Provisions of the State Council on Regulating the Services Rendered by Intermediary Institutions for the Public Issuance of Stocks by Companies
Article 1
These Provisions are formulated for the purposes of regulating the acts of intermediary institutions in providing services for the public issuance of stocks by companies, improving the quality of listed companies, protecting the legitimate rights and interests of investors, and promoting the healthy and stable development of the capital market.
Article 2
These Provisions shall apply to the activities such as fee collection in connection with the services provided by securities companies, accounting firms, law firms and other institutions (hereinafter collectively referred to as intermediary institutions) for the public issuance of stocks by companies within the territory of the People's Republic of China.
Article 3
When providing services for the public issuance of stocks by companies, intermediary institutions shall adhere to the principles of honesty and trustworthiness, diligence and responsibility, independence and objectivity. Meanwhile, they shall be staffed with practitioners possessing corresponding professional capabilities and qualifications, and establish effective risk control systems such as conflict-of-interest review mechanisms.
Article 4
In providing services for the public issuance of stocks by companies, intermediary institutions shall not collaborate with companies in conducting illegal acts such as financial fraud, fraudulent issuance, or improper information disclosure. The documents prepared and issued by them shall not contain any false records, misleading statements or material omissions.
Article 5
Intermediary institutions shall follow market-oriented principles, reasonably determine their fee standards based on factors such as workload and required resource input, and stipulate the fee arrangements in contracts with issuers.
Article 6
Securities companies engaging in sponsorship business may collect service fees in phases according to the progress of work, provided that the collection of fees and the amount of fees shall not be conditional upon the outcome of the public issuance and listing of stocks.
Securities companies engaging in underwriting business shall comply with the provisions of the securities regulatory authority under the State Council, collect service fees after comprehensively evaluating factors such as project costs, and shall not adopt a fee ratio that increases in proportion to the issuance scale.
Article 7
Accounting firms performing audit services may collect service fees in phases according to the progress of work, provided that the collection of fees and the amount of fees shall not be conditional upon the audit results or the outcome of the public issuance and listing of stocks.
Article 8
Law firms providing services for the public issuance of stocks by companies shall collect fees in a unified manner and comply with the relevant provisions of the judicial administrative departments and other departments under the State Council on the charging standards for legal services.
Article 9
Intermediary institutions and their practitioners shall not be involved in any of the following circumstances:
Collecting fees beyond the scope agreed in the contract, or indirectly raising the fee standards through means such as temporary price hikes;
Evading regulatory requirements to collect service fees by signing supplementary agreements or making separate arrangements, or adjusting the collection of service fees between different businesses in violation of relevant provisions;
Making equity investments in violation of regulations, or seeking improper interests by obtaining listing bonus fees linked to the public issuance and listing of stocks;
Other acts of charging fees or conducting disguised fee-charging in violation of state regulations.
Article 10
Local people's governments at all levels shall not grant rewards to issuers or intermediary institutions conditional upon the outcome of the public issuance and listing of stocks.
Article 11
When applying for the public issuance of stocks, issuers shall clearly specify in the prospectus submitted or other relevant information disclosure documents the standards and amounts of various intermediary service fees, as well as the fee payment arrangements of the issuers.
Article 12
Securities regulatory, financial, judicial administrative and other departments shall strengthen information communication and coordination, strengthen supervision over the practice activities of intermediary institutions in accordance with the law and their respective responsibilities; where necessary, they may take measures such as joint on-site inspections and investigate and punish illegal acts in accordance with the law.
Article 13
Where an intermediary institution violates these Provisions, the securities regulatory, financial, judicial administrative, market supervision and administration departments shall, in accordance with their respective responsibilities, order it to make corrections, issue a warning, confiscate its illegal gains, and may concurrently impose a fine of not less than one time but not more than ten times the amount of the illegal gains; if there are no illegal gains or the illegal gains are less than 100,000 yuan, a fine of not less than 100,000 yuan but not more than 1,000,000 yuan may be imposed concurrently; the directly responsible persons-in-charge and other directly responsible personnel shall be given a warning and may also be concurrently imposed a fine of not less than 100,000 yuan but not more than 1,000,000 yuan. Where other provisions are specified by law, such provisions shall prevail.
Where a practitioner of an intermediary institution violates the provisions of Article 9 of these Provisions, the securities regulatory, financial, judicial administrative and other departments shall, in accordance with their respective responsibilities, order him/her to make corrections, issue a warning, confiscate his/her illegal gains, and may concurrently impose a fine of not less than one time but not more than ten times the amount of the illegal gains; if there are no illegal gains or the illegal gains are less than 100,000 yuan, a fine of not less than 100,000 yuan but not more than 1,000,000 yuan may be imposed concurrently; if the circumstances are serious, he/she may be concurrently prohibited from engaging in relevant businesses for a period of not less than one month but not more than one year. Where other provisions are specified by law, such provisions shall prevail.
Article 14
Where an issuer violates the provisions of Article 11 of these Provisions, the securities regulatory authority shall order it to make corrections, issue a warning, and may concurrently impose a fine of not less than 100,000 yuan but not more than 1,000,000 yuan; the directly responsible persons-in-charge and other directly responsible personnel shall be given a warning and may also be concurrently imposed a fine of not less than 100,000 yuan but not more than 1,000,000 yuan. Where the controlling shareholder or actual controller of the issuer organizes or instigates the commission of the aforesaid illegal acts, or conceals relevant matters leading to the occurrence of the aforesaid circumstances, it/he shall be imposed a fine of not less than 100,000 yuan but not more than 1,000,000 yuan; the directly responsible persons-in-charge and other directly responsible personnel shall be given a warning and shall also be imposed a fine of not less than 100,000 yuan but not more than 1,000,000 yuan.
Article 15
The securities regulatory authority under the State Council shall, in accordance with the law, incorporate the compliance of intermediary institutions with these Provisions into the integrity archives of the securities market.
Article 16
Where local people's governments at all levels violate the provisions of Article 10 of these Provisions and grant rewards to issuers or intermediary institutions after the date of implementation of these Provisions, such rewards shall be recovered, and the competent authorities shall impose sanctions on the responsible leading personnel and directly responsible personnel in accordance with the law.
Article 17
For intermediary institutions providing services for the public issuance of depositary receipts or convertible corporate bonds by companies, these Provisions shall apply mutatis mutandis.
Article 18
The securities regulatory, financial, judicial administrative and other departments under the State Council may formulate implementation measures in accordance with these Provisions.
Article 19
These Provisions shall come into force on February 15, 2025.
