(Effective Date 1997.04.12)
CHAPTER I GENERAL PROVISIONS CHAPTER II TRADING IN SECURITIES CHAPTER III QUALIFICATIONS OF PRIMARY DEALERS AND VERIFICATIONS OF THESE QUALIFICATIONS CHAPTER IV RIGHTS AND OBLIGATIONS OF PRIMARY DEALERS CHAPTER V ALTERATION AND TERMINATION OF THE QUALIFICATION OF PRIMARY DEALERS CHAPTER VI RULES ON PUNISHMENT CHAPTER VII SUPPLEMENTARY ARTICLES Article 1 These Regulations have been formulated with a view to ensuring the smooth development of the open market business, safeguarding Article 2 The open market business referred to in these Regulations means the activity of open buying and selling securities conducted Article 3 Primary dealers in the open market business (hereinafter referred to as primary dealers) referred to in these Regulations Article 4 The People’s Bank of China shall take charge of examining and approving matters concerning the determination of, change Article 5 The Open Market Business Operational Office (hereinafter referred to as the Operational Office) of the People’s Bank of
Article 6 The categories of securities for trading refer to policy- oriented financial securities, fund-raising securities of the central Article 7 The categories of securities for trading shall include purchase, sale and counterpurchase. Article 8 In trading securities with the People’s Bank of China, primary dealers shall sign relevant agreements with the latter. Article 9 There shall be seven different time limits for counterpurchase i.e., 7 days, 14 days, 21 days, 28 days, 2 months, 3 months Article 10 Securities trading shall normally be conducted by inviting bids, including bidding in terms of the amount and bidding in terms Article 11 The liquidation of funds for securities trading shall be handled in accordance with the procedures for accounting examination Article 12 Securities registration, trust and transaction shall all be conducted with the Central National Debt Registration Settlement Co
CHAPTER III QUALIFICATIONS OF PRIMARY DEALERS AND VERIFICATIONS OF THESE Article 13 Those applying to become primary dealers shall meet the following qualifications: 1. Commercial banks, securities companies and trust and investment companies which have been established as an independent 2. Abiding by state laws and decrees concerning economic affairs and finance, as well as provisions formulated by the 3. The registered capital of an urban cooperative bank, a securities company and a trust and investment company shall not be 4. The volume of securities trading by a securities company and a trust and investment company shall constitute a considerable 5. Having the ability and being willing to perform various obligations as specified by Article 4 of these Regulations; and 6. Other conditions prescribed by the People’s Bank of China. Article 14 Institutions that have been qualified as “independent primary dealers of national debts of the People’s Republic of China” Article 15 Any agency that meets the conditions as listed in Article 13 of these Regulations may file an application for becoming a 1. A brief introduction of itself. 2. Business license (duplicate). 3. Duplicates of year-end balance sheets that have been audited by certified public accountant firm. 4. The specific department that will participate in the open market business and the composition of its staff; and 5. Other relevant data whose submission is required by the People’s Bank of China. Article 16 Any agency that has become a primary dealer following examination and approval shall be issued a “certificate of qualification CHAPTER IV RIGHTS AND OBLIGATIONS OF PRIMARY DEALERS Article 17 Primary dealers shall enjoy the following rights: 1. Direct securities trading with the People’s Bank of China. 2. Priority in obtaining information on the open market business released by the People’s Bank of China, as well as 3. Conveniences and services provided by the People’s Bank of China and relevant securities registration and settlement departments 4. Taking part in activities including joint meetings of primary dealers held regularly by the People’s Bank of China, exchanges, 5. Participation in discussion of rules and systems of the People’s Bank of China concerning the open market business. 6. Mutual trading of policy financial bonds and fund accommodation funds of the central bank in line with relevant stipulations 7. Other rights granted by law. Article 18 Primary dealers shall have the following obligations: 1. Active participation in securities trading. Those that do not participate in trading or bidding or offer quotations 2. Fulfilment of the trading tasks assigned by the People’s Bank of China in times of special needs for macro-economic controls 3. Conduction of honest trading with the People’s Bank of China and offering of reasonable market quotations. 4. Supply of information concerning the fund position, the possession of securities and trading on the secondary securities market, 5. Regular supply of market information and market analytical data to the Operational Office, and timely report of major incidents. 6. Strict performance of other obligations as specified in relevant provisions on the management of the open market business.
CHAPTER V ALTERATION AND TERMINATION OF THE QUALIFICATION OF PRIMARY Article 19 The People’s Bank of China shall make annual examination of the qualification of primary dealers. Such examination shall 1. Participation in the open market business. 2. Performance in the securities business in a year. 3. Changes in assets and debts as well as losses and profits in a year. 4. Observation of stipulations in these Regulations and other regulations on the management of the open market business; 5. Other aspects that call for examination. The People’s Bank of China shall announce the result of these examinations. Article 20 Primary dealers that change their names or merge with others shall go through qualification alteration procedures with the People’s Article 21 Those that voluntarily give up their qualification for primary dealers shall go through corresponding procedures with Article 22 Those that fail to fulfil the trading tasks assigned by the People’s Bank of China shall have their qualification as primary dealers Article 23 Those that involve in serious cases of collaborate manipulating of prices in securities trading shall have Article 24 Those that commit other acts in violation of laws and regulations shall be dealt with in accordance with relevant laws Article 25 The People’s Bank of China shall publish the names of those primary dealers whose qualifications have been suspended or cancelled. Article 26 Those whose qualification for primary dealers have been suspended or revoked shall cease to enjoy various rights granted Article 27 The qualifications and corresponding rights of those primary dealers whose business licenses have been revoked
Article 28 Those failing to submitted materials to higher authorities in accordance with provisions or providing fraudulent materials shall Article 29 Those that fail to strike deals or offer quotations for three successive trading days in a year without reporting to Article 30 Those that violate other provisions concerning the open market business shall be dealt with in accordance with relevant CHAPTER VII SUPPLEMENTARY ARTICLES Article 31 The People’s Bank of China shall interpret and revise these Regulations. Article 32 These Regulations shall take force on the date of promulgation.
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