Administrative Measures for Stock Exchanges
Administrative Measures for Stock Exchanges
Administrative Measures for Stock Exchanges
Order of the China Securities Regulatory Commission No. 192
October 30, 2021
The Administrative Measures for Stock Exchanges, adopted at the sixth executive meeting of 2021 of the China Securities Regulatory Commission on October 28, 2021, are hereby issued and shall take effect on the date of issuance.
Yi Huiman, Chairman of the China Securities Regulatory Commission
Appendix I: Administrative Measures for Stock Exchanges
Chapter I General Provisions
Article 1 In order to strengthen the administration of stock exchanges, promote stock exchanges' legal and full performance of their forefront regulatory functions and service functions, maintain normal order in the securities market, protect the legitimate rights and interests of investors, and accelerate the healthy and stable development of the securities market, the Administrative Measures for Stock Exchanges (the "Measures") were formulated in accordance with the Securities Law of the People's Republic of China (the “Securities Law”) and the Company Law of the People's Republic of China (the “Company Law”).
Article 2 For the purpose of the Measures, the term "stock exchanges" refers to the stock exchanges established upon the decisions of the State Council.
Article 3 Party organizations, which are established in stock exchanges in accordance with the Constitution of the Communist Party of China, shall play their functions as leaders, grasp the general direction, control the overall situation and guarantee the implementation of policies, discuss and decide on major issues of stock exchanges in accordance with the relevant provisions, and guarantee and supervise the full implementation of the guidelines and policies of the Party and the State in stock exchanges.
Article 4 Stock exchanges shall be subject to the supervision and administration of the China Securities Regulatory Commission (the "CSRC").
Article 5 The name of a stock exchange shall be marked with the letters "stock exchange". No other entity or individual shall use the name of "stock exchange" or an approximate name.
Chapter II Functions of a Stock Exchange
Article 6 A stock exchange shall organize and supervise securities trading, implement self-regulatory management, follow the principle of giving priority to social public interests, and maintain a fair, orderly and transparent market.
Article 7 The functions of a stock exchange include:
1. providing sites, facilities and services for securities trading;
2. formulating and amending its business rules;
3. reviewing applications for public offering of securities according to laws；
4. reviewing and arranging for the listing and trading of securities, and deciding on the termination of the listing of securities or the re-listing of securities;
5. providing transfer services for non-publicly issued securities;
6. organizing and supervising securities trading;
7. conducting supervision and administration of its members;
8. conducting supervision and administration of the companies proposing to have their securities traded as well as relevant obligors in information disclosure;
9. conducting supervision and administration of securities service agencies while they provide services for the listing and trading of securities;
10. managing and releasing market information;
11. carrying out education and protection for investors; and
12. any other function specified in laws and administrative regulations, or approved, conferred or entrusted by the CSRC.
Article 8 No stock exchange shall directly or indirectly be engaged in:
1. the press and publication industry;
2. publication of writings and materials on predictions on securities prices;
3. provision of guarantees for others; or
4. other business not approved by the CSRC.
Article 9 A stock exchange may, according to the need to develop the securities market, innovate trading varieties and trading methods, and set different market levels.
Article 10 Where a stock exchange formulates or amends its business rules, it shall meet the requirements of laws, administrative regulations and departmental rules for its duty of self-regulatory management.
A stock exchange's formulation of or amendment to the following contents of its business rules shall be adopted by its council or board of director and approved by the CSRC:
1. business rules on the trading and listing of securities, member management, etc.;
2. offering new security varieties to the market or making drastic adjustments to the security varieties currently available in the market;
3. provision of trading services in varieties for securities trading not listed in the exchange in networking and other forms by the stock exchange;
4. significant innovation of securities trading methods or making drastic adjustments to the security trading methods currently available in the market;
5. major issues concerning agencies in Hong Kong, Macao and Taiwan and overseas institutions; and
6. other business rules needing to be approved by the CSRC.
For non-member directors’ objections or abstentions, the stock exchange shall make an explanation in the request or report submitted to the CSRC.
Article 11 The business rules formulated by a stock exchange are binding on all the participants of the business activities of securities trading. In respect of their behaviors in breach of business rules, a stock exchange will impose disciplinary punishments or adopt other self-discipline management measures.
Article 12 A stock exchange shall, in accordance with the provisions of its articles of association, relevant agreements and business rules, take self-regulatory measures against or impose disciplinary sanctions on the relevant parties committing illegal acts, and perform the duty of self-regulatory management.
Article 13 A stock exchange shall specify the specific types of, applicable circumstances and applicable procedures for its self-regulatory measures or disciplinary sanctions in its business rules.
A stock exchange's disciplinary sanctions shall be imposed on relevant parties upon the examination and approval opinions of its disciplinary sanction committee. Where a party concerned applies for an evidence hearing in accordance with the relevant provisions of the business rules of the stock exchange before the disciplinary sanction decision is made, the stock exchange shall organize the evidence hearing.
Article 14 Any market participant who refuses to accept the relevant self-regulatory measures taken or disciplinary sanctions given by a stock exchange may apply for a review in accordance with the provisions of the business rules of this stock exchange.
A stock exchange shall set up a review committee and make a review decision on the basis of its examination and approval opinions.
Article 15 A stock exchange shall establish a risk management and monitoring mechanism, monitor, control, give an early warning of and prevent risks in the market in accordance with the law, and maintain the safe and stable operation of the securities market.
A stock exchange shall maintain sufficient risk reserve resources in the form of risk funds, general risk reserves, etc., to advance or make up for losses caused by technical failures, operational errors, force majeure and other risk events.
Article 16 A stock exchange shall establish a long-term cooperative mechanism characterized by resource sharing and mutual coordination with other stock exchanges, securities registration and clearing institutions, trade associations and other securities and futures industry organizations to supervise and inspect illegal acts in the securities market in accordance with the law.
Chapter III Organizations of a Stock Exchange
Article 17 A stock exchange adopting a membership system shall set up members' meetings, the council, the general manager and the board of supervisors.
A stock exchange adopting a limited liability company system shall set up the shareholder meeting, the board of directors, general manager, and the board of supervisors. Where a stock exchange is a one-person limited liability company, there is no need to set up a shareholder meeting, and the shareholders exercise the functions and powers of the shareholder meeting.
Article 18 The members' meeting, as the highest authority of a stock exchange adopting a membership system, shall exercise the following functions and powers:
1. formulating and amending the articles of association of the stock exchange;
2. electing and dismissing member directors and member supervisors;
3. deliberating on and adopting the work reports of the council, the board of supervisors and the general manager;
4. deliberating on and adopting the financial budget and final reports of the stock exchange; and
5. other major issues stipulated by laws, administrative regulations, departmental rules and the articles of association of the stock exchange.
The shareholding meeting, as the highest authority of a stock exchange adopting a corporation system, shall exercise the following functions and powers:
1. amending the articles of association of the stock exchange;
2. electing and replacing directors and supervisors who are not held by employee representatives;
3. deliberating on and adopting the work reports of the board of directors and the board of supervisors;
4. deliberating on and adopting the financial budget and final accounts report of the stock exchange; and
5. other major issues stipulated by laws, administrative regulations, departmental rules and the articles of association of the stock exchange.
Article 19 The articles of association of a stock exchange adopting a membership system shall include the following items:
1. purpose of establishment;
2. name of the stock exchange;
3. the location of major offices and trading sites as well as the relevant facilities;
4. scope of the functions and powers of the stock exchange;
5. qualifications for membership as well as the procedures for application for and withdrawal of membership;
6. rights and obligations of a member;
7. disciplinary sanctions against members;
8. internal organizations and their respective functions and powers;
9. nomination and appointment/dismissal of directors, supervisors and senior officers of the stock exchange and their respective duties;
10. capital and financial affairs;
11. the conditions and procedures for dissolution of the stock exchange; and
12. other matters needing to be stipulated in the articles of association.
The articles of association of a stock exchange adopting a corporation system shall include the following items:
1. the items specified in Items 1 to 4, Items 8, 10 and 11 of the preceding paragraph;
2. nomination and appointment/dismissal of directors, supervisors and senior officers and their duties; and
3. other matters needing to be stipulated in the articles of association.
The formulation and revision of the articles of association of a stock exchange adopting a membership system shall be submitted to the CSRC for approval after being adopted by the members' meeting. The articles of association of a stock exchange adopting a corporation system shall be jointly formulated by the shareholders and submitted to the CSRC for approval; amendments to the articles of association shall, upon adopted by the shareholder meeting, be submitted to the CSRC for approval.
Article 20 The members' meeting shall be convened once a year by the council and presided over by the director-general. Where the director-general is unable to exercise his/her duties due to certain reasons, the deputy director-general or any other director appointed by the director-general shall preside over the meeting.
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Order of the China Securities Regulatory Commission No. 192
October 30, 2021
The Administrative Measures for Stock Exchanges, adopted at the sixth executive meeting of 2021 of the China Securities Regulatory Commission on October 28, 2021, are hereby issued and shall take effect on the date of issuance.
Yi Huiman, Chairman of the China Securities Regulatory Commission
Appendix I: Administrative Measures for Stock Exchanges
Chapter I General Provisions
Article 1 In order to strengthen the administration of stock exchanges, promote stock exchanges' legal and full performance of their forefront regulatory functions and service functions, maintain normal order in the securities market, protect the legitimate rights and interests of investors, and accelerate the healthy and stable development of the securities market, the Administrative Measures for Stock Exchanges (the "Measures") were formulated in accordance with the Securities Law of the People's Republic of China (the “Securities Law”) and the Company Law of the People's Republic of China (the “Company Law”).
Article 2 For the purpose of the Measures, the term "stock exchanges" refers to the stock exchanges established upon the decisions of the State Council.
Article 3 Party organizations, which are established in stock exchanges in accordance with the Constitution of the Communist Party of China, shall play their functions as leaders, grasp the general direction, control the overall situation and guarantee the implementation of policies, discuss and decide on major issues of stock exchanges in accordance with the relevant provisions, and guarantee and supervise the full implementation of the guidelines and policies of the Party and the State in stock exchanges.
Article 4 Stock exchanges shall be subject to the supervision and administration of the China Securities Regulatory Commission (the "CSRC").
Article 5 The name of a stock exchange shall be marked with the letters "stock exchange". No other entity or individual shall use the name of "stock exchange" or an approximate name.
Chapter II Functions of a Stock Exchange
Article 6 A stock exchange shall organize and supervise securities trading, implement self-regulatory management, follow the principle of giving priority to social public interests, and maintain a fair, orderly and transparent market.
Article 7 The functions of a stock exchange include:
1. providing sites, facilities and services for securities trading;
2. formulating and amending its business rules;
3. reviewing applications for public offering of securities according to laws；
4. reviewing and arranging for the listing and trading of securities, and deciding on the termination of the listing of securities or the re-listing of securities;
5. providing transfer services for non-publicly issued securities;
6. organizing and supervising securities trading;
7. conducting supervision and administration of its members;
8. conducting supervision and administration of the companies proposing to have their securities traded as well as relevant obligors in information disclosure;
9. conducting supervision and administration of securities service agencies while they provide services for the listing and trading of securities;
10. managing and releasing market information;
11. carrying out education and protection for investors; and
12. any other function specified in laws and administrative regulations, or approved, conferred or entrusted by the CSRC.
Article 8 No stock exchange shall directly or indirectly be engaged in:
1. the press and publication industry;
2. publication of writings and materials on predictions on securities prices;
3. provision of guarantees for others; or
4. other business not approved by the CSRC.
Article 9 A stock exchange may, according to the need to develop the securities market, innovate trading varieties and trading methods, and set different market levels.
Article 10 Where a stock exchange formulates or amends its business rules, it shall meet the requirements of laws, administrative regulations and departmental rules for its duty of self-regulatory management.
A stock exchange's formulation of or amendment to the following contents of its business rules shall be adopted by its council or board of director and approved by the CSRC:
1. business rules on the trading and listing of securities, member management, etc.;
2. offering new security varieties to the market or making drastic adjustments to the security varieties currently available in the market;
3. provision of trading services in varieties for securities trading not listed in the exchange in networking and other forms by the stock exchange;
4. significant innovation of securities trading methods or making drastic adjustments to the security trading methods currently available in the market;
5. major issues concerning agencies in Hong Kong, Macao and Taiwan and overseas institutions; and
6. other business rules needing to be approved by the CSRC.
For non-member directors’ objections or abstentions, the stock exchange shall make an explanation in the request or report submitted to the CSRC.
Article 11 The business rules formulated by a stock exchange are binding on all the participants of the business activities of securities trading. In respect of their behaviors in breach of business rules, a stock exchange will impose disciplinary punishments or adopt other self-discipline management measures.
Article 12 A stock exchange shall, in accordance with the provisions of its articles of association, relevant agreements and business rules, take self-regulatory measures against or impose disciplinary sanctions on the relevant parties committing illegal acts, and perform the duty of self-regulatory management.
Article 13 A stock exchange shall specify the specific types of, applicable circumstances and applicable procedures for its self-regulatory measures or disciplinary sanctions in its business rules.
A stock exchange's disciplinary sanctions shall be imposed on relevant parties upon the examination and approval opinions of its disciplinary sanction committee. Where a party concerned applies for an evidence hearing in accordance with the relevant provisions of the business rules of the stock exchange before the disciplinary sanction decision is made, the stock exchange shall organize the evidence hearing.
Article 14 Any market participant who refuses to accept the relevant self-regulatory measures taken or disciplinary sanctions given by a stock exchange may apply for a review in accordance with the provisions of the business rules of this stock exchange.
A stock exchange shall set up a review committee and make a review decision on the basis of its examination and approval opinions.
Article 15 A stock exchange shall establish a risk management and monitoring mechanism, monitor, control, give an early warning of and prevent risks in the market in accordance with the law, and maintain the safe and stable operation of the securities market.
A stock exchange shall maintain sufficient risk reserve resources in the form of risk funds, general risk reserves, etc., to advance or make up for losses caused by technical failures, operational errors, force majeure and other risk events.
Article 16 A stock exchange shall establish a long-term cooperative mechanism characterized by resource sharing and mutual coordination with other stock exchanges, securities registration and clearing institutions, trade associations and other securities and futures industry organizations to supervise and inspect illegal acts in the securities market in accordance with the law.
Chapter III Organizations of a Stock Exchange
Article 17 A stock exchange adopting a membership system shall set up members' meetings, the council, the general manager and the board of supervisors.
A stock exchange adopting a limited liability company system shall set up the shareholder meeting, the board of directors, general manager, and the board of supervisors. Where a stock exchange is a one-person limited liability company, there is no need to set up a shareholder meeting, and the shareholders exercise the functions and powers of the shareholder meeting.
Article 18 The members' meeting, as the highest authority of a stock exchange adopting a membership system, shall exercise the following functions and powers:
1. formulating and amending the articles of association of the stock exchange;
2. electing and dismissing member directors and member supervisors;
3. deliberating on and adopting the work reports of the council, the board of supervisors and the general manager;
4. deliberating on and adopting the financial budget and final reports of the stock exchange; and
5. other major issues stipulated by laws, administrative regulations, departmental rules and the articles of association of the stock exchange.
The shareholding meeting, as the highest authority of a stock exchange adopting a corporation system, shall exercise the following functions and powers:
1. amending the articles of association of the stock exchange;
2. electing and replacing directors and supervisors who are not held by employee representatives;
3. deliberating on and adopting the work reports of the board of directors and the board of supervisors;
4. deliberating on and adopting the financial budget and final accounts report of the stock exchange; and
5. other major issues stipulated by laws, administrative regulations, departmental rules and the articles of association of the stock exchange.
Article 19 The articles of association of a stock exchange adopting a membership system shall include the following items:
1. purpose of establishment;
2. name of the stock exchange;
3. the location of major offices and trading sites as well as the relevant facilities;
4. scope of the functions and powers of the stock exchange;
5. qualifications for membership as well as the procedures for application for and withdrawal of membership;
6. rights and obligations of a member;
7. disciplinary sanctions against members;
8. internal organizations and their respective functions and powers;
9. nomination and appointment/dismissal of directors, supervisors and senior officers of the stock exchange and their respective duties;
10. capital and financial affairs;
11. the conditions and procedures for dissolution of the stock exchange; and
12. other matters needing to be stipulated in the articles of association.
The articles of association of a stock exchange adopting a corporation system shall include the following items:
1. the items specified in Items 1 to 4, Items 8, 10 and 11 of the preceding paragraph;
2. nomination and appointment/dismissal of directors, supervisors and senior officers and their duties; and
3. other matters needing to be stipulated in the articles of association.
The formulation and revision of the articles of association of a stock exchange adopting a membership system shall be submitted to the CSRC for approval after being adopted by the members' meeting. The articles of association of a stock exchange adopting a corporation system shall be jointly formulated by the shareholders and submitted to the CSRC for approval; amendments to the articles of association shall, upon adopted by the shareholder meeting, be submitted to the CSRC for approval.
Article 20 The members' meeting shall be convened once a year by the council and presided over by the director-general. Where the director-general is unable to exercise his/her duties due to certain reasons, the deputy director-general or any other director appointed by the director-general shall preside over the meeting.
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