Futures in China
Interim Measures for Administration of Securities and Futures Investment Consult 2014-06-23
(Approved by the State Council on November 30, 1997 and promulgated by the Securities Commission of the State Council on December 25, 1997)
 
Chapter I General Provisions
Article 1 The Measures are formulated to strengthen the administration of securities and futures investment consultancy and safeguard investors' lawful rights and interests as well as social, public interests.
 
Article 2 The Measures shall be abided by when the securities and futures investment consultancy business is conducted within the boundary of the People's Republic of China.
The securities and futures investment consultancy as termed in the Measures refers to the activities conducted by the institutions and the staff engaged in investment consulting services with regard to the provision for securities and futures investors or clients with direct or indirect paid consulting services including analyses, predictions or suggestions for investment in securities and futures in the following ways:
(1) provide securities and futures investment consultancy services upon the acceptance of the entrustment by the investor or client;
(2) sponsor lectures, report meetings and analysis meetings regarding securities and futures investment consultancy;
(3) publish articles, commentaries and reports concerning securities and futures investment consultancy in newspapers, and provide securities and futures investment consultancy services through radio and TV station and other public media;
(4) provide securities and futures investment consultancy services through telecommunications equipment and systems such as telephone, fax and computer network;
(5) other methods as affirmed by the China Securities Regulatory Commission (CSRC).
 
Article 3 The business license granted by the CSRC shall be obtained according to the regulations specified in the Measures before any securities and futures investment consultancy business is to be conducted. Without the permission of the CSRC, no institution or individual is allowed to be engaged in the securities and futures investment consultancy services as specified in Article 2 of the Measures.
The securities institutions, futures brokerage institutions and their staff shall comply with the regulations of the Measures when engaged in the securities and futures investment consultancy business beyond the scope of their business.
 
Article 4 Relevant laws, regulations, rules and relevant provisions of the CSRC shall be observed with the principle of objectivity, justness, honesty and creditability upheld when dealing in the securities and futures investment consultancy business.
 
Article 5 The CSRC and its authorized local securities and futures regulatory authorities (hereinafter referred to as ‘local regulatory authorities') take charge of the supervision and management of the securities and futures investment consultancy business as well as the implementation of the Measures.
 
Chapter II Securities and Futures Investment Consulting Institution
Article 6 Institutions applying for securities and futures investment consultancy qualifications shall meet the following conditions:
(1) The institutions shall be those engaged in securities or futures investment consultancy businesses, and shall have more than five full-time staff members with qualifications for securities and futures investment consultancy; the institutions engaged in both securities and futures investment consultancy businesses shall have more than ten full-time staff with qualifications for securities and futures investment consultancy; and at least one of their senior managerial personnel shall be of the qualification for securities or futures investment consultancy;
(2) The registered capital shall be more than RMB1.00 million;
(3) The fixed business venue and the communications and other information transformation facilities suitable for the business shall be furnished;
(4) The articles of association shall be formulated;
(5) The internal management system shall be complete and sound;
(6) Other conditions required by the CSRC shall be met.
 
Article 7 Securities institutions and futures brokerage institutions shall meet the requirements specified in Article 6 of the Measures before applying for concurrent engagement in securities and futures investment consultancy businesses.
Other consulting institutions engaged in consulting services may apply for concurrent engagement in the securities and futures investment consultancy business if they have met the requirements as specified in Article 6 of the Measures.
 
Article 8 The examination and approval of the securities and futures investment consultancy qualification applied for by the institution will be conducted according to the following procedures:
(1) Applicants may apply to a local regulatory authority (If the local regulatory authority proves to be of no authorization by the CSRC, the applicant can apply to the CSRC directly, and the same applies in the following). The local regulatory authorities put forward their preliminary opinions after their examination and approval of the aforesaid application;
(2) The local regulatory authority shall submit the application documents examined and approved to the CSRC. The CSRC then awards the business license to the applicant and sends a copy of the approval document to the local regulatory authority after it examines and approves the application documents;
(3) The CSRC will publish the information about the applicants, who have obtained the business licenses, by way of a public announcement.
 
Article 9 Institutions which apply for securities and futures investment consultancy qualifications shall submit the following documents:
(1) uniformed application form prepared by the CSRC;
(2) the articles of association of the company;
(3) corporate business license;
(4) list of senior managerial personnel and those engaged in securities and futures investment consultancy businesses, and information of their educational background, work experience as well as their qualification certificates;
(5) the mode adopted to conduct investment consulting businesses as well as the internal management regulations and systems;
(6) certificates for use in business venues as well as the institution's correspondence address, phone number and fax number;
(7) capital appraisal report issued by a competent certified public accountant;
(8) other documents required by the CSRC.
 
Article 10 In case a change occurs in the business mode, business venue, chief person-in-charge and staff with qualifications for securities and futures investment consultancy of the securities and futures investment consulting institution, the institution shall submit a report on the change that has occurred to the local regulatory authority and go through the procedures for the change in 5 working days after the date of change.
 
Article 11 The securities and futures investment consulting institution shall apply, in a period from January 1 to April 20 every year, to the local regulatory authority for annual inspection. The following documents shall be submitted in the handling of the annual inspection:
(1) application for annual inspection;
(2) annual business report;
(3) financial accounting statements audited by a competent certified public accountant.
The local regulatory authority shall work out its opinion on the annual inspection application within 20 working days upon the date of receipt of the above listed documents. The aforesaid application is to be submitted to the CSRC for examination and approval if approved by the local regulatory authority. The securities and futures investment consulting institution, which fails to submit its annual inspection report or fails to pass the annual inspection after the required examination procedure, shall not continue to be engaged in the securities and futures investment consultancy business.
 
Chapter III Securities and Futures Investment Consultants
Article 12 Securities and futures investment consultants are required of securities and futures investment consultancy qualifications and join securities and futures investment consulting institutions with qualifications acquired before being engaged in securities and futures investment consultancy businesses.
No one is allowed to engage in securities and futures investment consultancy business if he or she fails to obtain the securities and futures investment consultancy qualification, or does not have any work experience at a securities and futures investment consulting institution, even though he or she has acquired the qualification.
 
Article 13 Securities and futures investment consultants, who apply for securities and futures investment consultancy qualifications, shall meet the following requirements:
(1) having the Chinese citizenship;
(2) having a full civil capacity;
(3) having a good moral character, integrity, honesty and a good professional ethic;
(4) having no record of criminal sanction or serious administrative penalty in connection with securities and futures business;
(5) having a bachelor degree or higher;
(6) Over 2-year work experience in securities business as required of a securities investment consultant, and over 2-year work experience in futures business as required of a futures investment consultant;
(7) having passed the unified qualification examination for a securities and futures practitioner as organized by the CSRC;
(8) other requirements specified by the CSRC.
 
Article 14 The examination and approval of the securities and futures investment consultancy qualification applied for by the securities and futures investment consultant will be conducted according to the following procedure:
(1) The applicant applies to the local regulatory authority (If the local regulatory authority does not acquire the CSRC's authorization, the applicant can apply to the CSRC directly; the same applies hereunder). The local regulatory authority gives its preliminary examination opinion after examining and approving the aforesaid application;
(2) The local regulatory authority submits the application documents examined and approved to the CSRC. The CSRC awards the business license to the applicant and sends a copy of the approval document to the local regulatory authority after it examines and approves the said application documents.
 
Article 15 Securities and futures investment consultants who apply for securities and futures investment consultancy qualifications shall submit the following documents:
(1) uniformed application form prepared by the CSRC;
(2) ID card;
(3) academic credentials;
(4) academic record of the qualification examination for securities and futures practitioner;
(5) statement about the applicant issued by the applicant's employer or sub-district office where his or her household is registered;
(6) other documents required by the CSRC.
 
Article 16 If those with qualifications for securities and futures investment consultancy intend to apply for practicing, their applications shall be lodged by their securities and futures investment consulting institutions to the local regulatory authorities. The applications shall be submitted to the CSRC for examination and approval after their application documents are approved by the local regulatory authorities. If the applications for practicing are approved, the CSRC shall issue the corresponding certificates.
 
Article 17 Those who have acquired their practicing qualifications for securities and futures investment consultancy shall undergo their annual practicing inspection procedure while their securities and futures investment consulting institutions are taking its annual inspection. Those who have acquired the qualification for securities and futures investment consultancy and who are not practising in a securities and futures investment consulting institution, their qualification will be invalid automatically in 18 months after the day when the qualification is acquired.
 
Article 18 The securities and futures investment consultant should not practise simultaneously in two or more securities and futures investment consulting institutions.
 
Chapter IV Administration of Securities and Futures Investment Consulting Business
Article 19 Securities and futures investment consulting institutions and their investment consultants shall provide investors or clients with securities and futures investment consulting services in an industry-recognized prudent, honest and motivated manner.
 
Article 20 Securities and futures investment consulting institutions and their investment consultants shall provide investors or clients with investment analyses, predictions and suggestions by utilizing the relevant information and materials in a complete, objective and accurate manner, and shall not quote out of context or juggle the relevant information and materials. References and copyright owners shall be indicated in the process of quoting the relevant information and materials.
 
Article 21 Securities and futures investment consulting institutions and their investment consultants shall not provide investors or clients with investment analyses, predictions and suggestions on the basis of false information, market rumors or insider information.
 
Article 22 Securities and futures investment consultants shall indicate the names of their securities and futures investment consulting institutions and their real individual names, and make a full explanation about the investment risks when they publish investment consulting articles, reports or opinions in newspapers, radio stations, TV stations or other media. The institution's name, address, phone number and the contact name shall be indicated in the faxes concerning securities and futures investment consultancy as provided by the securities and futures investment consulting institution for the investors or clients.
 
Article 23 When the securities and futures investment consulting institution cooperates with or assists the newspaper, radio station or TV station in initiating the newspaper page or program concerning securities and futures investment consultancy, or conducts business cooperation with a telecommunications service department, it shall report to the local regulatory authority for file. The materials required for file include the content of the cooperation, time for starting and finishing, the page layout or the term of the program, and the project leader. The above materials shall be sealed by the two parties involved.
 
Article 24 Securities and futures investment consulting institutions and their investment consultants shall not be involved in any of the following activities:
(1) purchase and sale of securities and futures as agents;
(2) promising investors incomes from investment in securities and futures;
(3) agreeing on sharing investment incomes or assuming investment losses with investors;
(4) purchase and sale of shares as well as securities and futures with stock property and function for their own sake;
(5) collaborating, by making use of consulting services, with others to manipulate market or make insider deals;
(6) other securities and futures frauds prohibited by laws, regulations and rules.
 
Article 25 The investment analyses, predictions or suggestions on the same issue provided by the securities and futures investment consulting institution for different clients shall be identical.
The securities institution, which has its self-operation business, shall provide the same consulting opinion on the same issue for the social public and its self-operating department when engaged in a securities investment consulting business beyond its business scope, and shall not misguide the social public for the interests of its self-operating business.
 
Article 26 The briefing, expressing, updating and information system concerning the securities and futures information compiled and published by the securities institution and futures brokerage institution for internal use can only be used within the institution, and shall not be provided for the social public through any channel.
Underwriters or listing sponsors of companies publicly issuing shares upon the approval by the CSRC and their securities investment consulting institutions shall not publish their analysis reports prepared by them on investment value for their clients on public media.
 
Article 27 The CSRC and its local regulatory authorities are entitled to inspect the business activities of securities and futures investment consulting institutions and investment consultants. The inspected securities and futures investment consulting institutions and their investment consultants shall cooperate, and shall not disturb and hinder the inspection.
The CSRC, its local regulatory authorities and their staff shall see to the protection of the business secrets involved in their business inspection.
 
Article 28 Securities and futures investment consulting institutions shall keep the investment consulting materials provided by them for investors or social public for two years beginning from the data provided.
 
Article 29 Local regulatory authorities are entitled to request the securities and futures investment consulting institutions and its investment consultants to make explanations and provide the relevant materials according to the complaints or accusations lodged by investors or the social public.
 
Article 30 Organizations and individuals can complain about and accuse of the violations against the Measures by securities and futures investment consulting institutions, investment consultants or other institutions and individuals to the local regulatory authorities.
 
Article 31 Local regulatory authorities shall place a case concerning the violation against the Measures on file for investigation, and report the investigation result to the CSRC for record.
 
Chapter V Penalty Provisions
Article 32 Any engagement in the securities and futures investment consulting business specified in Article 2 of the Measures without permission of the CSRC will be stopped by the local regulatory authority, with the illegal income confiscated and the fine imposed on the basis of the amount less than that of the illegal income.
 
Article 33 The securities and futures investment consulting institution, which has committed any of the following, will be awarded a penalty of the amount in-between RMB10,000 and RMB50,000 by the local regulatory authority. If the case is serious, the local regulatory authority shall report it to the CSRC, which will penalize the institution concerned with the suspension or revoke of its business qualification.
(I) There is a false statement or a major omission found in the documents and materials submitted to the securities regulatory authority;
(II) The obligations of reporting and annual inspection are not able to be fulfilled according to the provisions of the Measures;
(III) The institution has failed to complete the procedures for change as required by the provisions of the Measures;
(IV) The institution's securities and futures investment consultants are imposed with administrative penalty by the securities regulatory authority due to their violation acts against the Measures;
(V) The institution has disturbed and hindered the inspection and investigation carried out by the local regulatory authority, or has hidden and destroyed evidences.
 
Article 34 If the securities and futures investment consulting institution has violated the provisions specified in Articles 18, 19, 20, 21, 22, 23, 24, 25 and 28 of the Measures, it will be imposed with a warning, confiscation of illegal income and a fine of an amount in-between RMB10,000 and RMB100,000 by the local regulatory authority separately or simultaneously. If the case is serious, the local regulatory authority shall report it to the CSRC, which will penalize the institution concerned with the suspension or revoke of its business qualification. Criminal responsibility will be pursued according to law if a crime is constituted.
 
Article 35 The securities institution and the futures brokerage institution will be ordered to make rectifications and imposed with a warning or a fine in-between RMB10,000 and RMB50,000 by the local regulatory authority if they have violated the provisions of Article 26 of the Measures.
 
Article 36 The securities and futures investment consultants will be imposed with warning, confiscation of illegal income and fine in-between RMB10,000 and RMB30,000 by the local regulatory authority separately or simultaneously if they violate the provisions specified in Articles 18, 19, 20, 21, 22 and 24 of the Measures, or fail to fulfill their reporting and annual inspection obligations to the securities regulatory authority according to the provisions of the Measures. If the case is serious, the local regulatory authority shall report it to the CSRC, which will penalize the institution concerned with the suspension or revoke of its business qualification. Criminal responsibilities will be pursued according to law if a crime is constituted.
 
Article 37 Criminal responsibilities will be investigated into according to law if the neglect of duties, abuse of powers and illegality for personal gains carried out by the staff of the CSRC and its local regulatory authorities have constituted crimes. Administrative penalty will be imposed if no crime is constituted.
 
Chapter VI Supplementary Provision
Article 38 The Measures shall take effect commencing on April 1, 1998.