Regulation on the Risk Disposal of Securities Companies (2016 Revision)

 2018-05-14  9


Regulation on the Risk Disposal of Securities Companies (2016 Revision)


· Document Number:Order No. 666 of the State Council

· Area of Law: Securities

· Level of Authority: Administrative Regulations

· Date issued:02-06-2016

· Effective Date:04-23-2008

· Status: Effective

· Issuing Authority: State Council

 

Regulation on the Risk Disposal of Securities Companies
(Promulgated by Order No. 523 of the State Council of the People's Republic of China on April 23, 2008; and revised in accordance with the Decision of the State Council on Amending Some Administrative Regulations on February 6, 2016)
Chapter I General Provisions
Article 1 To control and eliminate the risks of securities companies, protect investors' legitimate rights and interests and public interests, and safeguard the healthy development of the securities industry, this Regulation is formulated in accordance with the Securities Law of the People's Republic of China (hereinafter referred to as Securities Law) and the Enterprise Bankruptcy Law of the People's Republic of China (hereinafter referred to as Enterprise Bankruptcy Law).
Article 2 The securities regulatory agency under the State Council shall be in charge of organizing, coordinating and supervising the disposal of risks of securities companies.
Article 3 The securities regulatory agency under the State Council shall set up a coordination, cooperation and quick response mechanism for disposing the risks of securities companies together with the People's Bank of China, the public finance department under the State Council, the public security department under the State Council, other financial regulatory agencies under the State Council and the people's governments at the provincial level.
Article 4 In the course of disposing the risks of securities companies, the related local people's governments shall take effective steps to maintain social stability.
Article 5 It is required to guarantee the normal proceeding of the stock brokerage business in the course of disposing the risks of securities companies.
Chapter II Stopping Business for Rectification, Custody, Taking-over and Administrative Restructuring
Article 6 Where the securities regulatory agency under the State Council finds out that there are serious potential risks in a securities company, it may send the risk monitoring on-site working group to make a special-purpose inspection on the securities company, keep monitoring over the transfer of funds, disposal of assets, dispatch of personnel, use of seals, conclusion and performance of contract and other operation and management activities of the securities company, and report the relevant information to the related local people's government betimes.
Article 7 Where a securities company fails to reach the relevant standards in risk control indicators and fails to finish rectification within a prescribed time limit, the securities regulatory agency under the State Council may order it to stop part or all business for rectification for a period of no more than three months.
If its stock brokerage business is ordered to be stopped for rectification, the securities company may, within a prescribed time limit, entrust the business to a securities company recognized by the securities regulatory agency under the State Council or transfer its clients to other securities company. If it fails to do so within the prescribed time limit, the securities regulatory agency under the State Council will transfer its clients to other securities company.
Article 8 Where a securities company falls under any of the following circumstances, the securities regulatory agency under the State Council may keep custody of its stock brokerage business and other business involving clients, and, if the circumstances are serious, take over the company:
1. its governance is in chaos and its management is out of control;
2. it has embezzled the assets of clients and cannot make them up with its own fund;
3. it has defaulted in delivery in securities transaction settlement for many times, or the amount involved in its default is relatively huge;
4. it fails to reach the relevant standards in terms of risk control indicators, or it is having a serious financial crisis; and
5. other circumstances which may affect the continuous operation of the company.
Article 9 If the securities regulatory agency under the State Council decides to keep custody of the stock brokerage business and other business involving clients of a securities company, it shall, by following the prescribed procedure, select securities companies and other professional agencies to form a custody group to exercise the business management right over the stock brokerage business and other business involving clients of the securities company.
The custody group shall perform the following duties from the date when it keeps custody of the aforesaid business:
1. ensuring the normal and regulation-compliant operation of the stock brokerage business of the securities company under custody, and, when necessary, paying the working capital and clients' transaction settlement fund in advance in accordance with the relevant provisions;
2. taking effective measures to safeguard the safety of clients' assets during the period of custody;
3. checking the risks existing in the securities company, reporting emergency situations encountered in business operations to the securities regulatory agency under the State Council in a timely manner, and proposing solutions to such situations; and
4. other duties as specified by the securities regulatory agency under the State Council.
The custody period is generally 12 months at most. If continual custody is needed 12 months later, the securities regulatory agency under the State Council may make a decision on extending the custody period for another 12 months at most.
Article 10 The securities company under custody shall pay for the custody fee and the operation cost incurred during the custody period. The securities regulatory agency under the State Council shall examine and verify the aforesaid two fees.
The custody group assumes no liability for the losses of the securities company under custody.
Article 11 If the securities regulatory agency under the State Council decides to take over a securities company, it shall set up a taking-over group composed of professionals in accordance with the prescribed procedure to exercise the business management right of the securities company. The person in charge of the taking-over group shall exercise the functions and powers of the legal representative of the securities company, and the (general) meeting of shareholders, the board of directors, the board of supervisors, managers and deputy managers of the securities company shall all stop performing their functions and duties.
The taking-over group shall perform the following duties from the date when the take-over happens:
1. taking over the property, seals, account books, documents and other material of the securities company;
2. making decisions on the managerial affairs of the securities company;
3. ensuring the normal and regulation-compliant operation of the stock brokerage business of the securities company, and perfecting the internal control system;
4. taking stock of the property of the securities company, and preserving and recovering its assets according to law;
5. keeping the risks of the securities company under control, and putting forward solutions to such risks;
6. investigating the illegal acts of relevant workers of the securities company; and
7. other duties as specified by the securities regulatory agency under the State Council.
The taking-over period is generally 12 months at most. If continual taking-over is needed 12 months later, the securities regulatory agency under the State Council may make a decision on extending the taking-over period for another 12 months at most.
Article 12 When a securities company is facing with serious risks, if it satisfies the following conditions, it may directly apply to the securities regulatory agency under the State Council for administrative restructuring:
1. may be subject to administrative restructuring by the securities regulatory authority of the State Council;
2. may also be subject to administrative restructuring by the securities regulatory authority of the State Council.
For a securities company ordered to stop business for rectification, under custody or taken-over, if it satisfies the above-mentioned conditions, it may also apply to the securities regulatory agency under the State Council for administrative restructuring.
The securities regulatory agency under the State Council shall, within 30 days after accepting an application for administrative restructuring, make a decision of approval or disapproval. In the case of disapproval, it shall give corresponding reasons.
Article 13 A securities company may conduct administrative restructuring by way of capital increase, stock equity restructuring, debt restructuring, assets restructuring, merger or other form.
The administrative restructuring period is generally no more than 12 months. If the administrative restructuring is not done 12 months later, the securities regulatory authority of the State Council may decide to extend the administrative restructuring period.
The securities regulatory agency under the State Council shall coordinate and guide the administrative restructuring of securities companies.
Article 14 Any disposal decision made by the securities regulatory agency under the State Council on ordering a securities company to stop business for rectification, keeping custody of a securities company, taking over a securities company or allowing a securities company to conduct administrative restructuring shall be announced, and the announcement shall be posted at the place of business of the securities company concerned.
Such a decision shall contain the name of the securities company disposed, the disposal measure, reasons, coverage and other related issues.
The date of publication of such a decision shall be the date of disposal, and the decision shall come into force from the time when it is published.
Article 15 For a securities company which is ordered to stop business for rectification, kept under custody, taken over or subject to administrative restructuring, its debtor-creditor relationship does not change for any disposal decision.
Article 16 If a securities company reaches the normal operation conditions within the prescribed time limit after being ordered to stop business for rectification, kept under custody, taken over or subject to administrative restructuring, it may resume its normal operation upon the approval of the securities regulatory agency under the State Council.
Article 17 If a securities company still cannot reach the normal operation conditions within the prescribed time limit after being ordered to stop business for rectification, kept under custody, taken over or subject to administrative restructuring, but it is able to pay off due debts, the securities regulatory agency under the State Council shall cancel its securities business license according to law.
Article 18 A securities company which has been canceled of the securities business license shall stop running securities business, and arrange its clients to other securities companies based on the free will of clients. In the process of such arrangement, all parties concerned must take necessary measures to secure the normal proceeding of the clients' securities trading.
If any securities company which has been canceled of the securities business license fails to arrange its clients properly, the securities regulatory agency under the State Council may establish an administrative liquidating group in accordance with the provisions of Chapter III of this Regulation to put accounts in order, settle clients and transfer securities assets.
Chapter III Cancellation
Article 19 Where a securities company falls under the following circumstances simultaneously, the securities regulatory agency under the State Council may directly cancel it:
1. the circumstances of its illegal operation are particularly serious, and there are huge operating risks;
2. it cannot pay off due debts, and its assets are not enough to pay off all debts or it obviously lacks the repayment ability; and
3. its situation requires financial support from the securities investor protection fund.
Article 20 If a securities company still cannot reach the normal operation conditions within the prescribed time limit after being ordered to stop business for rectification, kept under custody, taken over or subject to administrative restructuring and falls under any of the circumstances prescribed in Article 19 (2) and (3) of this Regulation, the securities regulatory agency under the State Council shall cancel the company.
Article 21 To cancel a securities company, the securities regulatory agency under the State Council shall make a decision of cancellation, select professional agencies including law firm and accounting firm to form an administrative liquidating group in accordance with the prescribed procedure, and subject the company to administrative liquidation.
A decision of cancellation shall be published, the date of publication of the decision shall be the date of disposal, and the decision shall come into force from the time when it is published.
For the administrative liquidation conducted by the securities regulatory agency under the State Council on securities companies before this Regulation comes into force, the date of public notice of administrative liquidation shall be the date of disposal.
Article 22 During the period of administrative liquidation, the person in charge of the administrative liquidating group shall exercise the functions and powers of the legal representative of the securities company concerned.
The administrative liquidating group shall perform the following duties:
1. managing the property, seals, account books, documents and other material of the securities company;
2. straightening out accounts, checking on the assets and liabilities of the securities company, and putting on registration the creditor's rights that conform to the state provisions;
3. assisting in screening, confirming and purchasing the creditor's rights that conform to the state provisions;
4. assisting the governing body of the securities investor protection fund to make up the clients' transaction settlement fund;
5. settling clients based on the free will of clients;
6. transferring securities assets; and
7. other duties as specified by the securities regulatory agency under the State Council.
The term “securities assets” as mentioned above refers to assets necessary for a securities company to maintain the normal operation of its stock brokerage business, such as the computer information management system, the trading system, the communication network system and trading seats, etc.
Article 23 The (general) meeting of shareholders, the board of directors, the board of supervisors, managers and deputy managers of a canceled securities company shall stop performing their duties.
During the period of administrative liquidation, the shareholders of the canceled securities company may not conduct liquidation on their own or participate in the administrative liquidating work.
Article 24 During the period of administrative liquidation, the stock brokerage business and other business involving clients of the canceled securities company shall be under the custody of another securities company or other professional agency which is selected by the securities regulatory agency under the State Council in accordance with the prescribed procedure.
Article 25 For an affiliated company established or actually controlled by a cancelled securities company, if its assets, personnel, finance or business is mixed with that of the canceled securities company, it shall be brought into the scope of administrative liquidation upon the examination and approval of the securities regulatory agency under the State Council.
Article 26 The debtor-creditor relationship of a securities company does not change with the cancellation of the securities company.
From the date when a securities company is cancelled, interest on its debts stops occurring.
Article 27 The liquidation results achieved by the administrative liquidating group on the accounts of the cancelled securities company must be audited by accounting firms with corresponding securities or futures business qualifications, and be reported to the securities regulatory agency under the State Council for confirmation.
The administrative liquidating group shall, based on the account liquidation results confirmed by the securities regulatory agency under the State Council, apply to the governing body of the securities investor protection fund for making up the clients' transaction settlement fund.
Article 28 The administrative liquidating group shall, within 10 days after it is set up, publish a public notice on issues about creditors that need to be put on registration.
Creditors fitting the relevant state provisions shall, within 90 days after the public notice is published, declare their creditor's rights to the administrative liquidating group upon the strength of the relevant evidentiary material. The administrative liquidating group shall put them on registration according to the relevant provisions. Where any creditor fails to declare its creditor's right within the prescribed time limit without any legitimate reason, its creditor's right will not be put on registration.
For any creditor's right determined as fitting the relevant state provisions on purchase of creditor's right, the administrative liquidating group shall apply for purchase funds and assist the completion of the purchase in accordance with the relevant state provisions in a timely manner. For any creditor's right determined as not fitting the relevant state provisions, the administrative liquidating group shall notify the creditor concerned of the unfitness.
Article 29 The administrative liquidating group shall transfer the securities assets to institutions qualified for engaging in securities business by the way of public bidding or public inquiry, etc. The plan for transferring securities assets shall be submitted to the securities regulatory agency under the State Council for approval.
Article 30 The administrative liquidating group may not transfer any assets other than securities assets, unless the assets are easy to depreciate or incur losses or the transfer of such assets is for protecting the interests of clients and creditors, under these circumstances, the approval of the securities regulatory agency under the State Council must be obtained.
Article 31 The administrative liquidating group may not pay off certain particular individual debts, unless it falls under any of the following circumstances which are for protecting the interests of clients and creditors:
1. debts incurred due to the opposite party's performance of the contract which neither party has fully performed upon the request of the administrative liquidating group;
2. normal expenditure such as payment for labor and social insurance premiums that need to be paid for maintaining the normal business operations; and
3. other expenses incurred from the performance of duties by the administrative liquidating group.
Article 32 To protect the interests of creditors, the administrative liquidating group may apply to the people's court for cashing the securities assets against which such mandatory measures as sealing-up, detain and freezing have been taken before they are disposed by the administrative liquidating group and other assets upon the approval of the securities regulatory agency under the State Council, and the funds obtained therefrom shall be frozen.
Article 33 The administrative liquidating expenses can be paid off with the property of the disposed securities company at any moment upon the examination and approval of the securities regulatory agency under the State Council.
The term “administrative liquidating expenses” as mentioned above refers to expenses necessary for the administrative liquidating group to manage and transfer the property of the disposed securities company, to perform its duties, and to hire professional agencies, etc.
Article 34 The administrative liquidating period is generally within 12 months. If the administrative liquidating work is not done 12 months later, the securities regulatory agency under the State Council may make a decision to extend the period for another 12 months at most.
Article 35 During the administrative liquidating period, the disposed securities company is exempted from administrative charges, value-added tax, business tax and other taxes prescribed in administrative regulations.
Article 36 Administrative liquidation of securities companies ordered by the securities regulatory agency under the State Council to close shall be governed by the relevant provisions of this Chapter by analogy.
Chapter IV Bankruptcy Liquidation and Restructuring
Article 37 When a securities company is cancelled or closed according to law, if it falls under the circumstances prescribed in Article 2 of the Enterprise Bankruptcy Law, after the administrative liquidating work is done, the securities regulatory agency under the State Council or the administrative liquidating group entrusted by it may apply to the people's court for subjecting the securities company to bankruptcy liquidation in accordance with the relevant provisions of the Enterprise Bankruptcy Law.
Article 38 For a securities company which falls under the circumstances prescribed in Article 2 of the Enterprise Bankruptcy Law, the securities regulatory agency under the State Council may directly apply to the people's court for restructuring the company.
The securities company or any of its creditors may file an application for bankruptcy liquidation or restructuring with the people's court in accordance with the relevant provisions of the Enterprise Bankruptcy Law, but the bankruptcy liquidation or restructuring must be subject to the approval of the securities regulatory agency under the State Council as required by Article 129 of the Securities Law.
Article 39 For a securities company not requiring financial support from the securities investor protection fund, the securities regulatory agency under the State Council shall cancel its securities business license before approving its bankruptcy liquidation. The securities company shall stop operating securities business and settle its clients in accordance with the provision of Article 18 of this Regulation.
For a securities company requiring financial support from the securities investor protection fund, the securities regulatory agency under the State Council shall disapprove the application for bankruptcy liquidation as filed by the securities company or any of its creditors, cancel the company in accordance with the provisions of Chapter III of this Regulation and subject it to administrative liquidation.
Article 40 If the people's court rules to accept a securities company's application for restructuring or bankruptcy liquidation, the securities regulatory agency under the State Council may recommend administer candidate to the people's court.
Article 41 In the process of bankruptcy liquidation, the administer may directly put on registration the creditor's rights registered in administrative liquidation but not fitting the state provisions on purchase of creditor's rights.
Article 42 If the people's court orders the restructuring of a securities company, the securities company or its administer shall submit a draft restructuring plan to the creditors' meeting, the securities regulatory agency under the State Council and the people's court simultaneously.
Article 43 The securities company or its administer shall file an application for approving the restructuring plan with the people's court within 10 days after the draft restructuring plan is adopted by all voting groups of the creditors' meeting. If the restructuring plan involves any issues prescribed in Article 129 of the Securities Law, the securities company or its administer shall at the same time file an application for approving such issues with the securities regulatory agency under the State Council, which shall make a decision of approval or disapproval within 15 days after receiving the application.
Article 44 If the draft restructuring plan is not adopted by some voting groups of the creditors' meeting, but the plan satisfies the conditions prescribed in Article 87 (2) of the Enterprise Bankruptcy Law, the securities company or its administer may apply to the people's court for approving the draft restructuring plan. If the draft plan involves any issues prescribed in Article 129 of the Securities Law, the securities company or its administer shall at the same time file an application for approving such issues with the securities regulatory agency under the State Council, which shall make a decision of approval or disapproval within 15 days after receiving the application.
Article 45 The execution of an approved restructuring plan shall be conducted by the securities company with the administer in charge of supervision. The administer shall submit a supervision report to the people's court and the securities regulatory agency under the State Council after the supervision period expires.
Article 46 If the related issues of the restructuring plan are not approved by the securities regulatory agency under the State Council or the restructuring plan is not approved by the people's court, the people's court shall rule to terminate the restructuring procedure and declare the securities company bankrupt.
Article 47 In case the restructuring procedure is terminated and the people's court declares the securities company bankrupt, the securities regulatory agency under the State Council shall make a decision on canceling the securities company, and the people's court shall organize the bankruptcy liquidation work in accordance with the provisions of the Enterprise Bankruptcy Law. Related tax issues must be governed by the Enterprise Bankruptcy Law and the Law of the People's Republic of China on the Administration of Tax Collection.
If the people's court holds that the securities company shall be subject to administrative liquidation, the securities regulatory agency under the State Council shall set up an administrative liquidating group in accordance with the provisions of Chapter III of this Regulation by analogy to straighten out accounts, assist in screening, confirming and purchasing creditor's rights fitting the state provisions, assist the governing body of the securities investor protection fund to make up the clients' transaction settlement fund and transfer securities assets, etc.
Chapter V Supervision and Coordination
Article 48 The securities regulatory agency under the State Council shall perform the following duties in disposing the risks of securities companies:
1. working out the risk disposal plan and organizing its implementation;
2. dispatching the risk disposal on-site working group to supervise and guide the disposed securities company, the custody group, the taking-over group, the administrative liquidating group, the administer and other institutions and persons participating in the risk disposal;
3. coordinating the work of the securities exchange concerned, the securities registration and clearing institution and the governing body of the securities investor protection fund, and maintaining the normal proceeding of the stock brokerage business of the disposed securities company;
4. placing on file a case about the illegal act of the securities company concerned for investigation and giving corresponding punishment;
5. informing the public security organ and other related organ of the suspected criminal offences in a timely manner, and transferring cases of suspected crimes pursuant to the relevant provisions;
6. informing the related local people's government of the risk status of the securities company and whether it affects social stability; and
7. other duties as specified by laws and administrative regulations.
Article 49 As for cases of suspected crimes found out in disposing the risks of securities companies, if they are within the jurisdiction of the public security organ, the public security department under the State Council shall investigate them and give corresponding punishments in a centralized way. The related local people's governments shall provide support and cooperation.
When a risk disposal on-site working group, administrative liquidating group or administer needs to consult or copy some material detained by the public security organ, which is relevant to its work concerned, the public security organ shall support and cooperate with it. After a securities company enters into the bankruptcy proceedings, the public security organ shall transfer the frozen assets involved to the people's court which accepts the bankrupt case, and retain necessary evidential material.
Article 50 In the process of disposing a securities company pursuant to the provisions of Chapter II and Chapter III of this Regulation, the securities regulatory agency under the State Council may apply to the people's court for suspending the civil procedure or enforcement process in which the securities company or its branch office is listed as a defendant, a third party or an enforcee.
For any affiliated company which is set up or actually controlled by the securities company, if its assets, personnel, finance or business is mixed with that of the securities company, the securities regulatory agency under the State Council may apply to the people's court for suspending the civil procedure or enforcement process in which the affiliated company is listed as a defendant, a third party or an enforcee.
During the period when the measure mentioned in the preceding two paragraphs is taken, except the circumstances prescribed in Article 31 of this Regulation, repayment for certain particular individual debts of the disposed securities company is not allowed.
Article 51 Where it is possible that the disposed securities company or its affiliated client will transfer or harbor illegal capital or securities or that the securities company will repay certain particular individual debts in violation of this Regulation, the securities regulatory agency under the State Council may forbid the transfer-out of capital or securities from the related capital account or securities account.
Article 52 The people's governments of the places where the disposed securities company and its branch institutions are located shall cooperate in the risk disposal work in accordance with the relevant state provisions, work out a plan for maintaining social stability, check, inspect and eliminate unstable factors, and maintain the normal business of the disposed securities company.
The people's governments of the places where the disposed securities company and its branch institutions are located shall establish an individual creditor's right screening and confirming group composed of persons from the related entities so as to identify and confirm the registered individual creditor's rights in accordance with the relevant state provisions.
Article 53 The governing body of the securities investor protection fund shall purchase the creditor's rights and make up the clients' transaction settlement fund in accordance with the relevant state provisions.
The governing body of the securities investor protection fund may check on the use of the securities investor protection fund.
Article 54 The shareholders, actual controller and creditors of the disposed securities company and other institutions and persons related to the company shall cooperate in the risk disposal work.
Article 55 The directors, supervisors, senior managers and other related persons of the disposed securities company shall properly keep the company's property, seals, account books, documents and other material and goods used and managed by them, hand them over to the custody group, the taking-over group, the administrative liquidating group or administer in accordance with the relevant requirements, and cooperate in the investigation of the risk disposal on-site working group, the custody group, the taking-over group and the administrative liquidating group.
Article 56 The custody group, the taking-over group, the administrative liquidating group and the securities company ordered to stop business for rectification or under custody or administrative restructuring shall report their work to the securities regulatory agency under the State Council in accordance with the relevant provisions.
Article 57 The custody group, the taking-over group, the administrative liquidating group and their workers must perform duties with due diligence and faithfulness.
If any shareholder or creditor of the disposed securities company has evidence to prove that the custody group, the taking-over group, the administrative liquidating group or any of their workers fails to perform duties according to law, a complaint may be filed with the securities regulatory agency under the State Council. If the fact is confirmed as true upon investigation, the securities regulatory agency under the State Council shall order the group or person concerned to correct or simply replace it/him.
Article 58 Any institution or person under any of the following circumstances shall be banned from participating in the risk disposal of securities companies:
1. it/he has been imposed on a criminal penalty, or a case about the crime it/he is suspected of being involved in has been placed on file for investigation and prosecution;
2. it/he is suspected of being involved in a gross violation and a case concerned has been placed on file by the administrative department for investigation, or it has not been three years since it/he is imposed on an administrative penalty for a gross violation;
3. it/he is still being banned from accessing into the securities market;
4. it is weak in internal control and there are great potential risks;
5. it/he has interest relationship with the disposed issues of the disposed securities companies; or
6. other circumstances under which it is inappropriate for it/him to participate in the risk disposal of securities companies as deemed by the securities regulatory agency under the State Council.
Chapter VI Legal Liability
Article 59 If the directors, supervisors, senior managers and other persons of a disposed securities company hold chief responsibility for the disposal of the company, the competent authority shall suspend their qualification for one to three years, and, if the circumstances are serious, cancel their post-holding qualification or securities practice qualification and, as an optional punishment, take the measure of banning them from accessing into the securities market in accordance with the relevant provisions.
Article 60 If any director, supervisor, senior manager or other person of a disposed securities company falls under any of the following circumstances, the competent authority shall impose a fine of not less than his annual income but not more than double the annual income and, as an optional punishment, suspend his post-holding or securities practice qualification; if the circumstances are serious, the competent authorities shall cancel his post-holding or securities practice qualification, impose a fine of not less than double his annual income but not more than five times of his annual income, and take the measure of banning him from accessing into the securities market in accordance with the relevant provisions:
1. refusing to cooperate with the on-site working group, custody group, taking-over group or administrative liquidating group in performing its duties according to law;
2. refusing to hand over property, seals, account books, documents or other material to the custody group, taking-over group or administrative liquidating group;
3. concealing, destroying or forging the relevant material, or intentionally providing false information;
4. concealing property or displacing or transferring property without approval;
5. disrupting the normal operation and management order and business operations of securities companies, and giving rise to unstable factors; or
6. other circumstances disrupting the normal proceeding of the risk disposal of securities companies.
If the controlling shareholder or actual controller of any securities company instigates any director, supervisor or senior manager to commit the above-mentioned illegal acts, the controlling shareholder or actual controller shall be given a heavier punishment pursuant to the preceding paragraph.
Chapter VII Supplementary Provisions
Article 61 Where a securities company needs to be disbanded due to splitting, merger or any cause of disbandment prescribed in the bylaws, it shall file with the securities regulatory agency under the State Council an application for dissolution attached by the reason for dissolution and its plans for transferring securities assets, winding up its securities business and settling clients, etc. Liquidation is required after disbandment upon the approval of the securities regulatory agency under the State Council, and the liquidation process must be subject to the supervision of the securities regulatory agency under the State Council.
Article 62 The risk disposal of futures companies shall be governed by this Regulation by analogy.
Article 63 This Regulation shall come into force as of the date of promulgation.