by the CSRC.
Article 18 Where a recommendation 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 recommendation
representative. Where it has been more than 6 months as of the day
when he/she is removed from the name list, he /she shall have the
recommendation representatives'' competence examination once again.
Chapter III Duties of the Recommendation Institutions
Article 19 A recommendation institution shall dutifully recommend
the issuance and listing of the securities of an issuer. After the
listing of the securities of an issuer, the recommendation
institution shall continuously supervise and guide the issuer to
fulfill the obligations such as operating normatively, keeping its
promise, and disclosing the information, etc..
Article 20 Before a recommendation institution recommends the
initial public offer of stocks of an issuer, it shall give guidance
to the issuer according to the requirements of the CSRC.
Where the recommendation institution is to recommend the initial
public offer of an issuer guided by any other institution, it shall,
prior to making the recommendation, re-provide guidance to the
issuer for at least 6 months.
Article 21 The recommendation institution may not recommend an
issuer to issue securities by way of listing, until it meets the
following requirements upon guidance:
(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 obstruct the sustained
normative operation;
(4) The senior managerial persons have grasped the laws and
administrative regulations and other related knowledge as 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 recommendation institution recommends 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 recommendation
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 recommendation 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 recommendation 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 recommendation 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 recommendation institution shall make the following
commitments in its recommendation 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 recommendation representatives
assigned by it and the related personnel of this recommendation
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 recommendation
documents and the other documents relating to the fulfillment of the
recommendation 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 according to the present Measures; and
(9) Other commitments as prescribed by the CSRC.
Article 26 The recommendation institution shall, after it has
submitted the recommendation documents to the CSRC, shall actively
help the CSRC to examine the said documents, and 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 in
relation to the current issuance and listing of securities according
to the requirements of the CSRC;
(3) To assign the recommendation representatives to conduct
professional communications with the CSRC; and
(4) Other tasks prescribed by the CSRC.
Article 27 When recommending the listing of the securities of an
issuer, the recommendation institution shall submit to the stock
exchange a recommendation letter and the pertinent documents as
required in the listing rules in the stock exchange, and shall
report them to the CSRC for archival purposes.
A recommendation letter shall contain the commitments as prescribed
in Article 25 of the present Measures, the arrangement in relation
to the continuous supervision over the issuer and other matters as
required by the stock exchange.
Article 28 The recommendation institution shall determine the items
and emphases of the continuous supervision and guidance according to
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 in regard to 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 in regard to 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 in regard to 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 expressing its opinions; and
(7) Other tasks as required by the CSRC and stipulated in the
recommendation agreement.
Article 29 As for 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 for 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 as of 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 recommendation
task, the recommendation institution shall complete it continuously.
During the conscientious recommendation period or the continuous
supervision and guidance period, if the recommendation institution
fails to fulfill its duties diligently and devotedly, it shall bear
the corresponding liabilities after the expiration of the period of
continuous supervision and guidance.
Chapter IV Recommendation Procedures
Article 31 A recommendation institution shall establish and perfect
the internal control system of the recommendation work.
Article 32 A recommendation institution shall establish and perfect
the duty investigation system in regard to the issuance and listing
of securities, the internal examination system concerning the
issuance and listing application documents and the system in regard
to the continuous supervision and guidance to the issuers after the
listing of securities.
Article 33 A recommendation institution shall establish and perfect
the system in regard to the continuous training of the
recommendation representatives and other personnel engaging in
recommendation work.
Article 34 A recommendation institution shall establish and perfect
the system in regard to the archival files. It shall establish
separate archival files for each recommendation project.
The recommendation archives shall be authentic, exact and complete,
and shall be preserved for not less than 10 years.
Article 35 Where any of the following circumstances exists that may
affect the impartial performance of duties of recommendation, a
recommendation institution may not recommend the issuance and
listing of the securities of any issuer:
(1) The aggregate shares of the recommendation 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
recommendation institution;
(3) Any of the recommendation institution''s recommendation
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 recommendation duties; or
(4) The recommendation institution, or any of its big shareholders,
actual controllers and important connected parties provide guaranty
or financing services to the issuer.
Article 36 The recommendation institution and the issuer shall
conclude a recommendation agreement so as to specify their
respective rights and obligations.
Article 37 The recommendation institution shall, in accordance with
the bylaws of the securities industry and by consulting the issuer,
determine the relevant fees for the performance of the
recommendation duties.
Article 38 Where a recommendation agreement is terminated prior to
the publication of the public offer financing documents, the
recommendation institution and the issuer shall respectively report
to the CSRC and give it explanations within 5 working days as of the
day of termination.
Article 39 After the publication of the public offer financing
documents, the recommendation institution and the issuer shall not
terminate the recommendation agreement, except that the issuer hires
another recommendation institution to apply for the issuance of new
stocks or convertible corporate bonds and that the recommendation
institution has been removed from the name list by the CSRC.
Where a recommendation agreement is terminated, the recommendation
institution and the issuer shall report to the CSRC and the stock
exchange and give them explanations within 5 working days as of the
day of termination.
Article 40 Where the recommendation institution is removed from the
name list of the CSRC during the period of continuous supervision
and guidance, the issuer shall hire another recommendation
institution within one month.
Article 41 The other recommendation 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 recommendation institution hired shall carry out the
recommendation work and bear the corresponding liabilities as of the
day when the recommendation agreement is concluded. The former
recommendation institution shall bear the corresponding liabilities
during the period of the conscientious recommendation and the period
of continuous supervision and guidance.
Article 42 A recommendation institution shall assign 2
recommendation representatives to take charge of the specific
recommendation 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 recommendation institution efficiently
cooperate with each other based on division of labor.
In addition, the recommendation institution shall assign a project
principal. A recommendation representative may take the position of
a project principal.
Article 43 After the issuance of the securities of an issuer, the
recommendation institution shall not change the recommendation
representatives, except that they are removed from the name list by
the CSRC because of being transferred from the recommendation
institution or any other circumstance.
Where the recommendation institution changes the recommendation
representatives, it shall notify the issuer, and shall report and
give explanations to the CSRC and the stock exchange. The former
recommendation representatives shall bear the corresponding
liabilities for the period during which they take charge of the
specific recommendation work.
Article 44 The legal representative of the recommendation
institution, the person-in-charge of the business department of the
investment bank, the person-in-charge of internal examination, the
recommendation representatives and project principal shall affix
their signatures to the recommendation documents, and list their
names in the issuer''s public financing documents.
Article 45 The recommendation institution shall in time notify the
issuer of the opinions expressed for the performance of the
recommendation duties, shall keep them as its work archives, and may
make an announcement according to the provisions of the present
Measures and report them to the CSRC and the stock exchange.
Article 46 The recommendation institution shall submit a
"recommendation summary report" to the CSRC and the stock exchange
within 10 working days after completing the continuous supervision
and guidance work.
Article 47 Where a recommendation representative engaging in
recommendation work is interfered with by any unjustifiable factor,
he/she shall independently keep his/her professional opinions, which
shall be recorded in the recommendation archives.
Article 48 Since all the recommendation representatives and other
personnel engaging in recommendation 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 Recommendation Work
Article 49 A recommendation institution may, when performing the
recommendation duties, exercise the following rights to an issuer:
(1) To ask the issuer to notify it of the information according to
the provisions of the present Measures and in the form as stipulated
in the recommendation 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 as provided by the CSRC or stipulated
in the recommendation agreement.
Article 50 Where an issuer is under any of the following
circumstances, it shall in time inform or consult the recommendation
institution, and shall, according to the stipulations in the
agreement, submit the relevant documents to the recommendation
institution:
(1) Modifying its commitments in regard to 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; and
(5) Other matters as prescribed by the CSRC or as stipulated in the
recommendation agreement.
Article 51 Prior to the issuance of securities, in case the issuer
fails to cooperate with the recommendation institution to perform
the recommendation duties, the recommendation institution shall
express its reservations, and shall give explanations in the
recommendation documents; in case the circumstance is serious, it
shall refuse to make recommendation or withdraw the recommendation
that it has already completed.
Article 52 After the issuance of securities, in case the
recommendation 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; in case the circumstance is serious,
it shall report to the CSRC and the stock exchange.
Article 53 A recommendation 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 recommendation 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 recommendation institution has adequate reasons
to ensure 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 in time express its opinions; in case 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 recommendation institution,
shall in time notify the recommendation institution and the issuer
of its opinions, and may report to the relevant departments, the
CSRC and the stock exchange according to the law.
Chapter VI Supervisory Measures and Legal Liabilities
Article 57 The CSRC shall establish a recommendation credit-standing
supervision system to conduct continuous and dynamic management in
regard to the registration of the recommendation institutions and
recommendation 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 recommendation institution and its recommendation
representatives shall bear the corresponding liabilities as of the
day when the recommendation institution submits the recommendation
documents to the CSRC.
Article 59 Where the application documents for the registration of a
recommendation 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 recommendation institution from the name
list if it has completed the registration.
Where the application documents for registration of a recommendation
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 recommendation representatives
recommended by this recommendation institution within 6 months as of
the day of removal.
Article 60 Where any recommendation document submitted by a
recommendation institution to the CSRC and the stock exchange
contains any false information, misleading statement or serious
omission, or where the recommendation 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
recommendation made by the recommendation institution within 6
months as of the day when this act is found; the CSRC shall not
accept any recommendation for which the recommendation
representatives are responsible within 12 months; as for any
recommendation that has been accepted, the CSRC shall order the
recommendation institution to replace the recommendation
representatives; in case the circumstance is serious, the CSRC shall
remove the recommendation institution and the related recommendation
representatives from the name list.
Article 61 Where a recommendation institution or a recommendation
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 recommendation made by the
recommendation institution within 3 months as of the day when it is
found, shall not accept any recommendation for which the
recommendation representatives are responsible within 6 months; as
for any recommendation that has been accepted, the CSRC shall order
the recommendation institution to replace the recommendation
representatives; in case the circumstance is serious, the CSRC shall
remove the recommendation institution and the related recommendation
representatives from the name list.
Article 62 Where a recommendation institution, in violation of
Article 34 of the present Measures, fails to establish archival
files for the recommendation work or there is any false information
or serious omission in the archival files for the recommendation
work, the CSRC shall not accept any recommendation made by the
recommendation institution within 3 months as of the day when it is
found, and shall not accept any recommendation for which the
recommendation representatives are responsible within 6 months.
Article 63 Where a recommendation institution or a recommendation
representative is under investigation because the investment bank is
suspected of having committed illegal offences, the CSRC shall
suspend the acceptance of any recommendation made by the
recommendation institution and any recommendation for which the
relevant recommendation representatives are responsible.
Article 64 Where a recommendation representative is criticized
openly by the stock exchange or the CSRC because of the operations
of the investment bank or the issuer, for whose recommendation work
he/she is responsible, during the period of the duty recommendation
or during the period of continuous supervision and guidance, the
CSRC shall not accept any specific recommendation for which he/she
is responsible within 3 months as of the day when he/she is openly
criticized; as for any recommendation that has been accepted, the
CRSC shall order the recommendation institution to replace him/her.
Article 65 Where an issuer is under any of the following
circumstances, the CSRC shall not accept any recommendation made by
the recommendation institution within 3 months as of the day when it
is found, and shall remove the related recommendation
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 as of the day when it
is found, accept any specific recommendation for which the related
recommendation representatives are responsible:
(1) The uses of more than 50 % of the aggregate amount of the fund
raised in the current year are not in conformity 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 as of 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 as of 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 as of 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 as prescribed by the CSRC.
Within a natural year, where an issuer is under two or more of the
circumstances as mentioned in the preceding paragraph and it is
ranked among the top 10 violators, the CSRC shall refuse to accept
any specific recommendation for which the related recommendation
representatives are responsible within 12 months as of the day when
it is found; as for a recommendation that has been accepted, the
CSRC shall order the recommendation institution to replace the
recommendation 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 recommendation for
which the related recommendation representatives are responsible
within 3 months as of the day when it is found:
(1) The actual profits are at least 27 % less than the expected
profits;
(2) The amount of the money involved in the connected transactions
that are obviously unfair or not conformity 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 violating 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
punishment or subject to criminal liabilities because of their
misappropriation of the interests of the issuer; or
(7) Any other circumstances as prescribed by the CSRC.
Within a natural year, where an issuer is under two or more of the
circumstances as mentioned in the preceding paragraph and it is
ranked among the top 10 violators, the CSRC shall refuse to accept
any specific recommendation for which the related recommendation
representatives are responsible within 6 months as of the day when
it is found; as for a recommendation that has been accepted, the
CSRC shall order the recommendation institution to replace the
recommendation 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 recommendation for
which the related recommendation representatives are responsible
within 3 months as of 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
according to the relevant provisions;
(3) Failing to disclose any purchase or selling of assets according
to the relevant provisions;
(4) Failing to disclose any connected transaction according to the
relevant provisions;
(5) Failing to disclose, according to the relevant provisions, any
guaranty loss, disaster, calculation, preparation and recovery of
assets depreciation, government subsidy and lawsuit compensations
according to the relevant provisions;
(6) Failing to disclose any pledge of stock right or change of the
actual controller according to the relevant provisions;
(7) Failing to disclose the information about any lawsuit, guaranty,
important contract, modification to the financing project according
to the relevant provisions; or
(8) Any other circumstance as prescribed by the CSRC.
Within a natural year, where an issuer is under two or more of the
circumstances as mentioned in the preceding paragraph and it is
ranked among the top 10 violators, the CSRC shall refuse to accept
any specific recommendation for which the related recommendation
representatives are responsible within 6 months as of the day when
it is found; as for a recommendation that has been accepted, the
CSRC shall order the recommendation institution to replace the
recommendation representatives.
Article 69 Within a natural year, where the recommendation
representatives assigned by a recommendation 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 recommended by the recommendation
institution in the current year is ranked among the top 3, the CSRC
shall not accept any recommendation made by it within 3 months as of
the day when it is found; as for a recommendation that has been
accepted, the CSRC shall order the recommendation institution to
replace the recommendation representatives.
Article 70 Where a recommendation institution or its recommendation
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 recommendation institution and the
recommendation representatives have performed the duties diligently
and devotedly;
(2) The issuer has made special hints in the public financing
documents, and the recommendation institution and the recommendation
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 recommendation institution and the
recommendation representatives have voluntarily disclosed their
illegal acts and have performed the duties diligently and devotedly;
or
(5) Any other circumstances under which the recommendation
institution and the recommendation representatives have performed
the duties diligently and devotedly.
Article 71 Any issuer and its senior managerial personnel, not
according to the provisions of the present Measures, fail to hire a
new recommendation institution after modifying the former, violate
the laws and regulations during the period of continuous supervision
and guidance and refuse to set right, or cause any other serious
circumstance of failing to cooperate with the recommendation work,
shall be recorded and announced by the CSRC. And the CSRC may take
the following supervision measures as well:
(1) Asking the issuer to report the information about the
supervision and guidance offered by the recommendation institution
to CSRC every month;
(2) Asking the issuer to disclose its monthly financial report and
the related materials;
(3) Assigning an intermediary institution to conduct inspection;
(4) Asking the stock exchange to make special hints concerning the
transactions of the securities of the issuer; and
(5) Refusing 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 because of the intermediary institution''s and
its signer''s un-cooperation with the recommendation work, the CSRC
shall not accept its document within 6 months to 36 months as of the
day when it is found, and shall announce the handling result.
Article 73 Where any of the recommendation institutions and their
recommendation 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 set right or determining him as improper to take the
corresponding position.
Article 74 Where any of the recommendation institutions and their
recommendation representatives, the issuers and their senior
managerial personnel and their signers should be given an
administrative punishment because of intentionally violating the
laws and administrative regulations, it/he shall be punished in
accordance with the relevant regulations; in case 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 of the CSRC, the Securities
Association of China or any other institutions may organize
recommendation representative competence examinations.
Article 76 The present Measures shall come into force as of February
1st, 2004. |
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