Focus on investors and act together-learn and implement the new "Securities Law" to protect the legitimate rights and interests of investors
The new "Securities Law" full text and revision points
Source: China Securities Regulatory Commission
On December 28, 2019, the Fifteenth Meeting of the Standing Committee of the 13th National People’s Congress deliberated and passed the revised "Securities Law of the People’s Republic of China" (hereinafter referred to as the “New Securities Law”), effective March 1, 2020 Implement. This revision of the Securities Law, in accordance with the design requirements of the top-level system, further improved the basic system of the securities market, reflecting the direction of marketization, rule of law, and internationalization, and implemented the implementation of the comprehensive deepening of the securities market reform, effectively preventing and controlling market risks, and improving listed companies Quality, effectively safeguarding the legitimate rights and interests of investors, promoting the function of the securities market in serving the real economy, creating a standardized, transparent, open, vigorous and resilient capital market, providing strong legal protection, is of very important and far-reaching significance.
This revision of the Securities Law systematically summarizes the practical experience of my country's securities market reform and development, supervision and law enforcement, and risk prevention and control over the years. On the basis of in-depth analysis of the securities market's operation laws and development phase characteristics, a series of new systems have been formulated Reform and perfect:
The first is to fully implement the securities issuance registration system. On the basis of summarizing the experience of Shanghai Stock Exchange in setting up the science and technology innovation board and piloting the registration system, the new securities law implements the relevant requirements of the Third Plenary Session of the 18th Central Committee on the registration system reform and the requirements of the Fourth Plenary Session of the 19th Central Committee to improve the basic system of the capital market In accordance with the basic positioning of fully implementing the registration system, the securities issuance system has been systematically revised and improved, which fully reflects the determination and direction of the registration system reform. At the same time, considering that the reform of the registration system is a gradual process, the New Securities Law also authorizes the State Council to specify the specific scope and implementation steps of the registration system for securities issuance, leaving necessary laws for the step-by-step implementation of the registration system for relevant sectors and securities. space.
The second is to significantly increase the cost of securities violations. The new securities law has substantially increased the penalties for securities violations. For example, for fraudulent issuance, the original maximum fine of 5% of the raised funds will be increased to double that of the raised funds; for listed companies’ information disclosure violations, the original maximum fine of 600,000 yuan will be increased to one Ten million yuan; if the issuer’s controlling shareholder, actual controller organizes, instructs to engage in false statements, or conceals related matters that lead to false statements, a fine of up to ten million yuan may be imposed. At the same time, the new Securities Law has also improved the civil liability for securities violations. For example, it stipulates the issuer’s civil liability for non-fulfilment of public commitments, and clarifies the issuer’s controlling shareholder and actual controller’s presumption of fault in fraudulent issuance and illegal information disclosure, and joint and several liability for compensation.
The third is to improve the investor protection system. The new securities law sets up a special chapter to stipulate the investor protection system, and has made many bright arrangements. Including the distinction between ordinary investors and professional investors, and making targeted arrangements for investor rights protection; establishing a collection system for shareholder rights of listed companies; stipulating bondholder meetings and bond trustee systems; establishing ordinary investors and Compulsory mediation system for securities company disputes; improve the cash dividend system of listed companies. It is particularly noteworthy that in order to meet the needs of the reform of the registration system for securities issuance, the New Securities Law has explored a securities civil litigation system that adapts to my country's national conditions, and stipulates that investor protection agencies can act as litigation representatives and follow the "explicit withdrawal" and "implicit access" According to the principle of litigation, a civil damage compensation lawsuit shall be filed for the injured investor in accordance with the law.
The fourth is to further strengthen information disclosure requirements. The new securities law has set up a special chapter to stipulate an information disclosure system, and the information disclosure system has been systematically improved. Including expanding the scope of information disclosure obligors; improving the content of information disclosure; emphasizing that the information necessary for investors to make value judgments and investment decisions should be fully disclosed; regulating the voluntary disclosure of information disclosure obligors; clarifying that the acquirer of listed companies should disclose additional information Sources of funds for holding shares; establishing an information disclosure system for the issuer and its controlling shareholders, actual controllers, directors, supervisors, and senior managers to make public commitments.
The fifth is to improve the securities trading system. Optimize the regulations on listing conditions and delisting situations; improve the legal prohibitions on insider trading, market manipulation, and use of undisclosed information; strengthen the real-name system requirements for securities transactions. No entity or individual may violate the regulations by lending securities accounts or borrowing other people’s securities Accounts are engaged in securities transactions; improve the shareholder reduction system of listed companies; stipulate the suspension and resumption of securities trading system and the programmatic trading system; improve the means and measures of stock exchanges to prevent and control market risks and maintain transaction order.
Sixth, implement the "decentralization, management and service" requirement to cancel related administrative licenses. Including cancellation of the qualification approval for directors, supervisors, and senior management of securities companies; adjustment of the regulatory methods for securities service institutions such as accounting firms to engage in securities business, and changing qualification approval to filing; exempting the obligation to acquire tender offer under the agreement acquisition by the Securities Regulatory Commission The exemption was adjusted to exempt the issuance of an offer in accordance with the regulations of the China Securities Regulatory Commission.
The seventh is to consolidate the legal duties of market "gatekeepers" of intermediary agencies. It is stipulated that securities companies shall not allow others to directly participate in the centralized trading of securities in their names; clearly ensure that the sponsors, underwriting securities companies and their directly responsible personnel shall bear the presumption of fault and joint compensation liabilities to the injured investors when they fail to perform their duties; increase the securities The range of penalties for violations of the service organization’s failure to perform its duty of diligence and due diligence has been increased from a fine of five times the original business income to ten times. If the circumstances are serious, the securities service business shall be suspended or prohibited.
Eighth, establish and improve a multi-level capital market system. The securities trading venues are divided into three levels: stock exchanges, other national securities trading venues approved by the State Council, and regional equity markets established in accordance with the provisions of the State Council; it is stipulated that stock exchanges and other national securities trading venues approved by the State Council can be legally Set up different market levels; clarify that non-publicly issued securities can be transferred in the above-mentioned securities trading venues; authorize the State Council to formulate management measures for national securities trading venues and regional equity markets.
Nine is to strengthen supervision and law enforcement and risk prevention and control. Clarified the responsibilities of the China Securities Regulatory Commission to monitor, prevent, and dispose of securities market risks in accordance with the law; extend the period for the China Securities Regulatory Commission to freeze and seize illegal funds and securities in law enforcement; stipulate that the China Securities Regulatory Commission takes regulatory measures to prevent market risks and maintain market order System; The administrative reconciliation system and the integrity file system of the securities market have been added; the system of banning entry into the securities market has been improved, and it is stipulated that subjects who are banned by the market shall not engage in securities transactions within a certain period of time.
Ten is to expand the scope of application of the Securities Law. The depositary receipts are clearly defined as statutory securities; asset-backed securities and asset management products are written into the Securities Law, and the State Council is authorized to stipulate the management measures for the issuance and trading of asset-backed securities and asset management products in accordance with the principles of the Securities Law, while taking into account securities The actual needs of cross-border supervision in the field, clarify that securities issuance and trading activities outside my country, disrupt the order of the domestic market in my country, or damage the legitimate rights and interests of domestic investors, shall be investigated for legal responsibility in accordance with the Securities Law.
In addition, this amendment to the Securities Law has also improved the acquisition system of listed companies, the business management system of securities companies, the securities registration and settlement system, and the cross-border supervision and coordination system.