The CSRC revised and issued the Provisions on Strengthening the Supervision of Listed Securities Companies

[Announcement 7] On the revision of the Regulations on Strengthening Listing negotiable securities Regulations on Company Supervision

Announcement of China Securities Regulatory Commission

[2024] No. 7

It is hereby announced that Provisions on Strengthening the Supervision of Listed Securities Companies ), which shall come into force as of the date of promulgation.

China CSRC

May 10, 2024

The CSRC revised and issued the Provisions on Strengthening the Supervision of Listed Securities Companies

Annex 1. Decision on Amending the Provisions on Strengthening the Supervision of Listed Securities Companies. pdf

Listed securities companies have securities companies and listed company As a securities company, we should apply the relevant regulations on the supervision of securities companies; As a listed company, relevant regulations on listing and issuance supervision shall apply. In order to coordinate and link up relevant laws and regulations, strengthen the supervision of listed securities companies, urge listed securities companies to correct their business philosophy, focus on their main responsibilities, put functionality first, actively play the role of financial services in the real economy, highlight value creation, shareholder returns and investor protection, and implement the requirements of comprehensive risk management and full staff compliance management, To improve the effectiveness of information disclosure and play a role as a model in standardizing corporate governance, it is hereby stipulated as follows:

1、 The securities company's initial public offering and listing of securities and the issuance of new shares, convertible corporate bonds and other refinancing activities after listing should also comply with the Securities Law of the People's Republic of China, the Regulations on the Supervision and Administration of Securities Companies, the Administrative Measures for the Registration of Initial Public Offering Shares, and the Administrative Measures for the Registration of Securities Issuance of Listed Companies And other laws and regulations on the conditions of administrative licensing provisions such as securities issuance, apply to the regulatory authorities for issuing regulatory opinions, and provide relevant registration application materials, including regulatory opinions. If the initial public offering and listing of securities and refinancing involve the change of major shareholders or the actual controller of the company by the securities company, the relevant qualification review materials shall also be submitted in accordance with the relevant provisions of the Provisions on the Administration of Equity of Securities Companies.

Securities companies should reasonably determine the scale and timing of financing, strictly regulate the use of funds, focus on the main business, prudently carry out high capital consumption businesses, and improve the efficiency of capital use, in combination with shareholder returns and value creation capabilities, their own business conditions, market development strategies, etc.

2、 Where a listed securities company carries out a major asset restructuring involving the change of major shareholders or the actual controller of the company, it shall submit relevant qualification examination materials in accordance with the relevant provisions of the Provisions on the Administration of Equity Interests of Securities Companies.

3、 A listed securities company shall, in accordance with the Regulations on the Supervision and Administration of Securities Companies

The relevant provisions of the Provisions on Equity Management of Securities Companies specify in the articles of association that any unit or individual that becomes a major shareholder of a securities company or the actual controller of the company without the approval of the securities regulatory authority under the State Council shall make corrections within a time limit. Before the correction, the right to request, vote, nominate, propose and dispose of the shareholders' meeting shall not be exercised.

Shareholders of listed securities companies, actual controllers of shareholders and other related parties shall not require securities companies and their subsidiaries to encroach on the funds and assets of listed securities companies and their subsidiaries and damage the legitimate rights and interests of the company, other shareholders and customers through illegal related party transactions, foreign investment, financing, guarantees, sales of financial products and other ways.

4、 A listed securities company shall prepare an annual report of a listed company in accordance with the Standards for the Contents and Forms of Information Disclosure by Companies that Offer Securities to the Public No. 2 - Contents and Forms of Annual Reports, and at the same time, a listed securities company shall prepare an annual report for supervision of securities companies in accordance with the Standards for the Contents and Forms of Annual Reports of Securities Companies, The annual report of the listed company shall be disclosed according to the requirements of the listed company within the specified period, and then the annual report of the securities company supervision shall be submitted to the regulatory authority, and the audit report, audited accounting statements and notes therein shall be publicized on the website of the Securities Association of China and the company website as required. If there are significant data differences between the annual report disclosed to the public and the annual report submitted to the regulatory authority, the listed securities company shall disclose in a timely manner in the form of interim report and fully explain the reasons for the differences. The preparation and disclosure of the financial statements of a listed securities company shall comply with the provisions of the Accounting Standards for Business Enterprises and the relevant information disclosure rules, and shall fairly reflect the company's financial position, operating results and cash flows.

5、 A listed securities company shall disclose the information of the main holding and participating companies and the structured subjects under its control in accordance with the provisions of the Standards for the Contents and Forms of Information Disclosure by Companies that Offer Securities to the Public No. 2 - Contents and Forms of Annual Reports. If it is really inconvenient for a listed securities company to disclose due to special reasons such as state secrets and trade secrets, it may not disclose them, but it shall specify the reasons in relevant chapters.

6、 A listed securities company should continue to improve its corporate governance, establish a corporate governance structure with clear equity structure, simplified organizational structure, clear responsibility boundaries, sound information disclosure, reasonable incentives and constraints, effective internal control and checks, and good professional ethics, improve the operating mechanism of the organizational structure, ensure the independence and stability of the company's operation, and implement the requirements of comprehensive risk management, Strengthen the management of various domestic and overseas subsidiaries. A listed securities company shall improve the management of employees and the long-term incentive and restraint mechanism, strictly regulate short-term incentives, not excessive incentives, continue to improve the assessment and accountability mechanism and reputation risk management system, and disclose information about remuneration in accordance with laws, administrative regulations, the provisions of the CSRC and the stock exchange.

7、 In accordance with the provisions on disclosure of transactions in the listing rules of the stock exchange, the listed securities company can review and disclose the total amount of self operated investment every year by the shareholders' meeting for major external investment, including the situation that the self operated securities exceed a certain limit and may need to be disclosed in a timely manner and submitted to the shareholders' meeting for resolution; In case of any change in circumstances during the implementation of proprietary investment, the Board of Directors may be authorized by the Shareholders' Meeting to vote and make an announcement if the Articles of Association are met.

8、 A listed securities company shall, in accordance with the Regulations on Governance of Securities Companies and the Measures for the Administration of Risk Control Indicators of Securities Companies, propose to replace its legal representative, chairman, chairman of the board of supervisors or main person in charge of business management when the company or its directors, supervisors and senior managers are suspected of major violations of laws and regulations, and its financial situation deteriorates, In case of specific changes in risk control indicators, timely announcement shall be made on the website of the stock exchange and the media meeting the specified conditions, so as to fulfill the obligation of informing all shareholders.

9、 The shareholders and actual controllers who hold more than 5% of the shares of listed securities companies shall, in accordance with Article 10 of the Governance Standards for Securities Companies, notify the securities companies in a timely manner in case of specific circumstances.

10、 A listed securities company shall, in accordance with the relevant provisions of the Regulations on the Supervision and Administration of Securities Companies and the Interim Provisions on the Examination and Approval of the Business Scope of Securities Companies, obtain the approval of the CSRC when carrying out new business and operating innovative business. When announcing the resolutions of the board of directors and the shareholders' meeting on the proposed new business or innovative business, a listed securities company should also give a risk warning to investors, stating that the actual development of the relevant business of the listed securities company needs the approval of the regulatory authority, and there are cases where the regulatory authority does not approve the listed securities company because it fails to meet the laws, regulations and regulatory requirements.

11、 A listed securities company shall, in accordance with the provisions of the Measures for the Administration of Information Disclosure of Listed Companies, disclose the relevant information of major administrative licensing matters in a timely manner, that is, 11 companies shall, after making the resolution or decision of the administrative licensing application and the regulatory department makes the administrative licensing decision, disclose the relevant information in a timely manner on the website of the stock exchange and the media that meet the specified conditions. For general administrative licensing matters, listed securities companies shall publicly disclose the administrative licensing decisions of the regulatory authorities in their interim reports and annual reports.

12、 A listed securities company shall disclose the changes of its risk control indicators, the regulatory measures taken and other major matters in accordance with the Administrative Measures for Information Disclosure of Listed Companies and the Administrative Measures for Risk Control Indicators of Securities Companies. Including:

1. A listed securities company shall disclose in its quarterly report, interim report and annual report the specific situation and compliance with the main risk control indicators such as net capital; In daily operation, if core risk control indicators such as risk coverage ratio, capital leverage ratio, liquidity coverage ratio and net stable capital ratio do not meet the prescribed standards, they should be disclosed in a timely manner by means of temporary announcement, explaining the reasons, current status and possible impact.

If a listed securities company is approved or required by the regulatory authority to prepare a regulatory report on risk control indicators based on consolidated data, or adopts advanced risk measurement methods such as internal model method to calculate relevant risk control indicators, it shall explain the relevant caliber and differentiated arrangements at the time of disclosure.

2. If a listed securities company is subject to major regulatory measures or risk disposal measures that affect its business behavior and may have a significant impact on market prices, it shall confirm the occurrence of major events, timely disclose temporary announcements, and disclose them in the interim report and annual report. These measures include but are not limited to the company's restricted business activities, orders to suspend part of its business, stop approving new businesses, restrictions on dividend distribution, restrictions on the payment of remuneration and benefits to directors, supervisors and senior managers, restrictions on the transfer of property or the creation of other rights on property, orders to replace directors, supervisors and senior managers or restrictions on their rights, Revoke relevant business licenses, identify the responsible directors, supervisors and senior managers as inappropriate candidates, order the responsible shareholders to transfer their shares, restrict the responsible shareholders to exercise their shareholder rights, take temporary takeover of the company and other major regulatory measures or risk disposal measures.

13、 A listed securities company shall firmly establish the awareness of returning shareholders, formulate a reasonable plan for shareholders' return, and reasonably balance the use of operating profits for its own development and return to shareholders, in accordance with the provisions of the Regulatory Guidelines for Listed Companies No. 3 - Cash Dividends of Listed Companies and the Rules for Share Repurchase of Listed Companies, and in combination with the company's operation and management, Pay attention to improving the level of cash dividends, encourage the formation of institutional arrangements for the implementation of share buyback, actively improve shareholder returns and optimize the governance structure through multiple dividend distributions and buyback cancellation in a year.

14、 A listed securities company shall establish and improve relevant systems and procedures for investor relationship management activities, respond to investors' concerns in a positive, serious and professional manner, and objectively, truthfully, accurately and completely introduce and reflect the actual situation of the company on the basis of ensuring the compliance and fairness of information disclosure. The investor relations management staff of a listed securities company shall have the professional knowledge necessary for performing their duties and have good professional quality. If the parent company of a securities company is a listed company, the securities company shall designate a special person to cooperate and make professional responses on matters related to the operation of the securities company.

15、 A listed securities company shall, in combination with the characteristics of the securities industry and its own situation, establish and improve its information management system in accordance with the regulatory requirements for information disclosure management of listed companies, including but not limited to the following aspects:

1. Establish and improve the insider registration system, strictly define the scope of insider information and insiders as required, and do a good job in the registration and management of insiders.

2. Establish and improve the information confidentiality system, clarify the responsibilities and accountability measures, require all insiders of the company and those responsible for confidentiality to sign a confidentiality commitment, strictly strengthen the information management during the price sensitive period of insider information, and prevent the disclosure of insider information.

3. Establish and improve the information barrier system to prevent conflicts of interest and insider trading.

4. Establish and improve the information management emergency mechanism, formulate a practical emergency plan, clarify the responsibilities of relevant departments and personnel, take effective emergency measures in a timely manner, respond to market rumors in a timely manner, and actively prevent and effectively handle public relations crises.

5. Establish and improve the information disclosure management system involving the holding subsidiaries.

6. Establish an effective internal control system, and cooperate in the management of other listed companies' inside information learned in the course of practice.

16、 If it is really necessary for a listed securities company to communicate with the regulatory authorities on relevant matters, it shall do so after the market close on the trading day. If it involves major matters that may affect the company's share price, it shall suspend trading or make an announcement in a timely manner as required. If the communication matters involve inside information, the listed securities company shall include the relevant insiders of the regulatory department into the scope of insiders for registration.

17、 A listed securities company shall, in accordance with the principle of strictness, strictly implement the regulatory laws and regulations of securities companies and listed companies such as the Governance Standards of Securities Companies, the Regulations on Equity Management of Securities Companies, and the Governance Standards of Listed Companies, constantly improve the corporate governance structure and improve the corporate governance level.

18、 These Provisions shall come into force as of the date of promulgation.

Annex 2 Notes on the Revision of the Provisions on Strengthening the Supervision of Listed Securities Companies

In order to implement the Several Opinions of the State Council on Strengthening Supervision and Preventing Risks and Promoting the High Quality Development of the Capital Market, the Opinions on Strengthening the Supervision of Securities Companies and Public Funds and Accelerating the Construction of First class Investment Banks and Investment Institutions (for Trial Implementation), and strengthen the supervision of listed securities companies, our Commission has issued the Provisions on Strengthening the Supervision of Listed Securities Companies (hereinafter referred to as the Provisions) Modified. It is explained as follows:

1、 Revision background

In 2009, the Commission issued the Provisions on Strengthening the Supervision of Listed Securities Companies, which were revised in 2010 and 2020 respectively. The Regulations put forward clear requirements for listed securities companies in terms of financing behavior, information disclosure, insider information management, and played a positive role in regulating the governance of listed securities companies, strengthening internal control and compliance, and improving the level of information disclosure. As the corporate governance rule system continues to mature, listed securities companies maintain a standardized and steady development trend as a whole, but still face the problem of "large but not strong". There is still a big gap between the standards and requirements of first-class investment banks and investment institutions in terms of development philosophy, internal control governance, investor protection, information disclosure, etc. Therefore, it is necessary to further revise and improve the Regulations according to the current regulatory requirements and industry development situation.

2、 Revision ideas

First, maintain the basic framework to meet the needs of market development. The Regulations maintain the main framework unchanged, clarify that listed securities companies should comply with the relevant regulations of listed companies and securities companies, and strengthen the requirements of administrative licensing, information disclosure, information management, regulatory reporting, etc. At the same time, we will make adaptive adjustments based on the revision of relevant rules on issuance and listing in recent years and changes in the market and industry.

Second, play a leading role and optimize the concept of industry development. Implement the spirit of the Central Financial Work Conference, urge listed securities companies to focus on their main responsibilities, adhere to the functional, intensive, professional and characteristic development direction, improve corporate governance, and play an exemplary role in the industry.

Third, strengthen information disclosure requirements in combination with industry practice. In combination with the latest regulatory provisions, standardize the information disclosure requirements of listed securities companies, focus on core risk control indicators and other disclosure matters, and improve the effectiveness of information disclosure.

3、 Main revisions

（1） Optimize the concept of development, coordinate and standardize financing behavior

The first is the positioning of the calibration mechanism. Clearly require listed securities companies to correct their business philosophy, focus on their main responsibilities, put functionality first, actively play the role of financial services in the real economy, highlight value creation, shareholder returns and investor protection, implement comprehensive risk management and full staff compliance management requirements, and improve the effectiveness of information disclosure, Play a role of benchmarking in standardizing corporate governance.

Second, standardize market-oriented financing behavior. It is required that securities companies should reasonably determine the scale and timing of financing, strictly regulate the use of funds, focus on the main business, prudently develop high capital consumption businesses, and improve the efficiency of capital use by combining shareholder returns and value creation ability, their own business conditions, market development strategies, etc.

（2） Improve corporate governance, strengthen internal control and risk management requirements

First, improve corporate governance, clearly require listed securities companies to establish a corporate governance structure with clear equity structure, simplified organizational structure, clear responsibility boundaries, sound information disclosure, reasonable incentives and constraints, effective internal control and checks and balances, and good professional ethics, improve the operating mechanism of organizational structure, ensure the independence and robustness of the company's operation, and implement the requirements of comprehensive risk management, Strengthen the control of various domestic and overseas subsidiaries.

The second is to strengthen the regulation of shareholders and actual controllers, and emphasize that shareholders, actual controllers of shareholders and other related parties shall not require securities companies and their subsidiaries to encroach on the funds and assets of listed securities companies and their subsidiaries, damage the company and other shareholders Legal rights and interests of customers.

The third is to standardize the preparation and disclosure of financial statements, making it clear that the preparation and disclosure of financial statements of listed securities companies should comply with the provisions of the Accounting Standards for Business Enterprises and the relevant information disclosure rules, and fairly reflect the company's financial position, operating results and cash flows.

Fourth, improve the employee management and long-term incentive and restraint mechanism, strictly regulate short-term incentives, not excessive incentives, and require listed securities companies to continuously improve the assessment and accountability mechanism and reputation risk management system, and disclose salary related information in accordance with laws and regulations.

（3） Promote industry development and improve information disclosure requirements

Follow the principle of importance and necessity, and optimize the information disclosure requirements by classification.

First, in combination with arrangements such as consolidated supervision of securities companies, it is clear that listed securities companies that have been recognized or required by regulatory authorities to prepare regulatory statements of risk control indicators based on consolidated data, or adopt advanced risk measurement methods such as internal model method to calculate relevant risk control indicators, should explain the relevant caliber and differentiated arrangements when disclosing.

Second, the listed securities companies are required to disclose the specific situation and compliance with the main risk control indicators such as net capital in quarterly reports, interim reports and annual reports; When the core risk control indicators do not meet the specified standards, they shall be disclosed in a timely manner by temporary announcement, stating the reasons, current status and possible impact.

The third is to cancel the disclosure requirements for classification results of securities companies.

（4） Implement people's position and improve investor protection

First, establish and improve the investor protection mechanism. Emphasize that listed securities companies should establish and improve relevant systems and procedures for investor relationship management activities, respond to investors' concerns in a positive, serious and professional manner, and objectively, truthfully, accurately and completely introduce and reflect the actual situation of the company; The investor relations management staff of a listed securities company shall have the necessary professional knowledge to perform their duties. If the parent company of the securities company is a listed company, the securities company shall designate a special person to cooperate and make professional responses on matters related to the operation of the securities company.

Second, further highlight value creation and shareholder returns. It is clear that listed securities companies should firmly establish the awareness of repaying shareholders, formulate reasonable plans for shareholder returns in combination with the company's operation and management, reasonably balance the use of operating profits for their own development and repaying shareholders, attach importance to improving the level of cash dividends, and encourage the formation of institutional arrangements for implementing share buybacks, Actively improve shareholder returns and optimize the governance structure through multiple dividend distributions and buyback cancellation in a year.

4、 Adoption of opinions

From April 12 to 27, 2024, we will ask for public opinions on the revision of the Regulations. On the whole, all parties gave positive feedback to the Regulations and put forward some specific suggestions for modification. After our research item by item, most of the opinions have been fully absorbed. The suggestions that have not been fully absorbed are mainly the suggestions to relax the information disclosure and regulatory requirements of listed securities companies. The main consideration is that from the regulatory practice in recent years, some listed securities companies still have weak links in internal control and governance, and violations of laws and regulations occur from time to time. It is not appropriate to relax the relevant requirements at this stage.