Laws and regulations and departments


December, 2008

China Securities Regulatory Commission issued Management Measures for Securities Issuance, Listing and Sponsor Business

If the sponsor institution and its controlling shareholder, actual controller and important related parties held more than 7% total shares of the issuer or the issuer held or controlled more than 7% shares of the sponsor institution, the sponsor shall unite a non-associated sponsor agency to perform sponsor duties together as issuing and listing securities of the issuer and this non-associated sponsor institution was the first sponsor institution.


China Securities Regulatory Commission introduced Guidelines for Direct Investment Business Pilot of Securities Companies

It clearly put forward that securities companies carried out direct investment business in the form of subsidiaries, which achieved more stringent institutional separation than internationally accepted behaviors of establishing direct investment departments within the securities companies; it stipulated that net capital of pilot securities companies in recent 12 months should not be less than 1.5 billion; securities companies invested direct investment subsidiaries with their own funds and the amount should not exceed 15% net capital of securities companies.

July, 2011

China Securities Regulatory Commission introduced Guidelines on Supervision for Direct Investment Business of Securities Companies

It clearly stipulated that for the counseling institution, financial advisor, sponsor institution or lead underwriter for companies to be listed, their direct investment subsidiaries, direct investment funds, industrial funds and fund management agencies may no longer invest companies to be listed since the signing of relative agreement or carrying out substantive business.

December, 2016

The Securities Association of China introduced Management Standards for Private Equity Subsidiaries of Securities Companies, Management Standard for Alternative Investment Subsidiaries of Securities Companies

In the future, securities traders could only set up one wholly-owned fund subsidiary which must be solely engaged in investment business and sub-subsidiaries with comprehensive investment business were not allowed to be established. The company must be a fund management company with an exclusive business boundary. Parent company should strengthen risk controls and capital constraints of subsidiary company, assume heavier regulatory responsibilities than before and conduct a comprehensive review of risks. The Securities Association of China would enhance the risk management of direct investment made by securities trader. In the future, monthly, quarterly and annual reports needed to be uploaded regularly.