Tentative Measures for the Supervision and Administration of Refinancing Business
Tentative Measures for the Supervision and Administration of Refinancing Business
Tentative Measures for the Supervision and Administration of Refinancing Business
Order of the China Securities Regulatory Commission No. 75
October 26, 2011
The Tentative Measures for the Supervision and Administration of Refinancing Business, which were adopted at the 300th executive meeting of the China Securities Regulatory Commission on July 5, 2011, are hereby promulgated and shall come into effect as of the date of promulgation.
Shang Fulin Chairman of the China Securities Regulatory Commission
Tentative Measures for the Supervision and Administration of Refinancing Business
Chapter I General Provisions
Article 1 These Measures are formulated in accordance with the Securities Law and the Regulations on the Supervision and Management of Securities Companies for the purpose of improving the mechanism of margin trading and short selling transactions, extending the resource of funds and securities for margin trading and short selling business of securities companies, regulating the refinancing business and its related activities, and preventing the risk of refinancing business.
Article 2 For the purpose of these Measures, "refinancing business" means activities that securities finance companies lend their own or legally raised funds and securities to securities companies for them to operate margin trading and short selling businesses.
Article 3 Refinancing business and its related activities shall be conducted based on the principles of equality, voluntariness, fairness and good faith, not bringing damage to social public interests.
Article 4 Securities finance companies shall abide by laws, administrative regulations and these Measures, strictly prevent and control risks and steadily operate refinancing business.
Article 5 The China Securities Regulatory Commission (hereinafter referred to as CSRC) shall conduct supervision over and management of securities finance companies and their related business activities.
Chapter II Securities Finance Companies
Article 6 Securities finance companies shall be established under the decision of the State Council and CSRC shall perform the examination and approval procedures in accordance with the decision of the State Council.
Article 7 The form of organization of a securities finance company is a company limited by shares and the registered capital thereof shall be no less than RMB 6 billion.
The registered capital of a securities finance company shall be paid-up capital and the shareholders thereof shall invest in the form of currency.
Article 8 A securities finance company shall formulate articles of association, establish such institutional frameworks as shareholder general meeting, broad of directors and board of supervisors and regulate business operation in accordance with the Company Law and these Measures.
Article 9 Election and appointment of directors, supervisors and senior managers of a securities finance company shall be based on the approval of CSRC.
Article 10 A securities finance company shall perform the following duties without the purpose of making profits:
1. Providing refinancing service of funds and securities for margin trading and short selling business of securities companies;
2. Monitoring the operation of margin trading and short selling business of securities companies;
3. Monitoring and analyzing the margin trading and short selling transactions in the whole market and preventing risks through market-oriented means; and
4. Other duties determined by CSRC.
Article 11 Where a securities finance company changes its name, registered capital, shareholders, domicile and duties, formulates or amends its articles of association, or establishes or cancels branch institutions, it shall be subject to the approval of CSRC.
Chapter III Business Rules
Article 12 A securities finance company carrying out refinancing business shall in its own name separately open a special securities account of refinancing, a guarantee securities account of refinancing and a securities delivery account of refinancing in a securities registration and settlement institution.
A special securities account of refinancing shall be used for recording the securities owned by a securities finance company and supposed to be lent to securities companies and those returned by securities companies; a guarantee securities account of refinancing shall be used for recording the securities owned by a securities finance company upon the entrustment of securities companies and those for guaranteeing the creditor's rights of a securities finance company incurred in refinancing business over securities companies; and a securities settlement account of refinancing shall be used for dealing with securities settlement of a securities finance company related to refinancing business.
Article 13 A securities finance company carrying out refinancing business shall in its own name open a special funds account of refinancing in a commercial bank and a guarantee funds account of refinancing and a funds delivery account of refinancing in a securities registration and settlement institution separately.
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