Chapter 6 Securities law.ppt

Chapter 6 Securities law 1 Overview 2 Securities issuance 3 Securities listing and trading 4 Acquisition of listed companies 5 Disclosure 6 Securities firms 7 Securities Exchange 8 Securities regulatory organs 1 Overview 1.1 Concept of securities 1.2 Sources of securities law Stock Regs., 1993 Company Law, 1993 Securities Law, 1999 250 pieces of securities-related laws, administrative regulations and ministerial rules 2.1 Classification 2.1.1 Stocks 2.2 Conditions for stock issuance Conditions and procedures of securities issuance 2.2.1 IPO (1) production and operation conformity with State industrial policies (2) only one type of common stock is issued with equal rights for equal shares (3) promoters: no less than 35% of the total shares (4) promoter’s shares: no less than RMB 30 million in terms of absolute number (5) general public shares: no less than 25%, proportion for workers and staff no more than 10% of the amount to be issued to the public. If total issuance more that RMB 400 million, the CSRC may reduce such proportion, but not below 10% bottom line (6) promoters: not major violation of the law within previous 3 years 2.2.2 Re-issuance (1) former issuance has been fully subscribed for (2) interval since the former issue at least 12 months (3) profitable consecutively for the recent three years, able to pay dividends to its shareholders (4) financial and accounting documents: no misrepresentation for the recent three years (5) projected profit rate reaches the interest rate of bank deposits for the like period. 2.3 Conditions for bonds issuance 2.3.1 Initial issuance Illustration: CSRC sued by Hainan Kaili Company 2.4 Procedures for issuing securities 3 months waiting period If rejected, CSRC and department authorized by the State Council must explain the reasons 2.4.2 Issuance disclosure Public offer documents prior to public issuing Make prospectus available to public and prepare share subscription for