简体中文
China started to transform the enterprise bond issuance to a registration-based system from an approval-based one from March 1.
Announced in a notice by the National Development and Reform Commission (NDRC), the revised securities law simplifies regulations for stock exchange listings and tightens sanctions on insider trading.
Initial public offerings will no longer need prior approval from the China Securities Regulatory Commission. But the NDRC stressed higher requirements for information disclosure under the registration-based system and more responsibilities of intermediaries.
The revised law is regarded as a milestone in the China's capital market reform.
The new law clarified the requirement for issuing enterprise bonds, including the average distributed profits over the latest three years being sufficient to pay one-year interest. It encouraged the funds raised to invest in projects that conform to the macro-control policies and industrial policies.
The law also offers better protection for minority investors and requires companies to establish dispute resolution mechanisms to address shareholder grievances and improve transparency.
Companies are also no longer required to be profitable before listing but must provide precise financial information.
Companies found guilty of making false or misleading statements or withholding important information from shareholders are liable to face penalties ranging from one to 10 million yuan (143,000 to 1.4 million U.S. dollars).
Individuals found guilty of insider trading will be fined two to 10 times the value of their ill-gotten gains.
Financial sector employees, including regulators and those who work for brokerages or stock exchanges, are also barred from securities trading for their own account.
(CGTN&Xinhua&AFP)