Regulations on Risk Disposal of Securities Companies (Revised in 2016)

Order of the State Council No.666

February 6, 2016

(Promulgated by the Order of the State Council of the People's Republic of China No.523 on April 23, 2008; and revised in accordance with the Decision of the State Council on Revising Certain Administrative Regulations on February 6, 2016)

Chapter I General Provisions

Article 1 In order to control and neutralize the risk of securities companies, protect the investors' lawful rights and interests and public interests, guarantee the sound development of securities business, the Regulations is hereby formulated in accordance with the Securities Law of the People's Republic of China (hereinafter referred to as the Securities Law) and the Enterprise Bankruptcy Law of the People's Republic of China (hereinafter referred to as the Enterprise Bankruptcy Law).

Article 2 The securities regulatory body under the State Council shall, according to law, undertake the organization, coordination and supervision of the disposal of securities companies' risks.

Article 3 The securities regulatory body under the State Council shall establish the mechanism of coordination and rapid response for the disposal of the securities companies' risks, together with the People's Bank of China, the financial department, the public security department and other financial supervision regulatory agencies of the State Council and the people's governments at the provincial level.

Article 4 During the process of the disposal of securities companies' risks, the related local people's governments shall take effective measures to maintain social stability.

Article 5 During the process of disposal of the securities companies' risks, the normal operation of the stock broking business shall be guaranteed.

Chapter II Suspension for Rectification, Trusteeship, Taking over and Administrative Restructuring

Article 6 Where the securities regulatory body under the State Council finds any serious hidden risks in the securities companies, the said regulatory body may send field working team for risk supervision to conduct special inspection on the securities companies. The said regulatory body shall supervise such operating and managing activities as the transfer of funds, the disposal of assets, the allotment of personnel, the use of seal, the conclusion and performance of contract by the securities companies, etc, and report the relevant situations to the relevant local people's government in time.

Article 7 Where the risk control standard of the securities companies does not comply with the relevant provisions and the securities companies fail to complete rectification within the designated time limit, the securities regulatory body under the State Council may order the securities companies to stop part or all of their operations and undertake rectification. The period of suspension for rectification shall not exceed 3 months.
Where the stock broking operations thereof are ordered to be suspended for rectification, the securities companies may, within the designated time limit, entrust their stock broking operations to the securities companies approved by the securities regulatory body under the State Council for management or transfer their clients to other securities companies. Where the securities companies do not entrust the stock broking operations or transfer the clients according to the requirement overdue, the securities regulatory body under the State Council shall transfer the clients to other securities companies.

Article 8 Where any of the following situations occurs in any securities companies, the securities regulatory body under the State Council may take in trust its stock broking operations concerning the clients. Where the circumstances are serious, the securities regulatory body under the State Council may take over this securities company:
1. The securities company is confused in governance and out of control in management;
2. The securities company embezzles the clients' assets and cannot make up by itself;
3. In the securities trading settlement, the settlement defaults happen several times or the amount of
settlement defaults is relatively large;
4. The standard of risk control does not comply with the stipulations, causing serious financial crisis; or
5. Other situations which may have influence on the continuing operation of the securities company.

Article 9 Where the securities regulatory body under the State Council decides to take in trust the securities companies' stock broking operations concerning the clients, etc., the securities regulatory body under the State Council shall choose securities companies or other professional institutions to establish the trusteeship group according to the established procedure to exercise the operation and management rights of the stock broking operations concerning the clients, etc., of the securities companies in trust.
The trusteeship group shall perform the following duties from the date of trusteeship:
1. The trusteeship group shall ensure that the securities companies' stock broking operations work normally in accordance with the stipulations. If necessary, the trusteeship group shall pay the operating funds and clients' transaction settlement funds in advance in accordance with the stipulations;
2. The trusteeship group shall take effective measures to guarantee the security of the clients' assets during the period of trusteeship;
3. The trusteeship group shall inspect the risks in the securities companies and report to the securities regulatory body under the State Council the emergencies occurring in the process of the operations in time and propose the solution hereto; and
4. The trusteeship group shall perform other duties as requested by the securities regulatory body under the State Council.
The trusteeship time limit shall not exceed 12 months generally. Where the time limit of 12 months expires and the trusteeship really needs to be extended, the securities regulatory body under the State Council may decide to extend the trusteeship time limit, provided that the extended trusteeship time limit shall not exceed 12 months at most.

Article 10 The securities companies in trust shall pay the trusteeship cost and the operating cost during the period of trusteeship. The securities regulatory body under the State Council shall examine and verify the trusteeship cost and the operating cost during the period of trusteeship.
The trusteeship group shall not assume the deficit of the securities companies in trust.

Article 11 Where the securities regulatory body under the State Council decides to take over the securities companies, the securities regulatory body under the State Council shall organize the professional personnel to establish the take-over group according to the established procedures, which shall exercise the operation and management rights of the taken-over securities companies. The principal of the take-over group shall exercise the authority as the legal representative of the taken-over securities companies. The board of shareholders or shareholders' general meeting, board of directors, board of supervisors, manager and assistant manager of the taken-over securities companies shall stop the performance of their duties.
The take-over group shall perform the following duties as of the date of take-over:
1. To take over the securities companies' data of property, seal and account books and documents, etc.;
2. To decide on the managing affairs of the securities companies;
3. To ensure that the securities companies' stock broking operations work normally according to the provisions and to improve the internal control system;
4. To check the property of the securities companies, and maintain and recover the property according to law;
5. To control the risks of the securities companies and propose the plan for risk neutralizing;
6. To check the unlawful acts of the relevant personnel of the securities companies; and
7. To perform other duties as requested by the securities regulatory body under the State Council.
The take-over time limit shall not exceed 12 months generally. Where the time limit of 12 months expires and the take-over really needs to be extended, the securities regulatory body under the State Council may decide to extend the take-over time limit, provided that the extended take-over time limit shall not exceed 12 months at most.

Article 12 Where serious risks occur in the securities companies and the following qualifications are met, the administrative restructuring may be undertaken by the securities regulatory authorities of the State Council:
1. The financial information is authentic and integral;
2. Having got support from the people's governments at provincial level or the relevant parties; and
3. Having the specific rectification measures and feasible restructuring plan.
Where the qualifications stipulated in the preceding paragraph are met, the securities companies which have been ordered to suspension for rectification, entrusted or taken over may also undergo administrative restructuring organized by the securities regulatory authorities of the State Council.

Article 13 Where the securities companies conduct the administrative restructuring, the following measures may be taken: capital contribution, equity restructuring, debt restructuring, assets restructuring, consolidation or other measures.
The time limit of the administrative restructuring shall not exceed 12 months generally. Where the time limit of 12 months expires and administrative restructuring has not been completed, the securities regulatory authorities of the State Council may decide to extend the administrative restructuring period, provided that the extended administrative restructuring time limit shall not exceed 6 months at most.
The securities regulatory body under the State Council shall coordinate in and guide the administrative restructuring of the securities companies.

Article 14 Where the securities regulatory body under the State Council makes such disposal decisions as ordering the securities companies to suspend business for rectification, trusteeship, taking over and administrative restructuring, the securities regulatory body under the State Council shall announce the decision and put up the announcement on the business premises of the disposed securities companies.
The disposal decision shall specify the names of the securities companies disposed, disposal measures, main content, scope and other relevant items.
The date of promulgation of the disposal decision shall be the disposal date. The disposal decision shall come into force as of the date of promulgation.

Article 15 Where the securities companies are ordered to suspend business for rectification, to be entrusted, to be taken over or to conduct administrative restructure, the debtor-creditor relationship thereof shall not change due to the disposal decision.

Article 16 Where the securities companies meet the conditions for normal business operation within the stipulated time limit after suspension for rectification, entrustment, taking-over or administrative restructure, such securities companies may resume normal business operation upon the approval by the securities regulatory body under the State Council.

Article 17 Where the securities companies still fail to meet the conditions for normal business operation within the stipulated time limit after suspension for rectification, entrustment, taking-over or administrative restructure, provided that they may discharge the due debt, the securities regulatory body under the State Council shall revoke the securities business license thereof according to law.

Article 18 The securities companies whose securities business licenses have been revoked shall cease the business operation of securities. The clients shall be transferred to other securities companies on the voluntary basis. During the process of arrangement, the relevant parties shall take necessary measures to guarantee the normal operation of the clients' securities transaction.
Where the securities companies whose securities business licenses have been revoked fail to arrange the clients or anything else, the securities regulatory body under the State Council may establish the administrative liquidation group to liquidate the accounts, arrange clients and transfer the securities assets by application of the provisions of Chapter III thereof.

Chapter III Revocation

Article 19 Where all the following circumstances are found in the securities companies, the securities regulatory body under the State Council may directly revoke the said securities companies:
1. Having very serious illegal business circumstances and great business risks;
2. Being unable to discharge the due debt and the assets are not enough to discharge all debts or it obviously lacks the capacity to discharge such debts; and
3. Needing to use the stock investors' protection fund.

Article 20 Where the securities companies still fail to meet the conditions for normal business operation within the stipulated time limit after suspension for rectification, entrustment, taking-over or administrative restructure, and the circumstances provided in Item 2 or Item 3 of Article 19 thereof have occurred, the securities regulatory body under the State Council shall revoke the said securities companies.

Article 21 Where the securities regulatory body under the State Council decides to revoke the securities companies, the securities regulatory body under the State Council shall make the revocation decision and choose the professional institutions of law office, accounting firm, etc, to establish the administrative liquidation group according to the stated procedures in order to conduct the administrative liquidation of the said securities companies.
The revocation decision shall be promulgated. The promulgation date of the revocation decision shall be the disposal date. The revocation decision shall come into force as of the promulgation date.
Where the securities regulatory body under the State Council has conducted the administrative liquidation of the securities companies prior to the implementation of the Regulations, the promulgation date of the administrative liquidation shall be the disposal date.

Article 22 During the period of the administrative liquidation, the principal of the administrative liquidation group shall exercise the authority as the legal representative of the securities companies which are revoked.
The administrative liquidation group shall perform the following duties:
1. To manage the securities companies' data such as property, seal, account books and documents, etc;
2. To liquidate the accounts, verify related information of assets and liabilities and register the creditor's rights which comply with the state regulations;
3. To help to screen, confirm and purchase the creditor's rights which comply with the state regulations;
4. To assist the regulatory body of the stock investors' protection fund in recovering the clients' transaction settlement funds;
5. To arrange the clients on the voluntary basis;
6. To transfer the securities assets; and
7. To perform other duties as requested by the securities regulatory body under the State Council.
The securities assets mentioned in the preceding paragraph refer to the assets of the computer information management system, transaction system, communication network system and transaction seats, etc, which are necessary for the securities companies to maintain the normal operation of the stock broking operations.

Article 23 The board of shareholders or shareholders' general meeting, board of directors, board of supervisors, manager and assistant manager of the revoked securities companies shall stop the performance of their duties.
During the period of administrative liquidation, the shareholders of the revoked securities companies shall not organize the liquidation by themselves and shall not participate in the work of administrative liquidation.

Article 24 During the period of administrative liquidation, the securities regulatory body under the State Council shall, according to the established procedures, choose such professional institutions as securities companies to take in trust the revoked securities companies' stock broking operations concerning the clients, etc.

Article 25 Where the assets, personnel, finance or operation of the affiliated companies which are established or really controlled by the securities companies are blended with those of the revoked securities companies, the said items shall be brought into the scope of the administrative liquidation upon the examination and approval by the securities regulatory body under the State Council.

Article 26 The debtor-creditor relationship of the securities companies shall not change due to the fact of being revoked.
After the securities companies are revoked, interest shall not be accumulated on the debt of the securities companies.

Article 27 The result of the accounts of the revoked securities companies as liquidated by the administrative liquidation group shall be audited by the accountant firm having the relevant qualifications of securities and futures business and shall be reported to the securities regulatory body under the State Council for identification.
The administrative liquidation group shall apply to the regulatory body of the stock investors' protection fund for the funds to recover the clients' transaction settlement funds on the basis of the result of accounts liquidation identified by the securities regulatory body under the State Council.

Article 28 Within 10 days as of the establishment, the administrative liquidation group shall promulgate the relevant items which the creditors need to register.
The creditors who comply with the relevant provisions of the state shall, within 90 days of the date of promulgation and with the relevant certificates, apply to the administrative liquidation group for the creditor's rights. The administrative liquidation group shall register the said applications according to the provisions. The administrative liquidation group shall not register the overdue reports which do not have justification.
Where the registered creditor's rights comply with the purchase provisions of the state after screening and confirmation, the administrative liquidation group shall apply for the purchase funds and assist in the purchase according to the relevant provisions of the state in time. Where the registered creditor's rights do not comply with the purchase provisions of the state after screening and confirmation, the administrative liquidation group shall inform the creditors who submitted the applications.

Article 29 The administrative liquidation group shall transfer the security assets in the institutions with the qualification of securities operation business by means of bid invitation, public inquiry and other public measures. The transfer plan of the securities assets shall be reported to the securities regulatory body under the State Council for approval.

Article 30 The administrative liquidation group shall not transfer assets other than the security assets. The following circumstances shall be excluded: the assets approved by the securities regulatory body under the State Council, assets prone to be disparaged and suffer losses or in other circumstances necessary for protecting the interest of the clients and creditors.

Article 31 The administrative liquidation group shall not discharge the debts individually, excluding the following circumstances for protecting the interest of the clients and creditors:
1. The debts arising from the request made by the administrative liquidation group to the opposing party for performing the contract which has not been performed completely by both parties;
2. The normal expenses of staff's labor reward and social insurance expenditures, etc., which shall be paid to maintain the normal business operations; and
3. Other expenses arising from the performance of duties by the administrative liquidation group.

Article 32 In order to protect the interests of the creditors, the administrative liquidation group may, after getting the approval of the securities regulatory body under the State Council, apply to the people's court to conduct the realization disposal of the securities assets and other assets which are sealed, detained, frozen or subject to other compulsory measures prior to the disposal. The funds from the realization shall be frozen.

Article 33 The expenses of the administrative liquidation shall, after being examined and approved by the securities regulatory body under the State Council, be discharged from the property of the disposed securities companies at any time.
The expenses of administrative liquidation mentioned in the preceding paragraph refer to the expenses needed by the administrative liquidation group to manage and transfer the property of the securities companies and the expenses needed by the administrative liquidation group to perform duties and engage the professional institutions, etc.

Article 34 The time limit of administrative liquidation shall not exceed 12 months generally. Where the time limit of 12 months expires and the administrative liquidation has not been completed, the securities regulatory body under the State Council may decide to extend the time limit of administrative liquidation, provided that the extended time limit of administrative liquidation shall not exceed 12 months at most.

Article 35 During the period of administrative liquidation, the disposed securities companies may be exempted from the taxes of administrative charges, value-added taxes and business taxes, etc., which are stipulated in the administrative regulations.

Article 36 Where the securities companies are ordered to close down by the securities regulatory body under the State Council according to law and need to conduct administrative liquidation, the relevant provisions of this Chapter shall prevail.

Chapter IV Bankruptcy Liquidation and Reforming

Article 37 Where the securities companies are revoked and closed down according to law and any circumstances as provided in the Article 2 of the Law of the People's Republic of China on Enterprise Bankruptcy is found herein, the securities regulatory body under the State Council or its entrusted administrative liquidation group may, after finishing the administrative liquidation, apply to the people's court for the bankruptcy liquidation of the securities companies which are revoked and closed down in accordance with the relevant provisions of the Law of the People's Republic of China on Enterprise Bankruptcy.

Article 38 Where the circumstance of the Article 2 of the Law of the People's Republic of China on Enterprise Bankruptcy can be found in the securities companies, the securities regulatory body under the State Council may directly apply to the people's court for the reforming to the said securities companies.
The securities companies or their creditors may, according to the relevant provisions of the Law of the People's Republic of China on Enterprise Bankruptcy, apply to the people's court for the bankruptcy liquidation or reforming to the securities companies, provided that the application shall be approved by the securities regulatory body under the State Council in accordance with the provision of the Article 129 of the Law of the People's Republic of China on Securities.

Article 39 Where the stock investor's protection funds need not to be used for the securities companies, the securities regulatory body under the State Council shall revoke the stock business license thereof prior to approving of bankruptcy liquidation. The securities companies shall stop the operation of securities business and arrange the clients subject to Article 18 thereof.
Where the stock investor's protection funds need to be used for the securities companies, the securities regulatory body under the State Council shall not approve the bankruptcy liquidation application from the said securities companies or their creditors and shall revoke the said securities companies and proceed the administrative liquidation in accordance with the Chapter III thereof.

Article 40 Where the people's court orders to accept the reforming or bankruptcy liquidation application of the securities companies, the securities regulatory body under the State Council may recommend the suitable person for administration to the people's court.

Article 41 Where the securities companies are charged to liquidate for bankruptcy, the said administrant may directly register the creditor's rights which have been registered during administrative liquidation and do not comply with the purchase provisions of the nation.

Article 42 Where the people's court orders for the securities companies to reform, the securities companies or the administrant shall submit the reforming draft plan to the creditors' meeting, the securities regulatory body under the State Council and people's court at one time.

Article 43 Within 10 days as of the date for passing of the reforming draft plan by all vote groups of the creditor's meeting, the securities companies or the administrant shall apply to the people's court for approving the reforming plan. Where the reforming plan covers the relevant items of the Article 129 of the Law of the People's Republic of China on Securities, the securities companies or the administrant shall apply to the securities regulatory body under the State Council for approving the relevant items at the same time. The securities regulatory body under the State Council shall give the decision on whether or not to approve the application within 15 days as of receiving the application.

Article 44 Where the part of the vote groups of the creditor's meeting do not pass the reforming draft plan but the reforming draft plan comply with the provisions of the Article 87 Item 2 of the Law of the People's Republic of China on Enterprises Bankruptcy, the securities companies or the administrant may apply to the people's court for approving the reforming draft plan. Where the reforming draft plan covers the relevant items of the Article 129 of the Law of the People's Republic of China on Securities, the securities companies or the administrant shall apply to the securities regulatory body under the State Council for approving the relevant items at the same time. The securities regulatory body under the State Council shall make the decision on whether or not to approve the application within 15 days as of receiving the application.

Article 45 The reforming plan which has been approved shall be implemented by the securities companies. The administrant shall take the responsibility to supervise. Where the duration of supervision expires, the administrant shall submit the supervision report to the people's court and the securities regulatory body under the State Council.

Article 46 Where the relevant items of the reforming plan do not get the approval from the securities regulatory body under the State Council or do not get the approval from the people's court, the people's court orders to terminate the reforming procedures and declares bankruptcy to the securities companies.

Article 47 Where the reforming procedures terminate and the securities companies are declared bankruptcy by the people's court, the securities regulatory body under the State Council shall make a revoke decision to the securities companies and the people's court shall organize the bankruptcy liquidation subject to the Law of the People's Republic of China on Enterprise Bankruptcy. The taxation items shall be implemented in accordance with the Law of the People's Republic of China on Enterprise Bankruptcy and the Law of the People's Republic of China on the Administration of Tax Levying.
Where the people's court thinks it necessary to proceed administrative liquidation to the securities companies, the securities regulatory body under the State Council shall, subject to the Chapter III thereof, establish the administrative liquidation group, liquidate the accounts, help to screen, confirm, purchase the creditor's rights complying with the provisions of the nation, help the regulatory body of the stock investors' protection fund to recover the clients' transaction settlement funds and transfer the securities assets, etc.

Chapter V Supervision and Coordination

Article 48 The securities regulatory body under the State Council shall perform the following duties while disposing the risks of the securities companies:
1. To formulate the risks disposal plan for the securities companies and organize the implementation of the plan;
2. To send the field working group for risks disposal to supervise and guide the disposed securities companies, trusteeship group, take-over group, administrative liquidation group, administrant and other institutions and personnel participating in the risks disposal;
3. To coordinate with the stock exchange, the stock registration and settlement institution and the regulatory body of the stock investors' protection fund to guarantee the normal working of the stock broking operation of the disposed securities companies;
4. To register and check the illegal acts of the securities companies and impose punishment on such acts;
5. To report to the public security the suspected criminal offence in time and to transfer the cases suspected of crime in accordance with the relevant provisions;
6. To report to the relevant local people's government the risks conditions of the securities companies and the influence on the social stability; and
7. To perform other duties as requested by the laws and administrative regulations.

Article 49 Where the cases are suspected of committing crime and are within the jurisdiction of the public security, during the process of disposing the risks of the securities companies, the public security department under the State Council shall unitedly organize to investigate and prosecute them according to law. The relevant local people's government shall support and cooperate in the said work.
Where the field working group for the risks disposal, administrative liquidation group and administrant need to inquire about or copy the data related to their work from the data detained by the public security, the public security shall support and cooperate in the said work. Where the securities companies undergo the bankruptcy procedure, the public security shall transfer the frozen assets involved to the people's court accepting the bankruptcy cases according to law and retain the necessary proof materials.

Article 50 Where the securities regulatory body under the State Council disposes the securities company subject to the Chapter II and Chapter III thereof, the securities regulatory body under the State Council may apply to the people's court for ceasing the civil action procedure or the executive routine in which the said securities company and its affiliates are defendants, the third party or the person subject to enforcement.
Where the assets, personnel, finance or operation of the affiliated companies which are established or really controlled by the securities companies are blended with those of the disposed securities companies, the securities regulatory body under the State Council may apply to the people's court for ceasing the civil action procedure or the executive routine in which the said affiliated companies are the defendants, the third party or the person subject to enforcement.
During the period of exercising the measures set forth by the above two items, the debts of the disposed securities companies shall not be discharged individually, excluding the circumstances of the Article 31 thereof.

Article 51 Where the disposed securities companies or their related clients may transfer, hide the illegal funds and securities or the securities companies may discharge the debts individually in violation of the provisions thereof, the securities regulatory body under the State Council may forbid the outward transfer of the funds and securities of the relevant funds accounts and securities accounts.

Article 52 The people's government where the disposed securities companies and their affiliates are located shall, according to the relevant provisions of the state, cooperate in the risks disposal for the securities companies, formulate the pre-arranged plan for maintaining the social stability, screen, prevent and neutralize destabilizing factors, and maintain the normal business order of the disposed securities companies.
The people's government where the disposed securities companies and their affiliates are located shall organize the personnel of the related units to establish the screening and confirmation group for individual creditor's rights to screen and confirm the registered individual creditor's rights in accordance with the provisions of the state.

Article 53 The regulatory body of the stock investor's protection fund shall purchase the creditor's rights and recover the clients' transaction settlement funds in accordance with the provisions of the state.
The regulatory body of the stock investor's protection fund may inspect the service condition of the stock investor's protection fund.

Article 54 The shareholders, real controller, creditors, relevant institutions and personnel of the disposed securities companies shall cooperate in the risks disposal for the securities companies.

Article 55 The director, supervisor, administrative officers and other relevant personnel of the disposed securities companies shall keep well the securities companies' property, seal, account books, documents and other articles used and managed by themselves and transfer them to the trusteeship group, take-over group, administrative liquidation group or administrant as requested, and cooperate in the survey work of the field working group for risks disposal, trusteeship, take-over group, administrative liquidation group.

Article 56 The trusteeship group, take-over group, administrative liquidation group and the securities companies which are ordered to suspend business for rectification, to be entrusted, or to conduct administrative restructure shall report the working conditions to the securities regulatory body under the State Council in accordance with the provisions.

Article 57 The trusteeship group, take-over group, administrative liquidation group and their working personnel shall work diligently and perform their duties loyally.
Where the shareholders and creditors of the disposed securities companies have the evidence to prove that the trusteeship group, take-over group, administrative liquidation group and their working personnel do not perform their duties according to law, the said shareholders and creditors may appeal to the securities regulatory body under the State Council. After investigating and verifying the situations, the securities regulatory body under the State Council shall order the trusteeship group, take-over group, administrative liquidation group and their working personnel to rectify or replace them.

Article 58 Any institution or personnel that is involved in any one of the following circumstances is forbidden to participate in the risks disposal for the securities companies:
1. The institution or personnel has been imposed upon the criminal penalty or is suspected of committing crime and is placed on file for investigation and prosecution;
2. The institution or personnel is suspected of commit serious crime and is placed on file for inspection by the administrative department or it is no more than 3 years since the said institution or personnel was imposed upon the administrative penalty for illegal acts;
3. The institution or personnel is during the period with no access to the stock market;
4. The institution has weak internal control and serious hidden risks;
5. The institution or personnel has stake in the disposal items of the disposed securities companies; or
6. Other circumstances where the securities regulatory body under the State Council deems the institution or personnel unsuitable to participate in the risks disposal for the securities companies.

Chapter VI Legal Liabilities

Article 59 Where the directors, supervisors, administrative officers, etc., of the securities companies are held mainly liable for the disposal of the said securities companies, their post-holding qualifications shall be suspended for 1-3 years. In serious cases, their post-holding qualifications and securities occupational qualifications shall be revoked, and the measures of no access to the stock market may be applied to them in accordance with the provisions.

Article 60 Where the directors, supervisors, administrative officers and relevant personnel of the disposed securities companies are found to be involved in any of the following circumstances, a fine amounting to one to two times of their annual income shall be imposed on them and their post-holding qualifications and securities occupational qualifications may be suspended. In serious cases, their post-holding qualifications and securities occupational qualifications shall be revoked and a fine amounting to two to five times of their annual income shall be imposed on them, and the measures of no access to the stock market may also be applied to them in accordance with the provisions:
1. To refuse to cooperate with the field working group, trusteeship, take-over group and administrative liquidation group in performing their duties;
2. To refuse to transfer the property, seal, account books, document or other data to the trusteeship group, the take-over group and administrative liquidation group;
3. To hide, destroy, forge the relevant data or provide the false information deliberately;
4. To hide the property, and remove and transfer the property without authorization;
5. To disturb the normal operation and management order and operation working of the securities companies, thus inducing unstable factors; or
6. Other circumstances in which the normal operation of the risks disposal for the securities companies is disturbed.
Where the controlling shareholder or the real controller of the securities companies incites the directors, supervisors and administrative officers to conduct illegal acts as stipulated in the preceding paragraph, the controlling shareholder and the real controller shall be given a heavier punishment in accordance with the provisions of the preceding paragraph.

Chapter VII Supplementary Provisions

Article 61 Where the securities companies need to be dismissed due to division, consolidation or the occurrence of cause of dismissal as stipulated in the articles of association of the companies, the said securities companies shall apply to the securities regulatory body under the State Council for dismissal with explanation of the cause of dismissal and the plan for transferring the security assets, terminating the securities business and arranging the clients, etc. After obtaining the approval from the securities regulatory body under the State Council, the said securities companies shall be dismissed and liquidated according to law. The process of liquidation shall be supervised by the securities regulatory body under the State Council.

Article 62 The risks disposal of the futures companies shall be implemented with reference to the Regulations.

Article 63 The Regulations shall come into force as of the date of promulgation.