Order of the President of the People's Republic of China 

No. 37

The Securities Law of the People's Republic of China, revised and adopted at the 15th Meeting of the Standing Committee of the Thirteenth National People's Congress on December 28, 2019, is hereby promulgated and shall go into effect on March 1, 2020. 

Xi Jinping 

President of the People's Republic of China 

December 28, 2019 

Securities Law of the People's Republic of China

(Adopted at the 6th Meeting of the Standing Committee of the Ninth National People's Congress on December 29, 1998; amended for the first time in accordance with the Decision on Amending the Securities Law of the People's Republic of China as adopted at the 11th Meeting of the Standing Committee of the Tenth People's Congress on August 28, 2004; revised for the first time at the 18th Meeting of the Standing Committee of the Tenth National People's Congress on October 27, 2005; amended for the second time in accordance with the Decision of the Standing Committee of the National People's Congress on Amending the Cultural Relics Protection Law of the People's Republic of China and Other Eleven Laws as adopted at the 3rd Meeting of the Standing Committee of the Twelfth National People's Congress on June 29, 2013; amended for the third time in accordance with the Decision of the Standing Committee of the National People's Congress on Amending Five Laws Including the Insurance Law of the People's Republic of China as adopted at the 10th Meeting of the Standing Committee of the Twelfth National People's Congress on August 31, 2014; and revised for the second time at the 15th Meeting of the Standing Committee of the Thirteenth National People's Congress on December 28, 2019) 

Contents 

Chapter I General Provisions 

Chapter II Issuance of Securities 

Chapter III Trading of Securities 

Section 1 General Provisions 

Section 2 Listing of Securities 

Section 3 Prohibited Acts of Transactions 

Chapter IV Acquisition of Listed Companies 

Chapter V Information Disclosure 

Chapter VI Protection of Investors 

Chapter VII Securities Trading Venues 

Chapter VIII Securities Companies 

Chapter IX Securities Registration and Clearing Institution 

Chapter X Securities Service Providers 

Chapter XI Securities Association 

Chapter XII Securities Regulatory Authority 

Chapter XIII Legal Liability 

Chapter XIV Supplementary Provisions 

Chapter I General Provisions 

Article 1 This Law is enacted in order to standardize the issuance and transaction of securities, protect the legitimate rights and interests of investors, maintain the socioeconomic order and public interests of society and promote the development of the socialist market economy. 

Article 2 This Law shall apply to the issuance and transaction of stocks, corporate bonds, depository receipts and other securities lawfully recognized by the State Council within the territory of the People's Republic of China. Where there are no such provisions in this Law, the provisions of the Company Law of the People's Republic of China and other laws and administrative regulations shall apply. 

This Law shall apply to the government bonds and shares of securities investment funds listed for transaction. Where there are specific provisions in other laws and administrative regulations, such specific provisions shall apply. 

The administrative measures of issuance and transaction of asset-backed securities and asset management products shall be formulated by the State Council in accordance with the principles of this Law. 

Where the issuance and transaction of securities outside the territory of the People's Republic China have disrupted the market order within the territory of the People's Republic of China and damaged the legitimate rights and interests of investors within the territory, such activities shall be handled and investigated for legal responsibility in accordance with the relevant provisions of this Law. 

Article 3 The issuance and transaction of securities shall follow the principles of transparency, fairness, and equitability. 

Article 4 The parties involved in the issuance and transaction of securities shall enjoy equal legal status and shall abide by the principles of voluntariness, compensation and good faith. 

Article 5 The issuance and transaction of securities shall comply with laws and administrative regulations. Any fraud, insider trading and manipulation of the securities market shall be prohibited. 

Article 6 The separated operation and management shall apply to securities business, banking business, trust business and insurance business. The securities companies and banks, trust business institutions and insurance business institutions shall be established separately, unless otherwise provided for by the State. 

Article 7 The securities regulatory authority under the State Council shall carry out centralized and unified supervision and administration of the securities market nationwide according to law. 

The securities regulatory authority under the State Council may, as it deems necessary, establish dispatched offices which shall perform the duties of supervision and administration according to authorization. 

Article 8 The national audit institutions shall carry out audit supervision of the securities exchanges, securities companies, securities registration and clearing institutions and securities regulatory bodies according to law. 

Chapter II Issuance of Securities 

Article 9 Public issuing of securities shall comply with the requirements provided for in laws and administrative regulations, and shall be reported for registration according to law to the securities regulatory authority under the State Council or the department authorized by the State Council. Without registration according to law, no entity or individual shall make public offering of securities. The coverage and implementation procedures of the registration system for securities issuance shall be formulated by the State Council. 

It shall be deemed as a public offering under one of the following circumstances: 

(1) Issuing securities to non-specific investors; 

(2) Issuing securities to specific investors with an aggregate number of 200 or more excluding the number of the issuer's employees participating in an employee stock ownership plan according to law; 

(3) Other acts of issuance as provided for in laws and administrative regulations. 

Any means of advertising, general solicitation, or any disguised form of public offering shall not be adopted for non-public offering of securities. 

Article 10 An issuer that applies for public offering of stocks or convertible corporate bonds by means of underwriting according to law or applies for public offering of other securities which is subject to sponsor system as provided by laws and administrative regulations shall hire a securities company as its sponsor. 

The sponsor shall observe business rules and industry standards, act in good faith and with due care and diligence, verify with prudence the application documents and information disclosure materials of the issuer, and supervise and guide the issuer to conduct standard operation. 

The administrative measures of sponsors shall be formulated by the securities regulatory authority under the State Council. 

Article 11 A public offering of stocks for the establishment of a company limited by shares shall comply with the requirements as provided for in the Company Law of the People's Republic of China and other requirements of the securities regulatory authority under the State Council which are approved by the State Council. An application for public offering of stocks and the following documents shall be submitted to the securities regulatory authority under the State Council: 

(1) The articles of association of the company; 

(2) The founder's agreement; 

(3) The name or title of the founder, the number of shares subscribed by the founder, the type of capital contribution as well as the capital verification certificate; 

(4) The prospectus; 

(5) The name and address of the bank receiving the funds generated from the issuance of stocks; and 

(6) The name of the underwriting institutions and the relevant agreements. 

Where a sponsor shall be hired as provided for in this Law, a sponsor letter for issuance issued by the sponsor shall also be submitted. 

Where the establishment of a company is subject to approval as provided for in laws and administrative regulations, the relevant approval documents shall be submitted as well. 

Article 12 A company that makes an initial public offering of new stocks shall comply with the following requirements: 

(1) Having a sound and well-operated organizational structure; 

(2) Having sustainable operation ability; 

(3) An unqualified auditor's report on its financial and accounting reports for the latest three years; 

(4) The issuer as well as its controlling shareholders and the actual controller have not committed any crime such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; and 

(5) Other requirements of the securities regulatory authority under the State Council which are approved by the State Council. 

A listed company that issues new stocks shall comply with the requirements of the securities regulatory authority under the State Council which are approved by the State Council. The specific administrative measures shall be formulated by the securities regulatory authority under the State Council. 

The public offering of depository receipts shall comply with the requirements for an initial public offering of a new stock as well as other requirements provided by the securities regulatory authority under the State Council. 

Article 13 A company that issues new stocks shall submit an application for public offering of stocks together with the following documents: 

(1) The business license of the company; 

(2) The articles of association of the company; 

(3) The resolution of the general meeting of shareholders; 

(4) The prospectus or other documents on public offering of stocks; 

(5) The financial and accounting reports; and 

(6) The name and address of the bank receiving the funds generated from the public offering of stocks. 

Where a sponsor shall be hired according to this Law, the sponsor letter of issuance issued by the sponsor shall also be submitted. Where underwriting is adopted according to this Law, the name of the underwriting institutions and the relevant agreement shall be submitted as well. 

Article 14 The company shall use the funds raised from public offering of stocks in accordance with the fund uses set forth in the prospectus for the stocks or other documents on public offering. Any change of the fund uses shall be approved by a resolution adopted at the general meeting of shareholders. Where the company fails to correct any unauthorized change of the fund uses or where any alternative use of the funds fails to be approved by the general meeting of shareholders, the company shall not be allowed to issue new stocks. 

Article 15 A public offering of corporate bonds shall comply with the following requirements: 

(1) Having a sound and well-operating organizational structure;

(2) The average distributable profits over the latest three years are sufficient to pay one year interest of the corporate bonds; and 

(3) Other requirements specified by the State Council. 

The funds raised through public offering of corporate bonds shall be used in accordance with the fund uses set forth in the prospectus of corporate bonds. Any change of the fund uses shall be approved by a resolution adopted at the bondholders' meeting. The funds raised from public offering of corporate bonds shall not be used to cover deficit or non-productive expenditure. 

Where a listed company publicly offers convertible corporate bonds, it shall comply with the provisions in the second paragraph of Article 12 of this Law in addition to the requirement provided in the first paragraph, except where it converts its convertible corporate bonds by acquiring its own stock shares in accordance with the prospectus of corporate bonds. 

Article 16 As for an application for offering corporate bonds publicly, the following documents shall be submitted to the department authorized by the State Council or the securities regulatory authority under the State Council: 

(1) The business license of the company; 

(2) The articles of association of the company; 

(3) The prospectus for corporate bonds; and 

(4) Other documents specified by the department authorized by the State Council or the securities regulatory authority under the State Council. 

Where a sponsor shall be hired as provided by this Law, a sponsor letter of issuance issued by the sponsor shall also be submitted. 

Article 17 No public offering of corporate bonds shall be made under one of the following circumstances: 

(1) The fact that there is a default or a delay in payment of principal and interest on publicly offered corporate bonds or other debts, and such situation still continues; or 

(2) Any change of the uses of the funds raised through public offering of corporate bonds in violation of the provisions of this Law. 

Article 18 The format and method for submitting application documents for public offering of securities by an issuer according to law shall be formulated by the competent organ or department legally responsible for the registration. 

Article 19 The application documents for securities issuance submitted by an issuer shall be truthful, accurate and complete and shall fully disclose the information necessary for investors to make value judgment and investment decision. 

A securities service provider and its staff members that issue the relevant documents for securities issuance shall strictly perform their statutory duties and ensure the truthfulness, accuracy and completeness of the documents issued. 

Article 20 Where an issuer applies for an initial public offering of a new stock, it shall disclose the relevant application documents in advance in accordance with the regulations of the securities regulatory authority under the State Council after submitting such documents. 

Article 21 The securities regulatory authority under the State Council or other department authorized by the State Council shall be responsible for the registration of applied securities issuance in accordance with statutory requirements. The specific measures for the registration of public offering of securities shall be formulated by the State Council. 

Pursuant to the requirements of the State Council, stock exchanges may examine and verify applications for public offering of securities, determine whether the issuers comply with the requirements on issuance and information disclosure, and shall urge the issuers to improve and complete the information to be disclosed. 

The persons participating in the registration of applied securities issuance as provided for in the two preceding paragraphs shall not have any stake with applicants for issuance, shall not accept directly or indirectly any gift from the applicants, shall not hold any securities to be registered for issuance, and shall not contact issuers in private. 

Article 22 The securities regulatory authority under the State Council or the department authorized by the State Council shall, within three months as of the date of accepting an application for securities issuance, make a decision in accordance with statutory requirements and procedures on whether or not to register the securities offering. The time for an issuer to supplement or modify its application documents for issuance according to the relevant requirements shall not be included in the aforesaid period. In the case an application for registration is denied, the reason shall be given. 

Article 23 After an applied securities issuance is registered, the issuer shall announce the public offering documents according to the provisions of laws and administrative regulations before publicly offering securities and shall make the documents publicly accessible in a designated place. 

No insider shall disclose or divulge the information on securities issuance before such information is announced according to law. 

No issuer shall issue any securities before the public offering documents are announced. 

Article 24 Where a decision to register the securities issuance is found not in conformity with statutory requirements and procedures and if the securities have not been issued, the securities regulatory authority under the State Council or the department authorized by the State Council shall revoke the said decision and terminate the issuance. If the securities have been issued but not yet listed, the said decision shall be revoked and the issuer shall refund the securities holders according to the issuing price plus interest as calculated at the bank deposit rate for the corresponding period. The controlling shareholders, the actual controller as well as the sponsor, unless one is able to prove that he is not at fault, shall bear several and joint liabilities together with the issuer. 

Where an issuer of stocks has concealed any important fact or fabricated any material misrepresentation in securities issuance documents such as the prospectus, and if the stocks have been issued and listed, the securities regulatory authority under the State Council may order the issuer to repurchase the securities, or order the responsible controlling shareholders and the actual controller of the issuer to buy back the securities. 

Article 25 After stocks have been issued according to law, the issuer itself shall be responsible for any change in its operations and income, while the investors themselves are responsible for any investment risk caused by such change. 

Article 26 Where an issuer issues securities to non-specific investors and if the securities need to be underwritten by a securities company as required by laws and administrative regulations, the issuer shall enter into an underwriting agreement with the securities company. Securities underwriting business takes the form of best efforts underwriting or firm commitment underwriting. 

Best efforts underwriting refers to an underwriting form through which securities company sells the securities as a proxy of an issuer and returns all the securities unsold to the issuer upon expiration of the underwriting period. 

Firm commitment underwriting refers to an underwriting form through which a securities company purchases all of the securities of an issuer according to the agreement reached between them or purchases all of the remaining securities by itself upon the expiration of the underwriting period. 

Article 27 An issuer that makes public offering of securities has the right to make its own choice according to law of the securities company for underwriting. 

Article 28 Where a securities company underwrites securities, it shall enter into a best efforts or firm commitment underwriting agreement with the issuer. The agreement shall specify the following matters: 

(1) The name, domicile as well as the name of the legal representative of the parties concerned; 

(2) The type, quantity, amount as well as issuing prices of the securities under best efforts or firm commitment underwriting; 

(3) The duration and starting and ending dates for best efforts or firm commitment underwriting; 

(4) The ways and date of payment for best efforts or firm commitment underwriting; 

(5) The expenses and settlement methods of best efforts or firm commitment underwriting; 

(6) The liabilities for breach of contract; and 

(7) Other matters specified by the securities regulatory authority under the State Council. 

Article 29 A securities company engaged in securities underwriting shall verify the truthfulness, accuracy and completeness of the public offering documents. Where false record, misleading representation or major omission is found, no sales activities shall be carried out. If any securities have been sold, the sales activities shall be terminated immediately and corrective measures shall be taken. 

A securities company engaged in securities underwriting shall not commit any of the following acts: 

(1) Engaging in advertising or other promotion activities which are false or misleading to investors; 

(2) Soliciting underwriting business through unfair competition;

(3) Other acts in violation of the rules governing securities underwriting business. 

Where a securities company has committed one of the aforementioned acts and has caused damage to other securities underwriting institutions or investors, it shall bear compensatory liability according to law. 

Article 30 Where an underwriting syndicate is hired to issue securities to non-specified objects, the underwriting syndicate shall be composed of a securities company as the lead underwriter with other securities companies participating in the underwriting. 

Article 31 The maximum period of underwriting on best efforts or firm commitment basis shall not exceed 90 days. 

During the period of underwriting on best efforts or firm commitment basis, a securities company shall ensure that the securities under the two types of underwriting are first sold to the subscribers. A securities company shall not reserve any securities under best efforts underwriting for itself nor shall it purchase in advance and retain the securities which it underwrites on firm commitment basis. 

Article 32 Where a stock is issued at a premium, its issuing price shall be determined through consultations between the issuer and the underwriting securities company. 

Article 33 As for a public offering of stocks under best efforts underwriting, the issuance shall be deemed as a failure if the number of shares sold to investors is below 70% of the proposed number of shares for public offering upon expiration of the period of best efforts underwriting. The issuer shall refund the subscribers of stocks according to the issuing price plus interest as calculated at the bank deposit rate for the corresponding period. 

Article 34 As for a public offering of stocks, the issuer shall, upon the expiration of the period of best efforts or firm commitment underwriting, file the information on the stock issuance for the record to the securities regulatory authority under the State Council within a specified time limit. 

Chapter III Trading of Securities 

Section 1 General Provisions 

Article 35 The securities purchased and sold by the parties to a securities transaction shall be the securities that have been issued and delivered according to law. 

Securities that are illegally issued shall not be purchased or sold. 

Article 36 Where there are restrictive provisions on the duration of transfer in the Company Law of the People's Republic of China and other laws, securities issued according to law shall not be transferred within the restricted period. 

Where any shareholder holding 5% or more of the shares of a listed company, the actual controller, directors, supervisors and members of senior management of the company, other shareholders holding shares issued prior to initial public offering, and the shareholders holding shares issued to specific investors transfer their shares of the company, they shall not violate the provisions on holding period, time of sale, quantity for sale, method of sale and information disclosure in laws, administrative regulations and the regulations of the securities regulatory authority under the State Council, and shall abide by the business rules of stock exchanges. 

Article 37 Securities publicly issued according to law shall be listed and traded on stock exchanges established according to law or traded on other national securities trading venues approved by the State Council. 

Securities issued in a non-public manner may be transferred on stock exchanges, or on other national securities trading venues approved by the State Council or regional equity markets established in accordance with the regulations of the State Council. 

Article 38 Securities listed on a stock exchange shall be traded in an open and centralized manner or any other manner as approved by the securities regulatory authority under the State Council. 

Article 39 The securities purchased or sold by the parties to a securities transaction may be in paper form or other forms specified by the securities regulatory authority under the State Council. 

Article 40 Practitioners of securities trading venues, securities companies and securities registration and clearing institutions, staff members of securities regulatory bodies as well as  other persons prohibited by the provisions of laws and administrative regulations from engaging in stock trading shall not, during their term of office or statutory periods, hold, purchase or sell stocks or other securities with the nature of equity directly or in any assumed name or in the name of other persons, nor shall they accept stocks or other securities with the nature of equity as gifts from other persons. 

When anyone becomes one of the personnel set forth in the preceding paragraph, he shall transfer the stocks or other securities with the nature of equity in his possession according to law. 

The practitioners of a securities company which adopts an equity incentive plan or an employee stock ownership plan may hold or sell the company's stocks or other securities with the nature of equity in accordance with the regulations of the securities regulatory authority under the State Council. 

Article 41 Securities trading venues, securities companies, securities registration and clearing institutions, and securities service providers as well as their practitioners shall treat information of investors as confidential according to law and shall not trade, provide or publicize such information illegally. 

Securities trading venues, securities companies, securities registration and clearing institutions and securities service providers as well as their practitioners shall not divulge commercial secrets known to them. 

Article 42 Securities service providers and their practitioners that issue such documents as auditing reports or legal opinions on securities issuance shall not purchase or sell the relevant securities during the underwriting period of the securities and within six months after the expiration of the underwriting period. 

In addition to the provisions of the preceding paragraph, securities service providers and their practitioners that issue auditing reports or legal opinions on the issuers and their controlling shareholders, actual controller or acquirers or major assets trading parties shall not purchase or sell the relevant securities from the date of accepting the entrustment to the fifth day after the aforesaid documents are publicized. If the date when securities service providers and their practitioners starts the aforesaid work is earlier than the date of accepting the entrustment, they shall not purchase or sell the relevant securities from the date when the aforesaid work starts to the fifth day after the aforesaid documents are publicized. 

Article 43 The fees charged for securities transaction shall be reasonable. The items to be charged, rates and administrative measures shall be publicized. 

Article 44 Where a shareholder holding 5% or more of the shares of a listed company or a company whose stocks are being traded on other national securities trading venues approved by the State Council, and the directors, supervisors and members of the senior management of the company sell their stocks or other securities with the nature of equity of the company within six months after purchase, or purchase their stocks within six months after sale, the income therefrom shall belong to the company and the board of directors of the company shall forfeit the income. However, exceptions may apply to the circumstance where a securities company holds 5% or more of the shares of the company as a result of purchasing the remaining stocks after firm commitment underwriting and other circumstances stipulated by the securities regulatory authorities under the State Council. 

The shares or other securities with the nature of equity held by directors, supervisors, members of senior management or natural person shareholders referred to in the preceding paragraph shall include the shares or other securities with the nature of equity held by their spouses, parents or children, and those held through the accounts of others. 

Where the board of directors of a company fails to implement the provisions of the first paragraph, the shareholders concerned have the right to require the board of directors to implement the provisions within 30 days. Where the board of directors fails to implement the provisions within the aforesaid period, the shareholders shall have the right to directly bring a lawsuit to the people's court in their own names for the interests of the company. 

Where the board of directors of a company fails to implement the provisions of the first paragraph, the directors responsible shall bear several and joint liabilities according to law. 

Article 45 Program trading with orders automatically generated by or placed through computer programs shall be in compliance with the regulations of the securities regulatory authority under the State Council and shall be reported to a stock exchange and shall not affect the system security of stock exchange or the normal trading order. 

Section 2 Listing of Securities 

Article 46 An application for listing of securities shall be made to a stock exchange. The stock exchange shall examine, verify and approve the application according to law, and the two parties shall enter into an agreement on listing of securities. 

Stock exchanges shall make arrangement for the listing of government bonds according to the decision of the department authorized by the State Council. 

Article 47 Applications for listing of securities shall comply with the listing requirements specified in the listing rules of a stock exchange. 

The listing requirements specified in the listing rules of a stock exchange shall specify the requirements on years of operation, financial standing, minimum public offering ratio, corporate governance and credit record of an issuer. 

Article 48 Where there are circumstances that necessitate the termination of a listed security as stipulated by a stock exchange, the stock exchange shall terminate its listing according to business rules. 

Where a stock exchange decides to terminate the listing and trading of securities, it shall announce the decision in a timely manner and file it for the record to the securities regulatory authority under the State Council. 

Article 49 Where a company refuses to accept the decision of a stock exchange on disapproving or terminating the listing and trading of securities, it may apply to the review organ established by the stock exchange for review. 

Section 3 Prohibited Acts of Transactions 

Article 50 Any insider, or any other person who has unlawfully obtained inside information is prohibited from taking advantage of the inside information to engage in securities transactions. 

Article 51 Insiders include: 

(1) Issuers and their directors, supervisors and members of senior management; 

(2) A shareholder holding 5% or more of the shares of a company as well as the directors, supervisors and members of senior management of the company, the actual controller of the company as well as the directors, supervisors and members of senior management of the company; 

(3) A company controlled or actually controlled by an issuer as well as the directors, supervisors and members of senior management of the company; 

(4) A person who, by virtue of his position in a company or of his business dealings with a company, is able to have access to the inside information of the company; 

(5) An acquirer of a listed company and the acquirer's controlling shareholders, actual controller, directors, supervisors and members of senior management, and the parties to a major assets transaction of a listed company and the party's controlling shareholders, actual controller, directors, supervisors and members of senior management; 

(6) Relevant persons of securities trading venues, securities companies, securities registration and clearing institutions, and securities service providers who may obtain inside information by virtue of their positions or work; 

(7) Staff members of securities regulatory body who may obtain inside information by virtue of their duties or work; 

(8) Staff members of the relevant authorities and regulatory authorities who may obtain inside information by virtue of their statutory duties in the administration of issuance and transaction of securities, or in the administration of acquisition and significant assets transactions of a listed company; and 

(9) Other persons who may have access to inside information as specified by the securities regulatory authority under the State Council. 

Article 52 Inside information refers to the nonpublic information that concerns the business operations or financial conditions of an issuer or that may have a major effect on the market price of the securities of the issuer in securities transactions. 

The material events set out in the second paragraph of Article 80 and the second paragraph of Article 81 of this Law are inside information. 

Article 53 The insiders, and other persons who have unlawfully obtained such inside information shall not purchase or sell the securities of the company concerned, or divulge such information, or advise other persons to purchase or sell such securities before the inside information is publicized. 

Where there are other provisions in this Law governing the acquisition of shares of a listed company by a natural person, a legal person or an unincorporated association who individually holds or holds together with other persons 5% or more of the company's shares by means of an agreement or any other arrangement, such other provisions shall prevail.

Where any insider transaction has caused losses to investors, the parties to such transaction shall bear compensatory liability according to law. 

Article 54 The practitioners of securities trading venues, securities companies, securities registration and clearing institutions, securities service providers and other financial institutions as well as the staff members of the relevant regulatory departments or industry associations shall be prohibited from using other undisclosed information besides inside information obtained by virtue of their positions to engage in securities transaction activities related to such information or explicitly or implicitly advising others to engage in the relevant transaction activities in violation of regulations. 

Where transactions conducted by taking advantage of undisclosed information have caused losses to investors, the parties to such transactions shall bear compensatory liability according to law. 

Article 55 No one shall manipulate the securities market by any of the following means to affect, or try to affect the price or quantity of securities transactions: 

(1) Carrying out combined or successive purchases or sales independently or in collusion with other persons by building up an advantage in terms of funds, shareholding or information; 

(2) Colluding with other persons to trade securities on the basis of preconcerted time, price and method; 

(3) Making securities transactions between accounts actually controlled by the same person; 

(4) Placing and withdrawing orders frequently and in large number but not for the purpose of transaction; 

(5) Inducing investors to conduct securities transactions using false or uncertain significant information; 

(6) Making public evaluations, forecasts or investment suggestions on securities and issuers while making reverse securities transactions; 

(7) Manipulating the securities market by taking advantage of the activities in other relevant markets; and 

(8) Using other means to manipulate the securities market. 

Where manipulation of the securities market has caused losses to investors, the parties concerned shall bear compensatory liability according to law. 

Article 56 No entity and individual shall disrupt the securities market by fabricating or disseminating false or misleading information. 

Stock trading sites, securities companies, securities registration and clearing institutions, securities service providers and their practitioners, as well as the securities association, securities regulatory bodies and their staff members shall be prohibited from making false representation or providing misleading information in securities transaction activities. 

The information on the securities market disseminated by various media shall be authentic and objective. Any misleading information shall be prohibited. Media and their staff members engaged in reporting on information on the securities market shall not engage in securities transactions in conflict with their duties. 

Where fabrication and dissemination of false or misleading information has disrupted the securities market and caused losses to investors, the parties concerned shall bear compensatory liability according to law. 

Article 57 Securities companies and their practitioners shall be prohibited from conducting any of the following acts which would harm the interests of their customers: 

(1) Purchasing and selling securities for their customers against the entrustment of the customers; 

(2) Failing to provide confirmation documents on transactions to their customers within the specified period of time; 

(3) Purchasing and selling securities for their customers without the entrustment of their customers, or impersonating the customers to purchase and sell securities; 

(4) Inducing their customers to conduct unnecessary purchase and sale of securities for the purpose of earning commission income; and 

(5) Other acts that go against the true intention expressed by their customers and would damage the interests of their customers. 

Where a violation of the provisions of the preceding paragraph has caused losses to their customers, the parties concerned shall bear compensatory liability according to law. 

Article 58 No entity or individual shall lend his securities account or borrow the securities accounts of others to carry out securities transactions in violation of regulations. 

Article 59 Channels for funds to enter the stock market shall be broadened according to law. Funds shall be prohibited from illegally flowing into the stock market. 

Investors shall be prohibited from purchasing or selling securities by illegally using fiscal funds or bank credit funds. 

Article 60 Where wholly state-owned enterprises, wholly state-owned companies, and companies controlled by state-owned capital purchase and sell listed stocks, they shall comply with the relevant regulations of the State. 

Article 61 Where securities trading venues, securities companies, securities registration and clearing institutions, securities service providers as well as their staff discover any prohibited securities transaction activities, they shall report such activities to the securities regulatory body in a timely manner. 

Chapter IV Acquisition of Listed Companies 

Article 62 An investor can acquire a listed company through a tender offer, a takeover agreement, or any other legitimate means. 

Article 63 Where an investor, through securities transactions at a stock exchange, comes to hold or hold jointly with others through an agreement or other arrangement 5% of the voting shares issued by a listed company, written reports shall be submitted, within three days as of the date on which such fact occurs, to the securities regulatory authority under the State Council and the stock exchange. The listed company shall be notified and an announcement shall be made. Within the aforesaid period, the investor shall not purchase or sell the stocks of the listed company, except in the circumstances specified by the securities regulatory authority under the State Council. 

Once an investor comes to hold or hold jointly with others through an agreement or other arrangement 5% of the voting shares issued by a listed company, a report shall be submitted and an announcement shall be made pursuant to the provisions of the preceding paragraph for each 5% increase or decrease in the proportion of the voting shares issued by the listed company thus held. Within three days as of the date on which such fact occurs and an announcement is made, the investor shall not purchase or sell the stocks of the listed company, except in the circumstances specified by the securities regulatory authority under the State Council. 

Once an investor comes to hold or hold jointly with others through an agreement or other arrangement 5% of the voting shares issued by a listed company, the listed company shall be notified and an announcement shall be made for each 1% increase or decrease in the proportion of the voting shares issued by the listed company thus held on the next day of the occurrence of such a fact. 

Investors who purchase the voting shares of a listed company in violation of the first or the second paragraph shall not be allowed to exercise the voting right towards the shares that exceed the prescribed proportion within 36 months after the purchase. 

Article 64 The announcement made according to the provisions of the preceding article shall include the following contents: 

(1) The name and domicile of the shareholder; 

(2) The name and amount of the shares held; 

(3) The date on which the shares held reaches the statutory percentage or any increase or decrease of the shares held reaches the statutory percentage and the source of funds used to increase the shares; and 

(4) The time and method of the changes in the voting shares of the listed company. 

Article 65 Where an investor, through securities transactions at a stock exchange, comes to hold or jointly hold with others through an agreement or other arrangement 30% of the voting shares issued by a listed company, the investor shall, if he intends to continue to purchase such shares, issue a tender offer to all the shareholders of the listed company for purchasing all or part of the shares of the company according to law. 

A tender offer for acquiring part of the outstanding shares of a listed company shall contain a provision specifying that tendered shares will be accepted on a pro rata basis if the offer is oversubscribed.