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Securities Law of China (2019)


Type of laws Law

Issuing body Standing Committee of the National People's Congress

Promulgating date Dec 28, 2019

Effective date Mar 01, 2020

Validity status Valid

Scope of application Nationwide

Topic(s) Banking and Finance Securities Law

Editor(s) C. J. Observer

The Securities Law was promulgated in 1998, and amended in 2004, 2005, 2013, 2014 and 2019 respectively. The latest revision entered into force on March 1, 2020.

There are 226 articles in total.

The key points are as follows:

1.This Law shall apply to the offering and trading of stocks, corporate bonds, depositary receipts and other securities lawfully recognized by the State Council within the territory of China.(Article 2)

2.Offering and trading of securities outside the People’s Republic of China which disrupt the domestic market order of the People’s Republic of China and harm the legitimate rights and interests of domestic investors shall be dealt with pursuant to the relevant provisions of this Law, and legal liability shall be pursued. (Article 2)

3.The operation and administration of the securities industry shall be separated from the operation and administration of banking, trust and insurance industries, and securities companies shall be formed separately from banking, trust and insurance business institutions, except as otherwise provided for by the state. (Article 6)

4.The securities regulatory authority of the State Council shall conduct centralized and unified supervision and administration of the national securities market in accordance with the law.(Article 7)

5.Public offering of securities shall satisfy the criteria provided in the laws and administrative regulations, and shall be registered pursuant to the law with the securities regulatory authority of the State Council or the authorities empowered by the State Council.(Article 9)

6.A company that has an initial public offer (Article IPO) of a new stock shall meet the following conditions: (1) It has a sound and well-functioning organizational structure; (2) It has sustainable operation capability; (3) No audit report with clean opinions on its financial accounting report in the most recent three years has been issued; (4) The issuer or its controlling shareholder or actual controller has not committed any crime of corruption, bribery, encroachment upon property, embezzlement of property or disturbance of the socialist market economic order in the most recent three years; (5) Other conditions prescribed by the securities regulatory authority of the State Council with the approval of the State Council.(Article 12)

7.Securities offered to the public shall be listed and traded on a stock exchange formed in accordance with the law or traded on any other national stock trading place approved by the State Council.(Article 37)

8.Any insider who has access to inside information on securities trading or who has unlawfully obtained inside information is prohibited from using such inside information to conduct securities trading activities.(Article 50)

9.Where securities are offered to the public and traded both at home and abroad, the information disclosed abroad by the parties with information disclosure obligations shall be disclosed within China at the same time.(Article 78)

10.The overseas securities regulatory authority shall not conduct investigation, evidence collection and other activities directly within the territory of the People’s Republic of China. Without the consent of the securities regulatory authority of the State Council and the competent departments of the State Council, no entity or individual may provide documents or materials relating to securities business activities to the overseas without approval.(Article 177)

11.Where a domestic enterprise directly or indirectly offers securities abroad or lists its securities for trading abroad, the enterprise shall comply with the relevant provisions of the State Council.(Article 224)

This English translation comes from the PRC National People’s Congress Official Website. In the near future, a more accurate English version translated by us will be available on China Laws Portal.