China Securities Regulatory Commission, Administration of Securities Houses Measures

Promulgated: December 28 2001
Effective: March 1 2002
Applicability: The Measures apply to all securities houses registered in the PRC (Article 2).

Main contents: The Measures state that foreign institutions may establish Sino-foreign joint securities houses in the PRC subject to the provisions of PRC laws and China Securities Regulatory Commission regulations regarding the scope of business and the foreign stake in such joint ventures (Article 16). Securities houses are divided into comprehensive and brokerage securities houses. A brokerage securities house may generally act as an agent of an investor in securities trading, redemption, distribution of dividends and interest, custody and account opening, whereas a comprehensive securities company may deal in securities for its own account, underwrite securities issues, provide securities investment advice and manage client portfolios (Articles 4 and 5). The Measures set out conditions of establishing securities houses beyond those stipulated in the PRC, Securities Law (Articles 6 and 8). The Measures also set out the conditions of establishing an internet-based securities brokerage company (Article 7). Regarding the working personnel and senior officers of securities houses, the Measures list specific qualification requirements and disqualifying circumstances (Part Three). Detailed provisions on the required internal control and risk management of securities houses are also set out in the Measures (Part Four).
Related legislation: PRC, Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p31