(Approved by the State Council on November 30 , 1997 , and promulgated by the Securities Commission of the State Council on December 25 , 1997)
Chapter I General Provisions
Article 1 These Measures are formulated for the purpose of strengthening administration of securities or futures investment consultancy activities and safeguarding the lawful rights and interests of investors and public interests of society.
Article 2 Anyone who engages in the securities or futures investment consultancy business within the territory of the People's Republic of China must observe these Measures.
The securities or futures investment consultancy referred to in these Measures means the directly or indirectly paid consultancy services provided by agencies and their investment consultants engaged in the securities or futures consultancy business for securities or futures investors or clients through securities or futures investment analyses, forecasts or recommendations, etc. in the following forms:
(1) to accept entrustment from an investor or client to provide securities or futures investment consultancy services;
(2) to hold consultancy seminars, lectures and analysis meetings on securities or futures investment;
(3) to publish articles, commentaries and reports on securities or futures investment consultancy in newspapers and periodicals, and to provide securities or futures investment consultancy services through such mass media as radio or television;
(4) to provide securities or futures investment consultancy services through such telecommunications facilities as telephone, fax, computer network; and
(5) other forms recognized by the China Securities Regulatory Commission (hereinafter referred to as the CSRC ) .
Article 3 A business permit must be obtained from the CSRC in accordance with the provisions of these Measures to engage in a securities or fixtures consultancy business. No institution or individual shall engage in a securities or fixtures investment consultancy business in the various forms listed in Article 2 of these Measures without the pemxit of the CSRC.
Securities dealer institutions, fixtures broker institutions and their staff shall observe the provisions of these Measures when engaging in the securities or fixtures investment consultancy business beyond the respective scope of those institutions.
Article 4 Provisions of relevant laws, regulations, rules and of the CSRC must be observed and the principles of objectivity, fairness, honesty and good faith must be adhered to when engaging in a securities or fixtures investment consultancy business.
Article 5 The CSRC and its authorized local securities or fixtures regulatory departments (hereinafter referred to as local securities regulatory offices (securities
regulatory commissions)) shall be responsible for the supervision and administration of securities or fixtures investment consultancy businesses and also responsible for the implementation of these Measures.
Chapter II Securities or Futures Investment Consulting Agencies
Article 6 An agency applying for professional qualifications for a securities or futures investment consultancy shall meet the following conditions:
(1) for an agency engaging in securities or fixtures investment consultancy business respectively, there shall be five or more full?time persons with professional qualifications for a securities or fixtures investment consultancy; for an agency engaging in securities and futures investment consultancy businesses simultaneously, there shall be ten or more full?time persons with professional qualifications for a securities or fixtures investment consultancy; among its senior managerial personnel, there must be at least one person with professional qualifications for a securities or futures investment consultancy;
(2) have a registered capital of not less than RMB one million yuan;
(3) have fixed business premises and telecommunications and other information transmission facilities adaptable to the business;
(4) have articles of association;
(5) have sound internal management systems; and
(6) meet other conditions as required by the CSRC.
Article 7 Only securities dealer institutions and fixtures broker institutions which conform to the conditions provided for in Article 6 of these Measures may apply to engage in securities or fixtures investment consultancy beyond the respective scope of those institutions.
Other agencies engaged in consultancy business which conform to the conditions provided for in Article 6 of these Measures may apply for concurrent operation of a securities or fixtures investment consultancy business.
Article 8 An agency applying for professional qualifications for a securities or
futures investment consultancy shall be examined and approved in accordance with
the following procedures:
(1) An applicant shall submit an application to the local securities regulatory office( securities regulatory commission) of the locality authorized by the CSRC (where the local securities regulatory office ( securities regulatory commission) is not authorized by the CSRC, an applicant shall apply directly to the CSRC, similarly hereinafter), and after agreement through examination and verification the local securities regulatory office( securities regulatory commission) shall put forward a preliminary opinion;
(2) The local securities regulatory office( securities regulatory commission) shall submit the application documents agreed upon through examination and verification to the CSRC, and the CSRC shall issue a business permit to the applicant upon examination and approval and send a copy of the approval document to the local securities regulatory office( securities regulatory commission) ; and
(3) The CSRC shall, in the form of public announcements, release tosociety information on the applicant who has obtained a business pemrit.
Article 9 An agency applying for professional qualifications for a securities or futures investment consultancy shall submit the following documents:
(1) an application form uniformly printed by the CSRC;
(2) the articles of association;
(3) the business license of the enterprise legal person;
(4) a list of senior managerial personnel and professional staff engaged in securities or futures investment consultancy in the agency and their educational background, work experience and certificates of professional qualification;
(5) the mode of developing the investment consultancy business and rules and regulations for internal management;
(6) documents evidencing the use of business premises, address for correspondence, telephone numbers and fax numbers of the agency;
(7) a capital verification report provided by a certified public accountant; and
(8) other documents required to be submitted by the CSRC.
Article 10 Where changes occur in the business mode, business prcmiscs, chief person in charge and staff with professional qualification for securities or futures investment consultancy of securities or futures consulting agencies, a report on the changes shall be submitted to the local securities regulatory office ( securities regulatory commission), within five working days of the date of occurrence of the changes, for undergoing the formalities for these changes.
Article 11 Securities or fixtures investment consulting agencies shall apply to local securities regulatory offices ( securities regulatory commissions ) for annual inspection between January 1 and April 30 every year. The following documents shall be submitted when undergoing the annual inspection:
(1) an application report for annual inspection;
(2) annual business report; and
(3) financial accounting statements audited by a certified public accountant.
Local securities regulatory offices ( securities regulatory commissions ) shall, within 20 working days of the date of receipt of the documents listed in the preceding paragraph, put forward examination and verification opinions on the applications for annual inspection; those agreed upon through examination and verification shall be submitted to the CSRC for examination and approval.
A securities or fixtures investment consulting agency that fails to submit the annual inspection report within the specified time or fails to pass the annual inspection upon examination and verification shall not continue to engage in a securities or fixtures investment consultancy business.
Chapter III Securities or Futures Investment Consultants
Article 12 A person to engage in securities or fixtures investment consultancy business must obtain professional qualification as a securities or fixtures investment consultant and only after joining an agency with professional qualification as a securities or futures investment consultant may engage in the securities or futures investment consultancy business.
Any person who has not obtained professional qualification as a securities or futures investment consultant, or who has obtained the professional qualification as a securities or fixtures investment consultant, but does not work in a securities or futures investment consulting agency, shall not engage in the securities or futures investment consultancy business.
Article 13 A securities or fixtures investment consultant applying to obtain the professional qualification as a securities or futures investment consultant must meet the following requirements:
(1) have the nationality of the People's Republic of China;
(2) have full capacity for civil act;
(3) have moral integrity, honesty and good professional ethics;
(4) have not been subject to criminal penalties or severe administrative penalties related to the securities or futures business;
(5) have an educational background of regular college course or above;
(6) for securities investment consultants, have more than two years of experience in the securities business, and for fixtures investment consultants, have more than two years of experience in the fixtures business;
(7) have passed the qualification examination for securities or futures employees uniformly organized by the CSRC; and
(8) meet other requirements prescribed by the CSRC.
Article 14 A securities or futures investment consultant applying to obtain professional qualification as a securities or futures investment consultant shall be examined and approved in accordance with the following procedures:
(1) An applicant shall submit an application to the local securities regulatory office( securities regulatory commission) of the locality authorized by the CSRC (where the local securities regulatory office( securities regulatory commission) is not authorized by the CSRC, an applicant shall apply directly to the CSRC, similarly hereinafter ) , and the local securities regulatory office ( securities regulatory commission) shall put forward preliminary opinions upon agreement through examination and verification; and
(2) The local securities regulatory office (securities regulatory comrmission) shall submit the application document agreed upon through examination and verification to the CSRC, and the CSRC shall issue a business permit to the applicant upon examination and approval and send a copy of the approval document to the local securities regulatory office( securities regulatory commission).
Article 15 Asecurities or futures investment consultant applying to obtain professional qualification as a securities or fixtures investment consultant shall submit the following docu-ments:
(1) an application form uniformly printed by the CSRC;
(2) the identification card;
(3) certificates of educational qualification;
(4) performance record on the qualification examination for securities or futures emplo?yees;
(5) materials explaining past behavior issued by the employer unit or the subdistrict office of the place of the registered residence; and
(6) other materials required to be submitted by the CSRC.
Article 16 When a securities or futures investment consultant who has obtained professional qualification applies to practise the business, the securities or futures investment consulting agency he joins shall submit an application to the local securities regulatory office (securities regulatory commission) of the locality where the agency is located, and the application shall be submitted to the CSRC for examination and approval upon consent of the local securities regulatory office (securities regulatory commission) through examination and verification; if the practice of the business is approved, a license for practicing the business shall be issued by the CSRC.
Article 17 A person having obtained the professional qualification as a securities or futures investment consultant shall go through annual inspection of his business operations simultaneously with the annual inspection of the securities or futures investment consulting agency he joins. However, if he has not practised in a securities or fixtures investment consulting agency, his professional qualification shall automatically become invalid at the expiration of 18 months as of the date of the acquisition.
Article 18 No securities or fixtures investment consultant shall concurrently practise in two or more than two securities or fixtures investment consulting agencies.
Chapter IV Administration of Securities or Futures Investment Consulting Business
Article 19 A securities or fixtures investment consulting agency and its investment consultants shall provide securities or fixtures investment consultancy services for investors or clients with the trade acknowledged attitude of prudence, honesty, due diligence and responsibility.
Article 20 A securities or fixtures investment consulting agency and its investment consultants shall use the relevant information and materials completely, objectively and accurately to provide investment analyses, forecasts and recommendations to investors or clients, and shall not quote out of context or alter the relevant information and materials; sources and copyright owners shall indicated in quoting the relevant information and materials.
Artice 21 A securities or fixtures investment consulting agency and its investment consultants shall not provide investors or their clients with inwcstment analyses, forecasts or recommendations based on false information, market rumors or inside information.
Article 22 When publishing articles, reports or opinions of investment consultancy in newspapers and periodicals, radios and televisions or other media, a securities or futures investment consultant must indicate the name of the securities or futures investment consulting agency in which he is employed and the true name of the individual and make adequate explanations of investment risks. The securities or Wit futures investment consultancy faxes provided to investors or clients by securities or futures investment consulting agencies must indicate the names and addresses, the telephone numbers for contact of the agencies and the names of the contact persons.
Article 23 When cosponsoring or assisting in sponsoring a printed sheet or a program on securities or futures investment consultancy with newspapers and periodicals, radios and televisions or cooperating with departments of telecommunications services, a securities or futures investment consulting agency shall apply to the local securities regulatory office( securities regulatory commission) for recording the materials which include substance of cooperation, time of beginning and temaination, layout of the printed sheet or time band of the program, the person?in?charge of the project, etc. and the seals of the units of the two parties shall be affixed.
Article 24 No securities or futures investment consulting agency or its investment consultants shall engage in the following activities:
(1) buying and selling securities or futures as an agent for investors;
(2) making commitments to investors on returns on securities or futures investment;
(3) making agreements with investors on the sharing of returns or losses on the investment;
(4) buying and selling for himself stocks, securities with the nature and function of stocks, and futures;
(5) manipulating the market or engaging in inside trading in collaboration with others by exploiting the consultancy services; and
(6) other securities or futures fraudulence prohibited by laws, regulations and rules.
Article 25 The investment analyses, forecasts or recommendations on the same question provided to different clients by a securities or futures investment consulting agency shall be consis?tent.
When a securities dealer institution with its own business engages in securities investment consultancy beyond the scope of the institution, the consuitaixv opinions provided on the same question to the public and its own department shall he cnrnicrent. and shall not mislead the public out of its own need for profit?gaining in its own business.
Article 26 Securities or fixtures information briefs, newsflashes, dynamic information compiled and issued by a securities dealer institution or futures broker institution, and the infom anon systems, etc. , used internally in the institution, hall he restricted to use only within the institution and shall not he provided to the public through any Channel.
The underwriter or the listing recommenders and the subordinate securities estment consulting agencies of the company whose public issuance of shares has w approved by the CSRC must not publish in the mass media its report analyzing investment value written for their clients.
Article 27 The CSRC and local securities regulatory offices ( securities commissions) have the power to conduct inspection of the business activities of securities or futures investment consulting agencies and investment consultants, and the securities or.fiitures investment consulting agencies and their consultants subject to inspection shall cooperate and not interfere or obstruct.
The CSRC and local securities regulatory offices ( securities regulatory commissions) and their functionaries in the process of business insnectian. shall pay attention to protect the husineac secrets involved.
Article 28 Securities or futures investment consulting agencies shall keep the investment consultancy materials they provide to investors or the public for two years as of the dare of provision.
Article 29 Local securities regulatory offices (securities regulatory commissions) have the power, based on the complaints or reports of investors or the public of society, to demand the securities or futures investment consulting agencies and their investment consultants to explain' the state of affairs and provide relevant materials.
Article 30 Any unit or individual finding that a securities or futures cent consulting agency, investment consultant or other institutions and indmidnalc has rnmmitted any acts in violation of the provisions of these Measures may lodge a complaint or make a report to local securities regulatory offices (securities regulatory commissions).
Article 31 Local securities regulatory offices ( securities regulatory commissions) shall establish a case and investigate acts in violation of the provisions of these Measures and submit a report on the results of investigation to the CSRC for the record.
Chapter V Penalty Provisions
Article 32 Whoever, without a permit from the CSRC and without authorization, engages in the securities or futures investment consultancy business provided for in Article 2 of these Measures, shall be ordered to stop business, and concurrently have the illegal gains confiscated and a fine of the amount not more than the equivalent value of the illegal gains imposed by the local securities regulatory office( securities regulatory commission) .
Article 33 Any securities or fixtures investment consulting agency that commits one of the following acts shall have a fine of not less than 10 , 000 yuan and not more than 50, 000 yuan imposed by the local securities regulatory office (securities regulatory commission); where the circumstances are serious, the local securities regulatory office (securities regulatory commission) shall report to the CSRC, and a penalty of suspension or revocation of its business qualification shall be imposed by the CSRC:
(1) false statements or major omissions in the documents and materials submitted to the securities regulatory departments;
(2) failure to firlfill the obligations of reporting and annual inspection in accordance with the provisions of these Measures;
(3) failure to undergo the formalities for changes occurring in the relevant condition of the agency in accordance with the provisions of these Measures;
(4) securities or futures investment consultants of this agency, in violation of the provisions of these Measures, have been subject to administrative penalties by the securities regulatory departments;
(5) interfering with or obstructing the inspection or investigation by the local securities regulatory office (securities regulatory commission) , or concealing or destroying evidence.
Article 34 Any securities or futures investment consulting agency, in violation of the provisions of Articles 18 , 19 , 20 , 21, 22 , 23 , 24 , 25 and 28 of these Measures, shall, on one count or concurrently, be given a have the illegal gains confiscated and have a fine of not less than 10 , 000 yuan nor more than 100,000 yuan imposed; where the circumstances are serious, the local securities regulatory office (securities regulatory commission) shall report to the CSRC and a penalty of suspension or revocation of the business qualification shall be imposed by the CSRC; where a crime is constituted, criminal liability shall be investigated
according to law.
Article 35 Any securities dealer institution or futures broker e)stitution, in violation of the provisions of Article 26 of these Measures, shall be ordered by the local securities regulatory office ( securities regulatory commission ) to make amends and concurrently given a warning or imposed a fine of not less than I U, 000 Yuan nor more than 50,000 yuan.
Article 36 Any securities or futures investment consultant that moiates the provisions of Articles 18 , 19 , 20 , 21, 22 and 24 of these Measures, or fails to fulfill the obligations of reporting to and annual inspection by the competent securities department in accordance with the provisions of these Measures, shall, on one count or concurrently, be given a warning, have the illegal gains confiscated) and a fine of not less than 10 , 000 yuan nor more than 30 , 000 yuan imposed; where the circumstances are serious, the local securities regulatory office( securities regulatory commission) shall report to the CSRC and a penalty of suspension or revocation of its business qualification shall be imposed by the CSRC; where a crime is constituted, criminal liability shall be investigated according to law.
Article 37 Where any fimctionary of the CSRC or local securities regulatory offices( securities regulatory commissions) neglects his duties, abuses his powers, commits illegalities for personal interests or by fraudulent means constituting a crime, criminal liability shall be investigated according to law; where a crime is not yet constituted, administrative sanctions shall be imposed according to law.
Chapter VI Supplementary Provisions
Article 38 These Measures shall take effect as of April 1, 1998 .
