State Council, Regulations for Handling Risks of Securities Companies

国务院证券公司风险处置条例

July 09, 2008 | BY

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Five measures may be taken to handle securities companies at risk.

Promulgated: April 23 2008
Effective: as of date of promulgation
Applicability: These Regulations also apply to the handling of risks of futures companies (Article 62).

Main Contents: Where a securities company's risk control indicators do not meet the relevant requirements and the company fails to complete rectification within the stipulated time limit, the State Council's securities regulatory authority may order the securities company to stop some or all of its businesses to carry out rectification (Article 7). In circumstances such as a major financial crisis, the State Council's securities regulatory authority may commission the management of the securities company's businesses involving clients such as securities brokerage business to a third party. In serious circumstances, the State Council's securities regulatory authority may put the securities company into receivership (Article 8).

According to Article 12, if a securities company faces major risks but is in the following conditions, it may apply directly to the State Council's securities regulatory authority for administrative reorganization:

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