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New Securities Law takes effect
Updated: March 1, 2020 15:16 english.www.gov.cn

The General Office of the State Council issued a circular on Feb 29, specifying requirements concerning implementation of an amendment to the Securities Law of the People’s Republic of China, effective as of March 1.

The revision involves reforms in securities issuance, investor protection, information disclosure, irregularity punishment and intermediary management, among others.

A registration system for publicly issued securities will kick in at a steady pace. It will apply to publicly issued stocks step by step, and public issuance of corporate bonds will be subject to registration with the China Securities Regulatory Commission (CSRC) or the National Development and Reform Commission (NDRC).

To smooth the transition to the registration system, supporting procedures should catch up, the circular said, requiring the CSRC and NDRC to work out guidelines on which the designated agencies will rely to handle and review applications for issuing securities publicly prior to registration.

The revised law will strengthen crackdowns on behaviors that seriously disturb the market, such as fraudulent issuance, nonconforming information disclosure, dereliction of duty by intermediaries, and insider trading, through improved regulatory and law enforcement standards, as well as greater engagement between administrative and judicial departments.

According to the amendment, government departments should take vigorous measures to lawfully protect the legitimate rights and interests of investors, especially small and medium investors.

To ensure consistency with the new law, the CSRC, the Ministry of Justice and other departments should overhaul relevant administrative regulations, and propose timely suggestions for their modification.

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