China Securities Regulatory Commission, Guidelines on the Contents and Format of Annual Reports of Securities Companies (2008 Revision)

中国证券监督管理委员会证券公司年度报告内容与格式准则（2008年修订）

March 12, 2008 | BY

clpstaff &clp articles &

More requirements for securities companies on information disclosure.

Clp Reference: 3700/08.01.14 Promulgated: 2008-01-14 Effective: 2008-01-14

Promulgated: January 14 2008
Effective: as of date of promulgation

Main Contents: Article 5 specifies the types of reports that shall be audited by accounting firms with securities- and futures-related business qualifications: financial reports of securities companies; the annual financial reports of securities companies that prepare consolidated financial statements, subsidiaries that fall under the scope of consolidation and special purpose entities; the annual financial reports of jointly-operated companies and joint ventures that have a major impact on the financial reports of securities companies; and other special reports required by the China Securities Regulatory Commission. Securities companies must publish the full text of the audit opinion of the certified public accountant in the main body of their annual reports (Article 6). Accounting firms responsible for the audit of annual financial statements of securities companies shall conduct testing and assessment of the internal controls of the company and issue a special report on the review of internal controls (Article 7).

The Guidelines require companies to disclose information such as:

(1) the number and distribution of their securities business departments and securities service departments;

(2) the change in their equity (or paid-up capital) within the reporting period including share increase through raising of capital, restructuring and merger, and transfer of equity, as well as the relevant approval document number and a summary description of the injection or restructuring and swap of assets by investors; and

(3) the total salaries received from the company by directors (in the case of independent directors, this shall be listed separately), supervisors and senior management personnel, and the quantity of company shares and share options they hold (Articles 16, 20 and 25).

Companies shall calculate the net capital and the relevant risk control indicators, and list the figures at the beginning of the reporting period (year) and at the end of the reporting period (Article 19). They shall also conduct an analysis of the major impact of the economic environment and market conditions during the reporting period on their main businesses and business performance (Article 27).

Related Legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21; PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p.31; Enterprise Accounting Guidelines, Feb 15 2006; and Enterprise Accounting Guidelines - Application Guide, Oct 30 2006

Repealed Legislation: Guidelines on the Contents and Format of Annual Reports of Securities Companies, Feb 4 2002

clp reference:3700/08.01.14promulgated:2008-01-14effective:2008-01-14

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