CAPÍTULO 11: ESTADO ACTUAL DEL DESARROLLO Y DEL
2.1 OCUPACIÓN DEL TERRITORIO
1. Securities Association of China
The Securities Association of China (SAC), established on 28 August 1991, is a non-profit self-regulatory organization with a legal person status subject to the guidance, supervision and administration of the CSRC and the Ministry of Civil Affairs.
The highest authority of the SAC is its general assembly of members, and the board of governors is its executive body. As of the end of 2006, the SAC had 299 members, including 112 securities companies, 48 securities investment fund management companies, 3 financial assets management companies, and 92 securities investment consulting agencies in addition to 44 special members.
The SAC shall perform the following functions:
z to educate its members and ensure the enforcement of laws and regulations governing securities
z to safeguard the legitimate rights and interests of members and report to the CSRC about suggestions and requests of members;
z to collect and process securities information in order to service members;
z to formulate rules governing its members, organize professional trainings and facilitate exchange of ideas among members;
z to mediate in the event of disputes between members or between members and their clients;
z to organize researches and surveys on the development and operation of securities industry;
z to supervise and inspect members’ professional conduct and impose disciplinary sanctions on any member that violates articles of association and self-regulatory rules;
z to promote international cooperation and exchanges in the securities industry;
z to undertake some responsibilities empowered by the CSRC: i) to facilitate the industry innovations and compliance, and organize the selection of innovation-type securities companies; ii) to mange the professional qualification system, and organize the qualification exams for securities professionals; iii) to keep a record of sponsors in underwriting business and the ex ante filing of membership-based securities investment consulting business ; iv) to supervise members’ information disclosure; v) to promote the standardization, communication and training in the field of securities
information technology; vi) to supervise and manage the Share Transfer System.
2. Stock Exchanges
The Securities Law and Administration Measures on Stock Exchanges define a stock
exchange as a self-regulatory legal person entity that provides the site and facilities for centralized securities trading and supervises the trading activities. At present, there are two stock exchanges in China, both Shanghai and Shenzhen Stock Exchanges are under the supervision of the CSRC. Each stock exchange has a general assembly of members and board of governors. The former is the highest authority while the board of governors is the executive body with Chairman and Vice Chairman nominated by the CSRC subject to election by the board. Besides, the president of each exchange is appointed by the CSRC.
The major functions of a stock exchange include:
z providing the site and facilities for securities trading;
z formulating business rules;
z accepting listing applications and arranging listing issues;
z organizing and supervising the activities of securities trading;
z supervising the conduct of the members and listed companies;
z managing and disclosing market information; and
z other functions permitted by the CSRC.
According to the Measures on the Administration of Stock Exchanges, a stock
exchange shall monitorsecurities trading activities as follows:
z formulating detailed trading rules;
z publishing the real-time quotations and daily charts;
z compiling and circulating transaction data in a timely manner;
z ensuring investors an equal opportunity to trade and an equal access to market trading information;
z suspending or resuming the trading of listed securities;
z restricting or prohibiting the trading of specific securities investors;
z dealing with any violation of the business rules immediately;
z establishing a computer system capable of market supervision and real-time monitoring; and
z setting up a specific unit for market surveillance.
follows:
z formulating specific rules governing its members;
z exercising stringent administration over the trading seats of members;
z supervising its members’ proprietary business (such as monitoring its members to use designated stock accounts and fund accounts with the help of technical means; requesting members to report monthly securities inventory before the 5th of the following month; adopting specific risk control measures over proprietary trading, etc.);
z supervising its members’ brokerage business (such as drafting the format of a brokerage agreement between a member and its clients and verifying its contents; providing for its members the procedures and responsibilities in accepting a client’s orders and selectively inspecting its members’ compliance periodically; requesting its members to report their monthly brokerage business and clients' complaints before the 5th of the following month, etc);
z selectively or extensively inspecting its members' financial conditions, internal risk control system and compliance with the exchange rules, and reporting the results to the CSRC; and
z imposing sanctions against the violating members.
According to the Measures,a stock exchange shall monitor companieslisted at its marketplace as below:
z formulating specific listing rules for different types of securities;
z signing listing agreements with listed companies clarifying respective rights and obligations;
z supervising the listing sponsors who ensure the listed companies to meet all listing requirements and guide them to fulfill their post-listing reporting obligations;
z reviewing the rights issue statement, listing announcement and other public documents, and ensuring the listed companies to publish the above documents in a timely manner;
z urging the listed companies to publish their annual reports and interim reports pursuant to the timeframe and the uniform format set by the CSRC, and keeping on monitoring after their disclosures;
z examining and verifying ad hoc reports submitted by the listed companies;
z suspending the trading of the shares of a listed company under certain circumstances (e.g. i. abnormal fluctuations occur in the share trading of the said company; ii. one or more investors offer to acquire the shares of the said company; iii. the listed company itself requests for the suspension pursuant to its listing agreement; iv. when a stock exchange deems necessary, etc.);
z keeping a record of the shareholding structures of listed companies, compiling accurate statistics on the changes of shareholdings and overseeing the changes;
z
punishing a listed company’s failure to fulfill the information disclosure obligation, and if necessary, referring the listed company to the CSRC with proposed penalties.i．Shanghai Stock Exchange (SHSE)
The Shanghai Stock Exchange (SHSE) was founded on November 26, 1990. As of December 2006, a total of 842 companies with 886 equities were listed at the SHSE; and the total market capitalization amounted to RMB 7,161 billion. In terms of membership, the SHSE had 151 members, including 138 domestic securities firms, 13 trust and investment companies and 3 overseas special members. In addition, special B-share trading seats had been granted to 46 overseas securities companies. The SHSE has 16 departments in charge of office administration, trading management, listed companies, market surveillance, member supervision, bonds & funds, legal affairs, IT, research, etc. and two subsidiaries20 . The SHSE is running an advanced trading system capable of handling 16,000 transactions per second. Please refer to Figure 2-7 for Shanghai Composite Index movements.
Figure 2-7 Shanghai Composite Index（1991—2006）
91 92 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 Price CNY 300 600 900 1200 1500 1800 2100 2400 2700 0 Year Source：Reuters
ii．Shenzhen Stock Exchange (SZSE)
Shenzhen Stock Exchange (SZSE) was established on December 1, 1990 as a non-profit membership institution. On May 27, 2004, the Small and Medium Enterprises (SME) Segment was launched at the SZSE, which observes the same IPO criteria as other segments of the main board. The SME Segment provides a direct financing platform for hi-tech or rapidly growing small and medium enterprises with competitive core businesses.
As of the end of 2006, a total of 579 companies with 621 equities were listed in the SZSE, including 102 companies listed in SME Segment; and the total market capitalization reached RMB 1,779.2 billion. Among its 176members, there were 141 domestic securities firms or equivalent, 32 domestic companies concurrently providing certain securities services and 3 overseas special members. Additionally, 19 overseas securities companies had special B-share trading seats at the SZSE. The SZSE also has 16 departments in charge of market surveillance, member supervision, fund & bond and so on as well as 5 subsidiaries21.
The daily capacity of its trading system stands at 20 million trades with a double backup system. A comprehensive and highly computerized forefront surveillance system has been put in place in order to detect, terminate and punish wrongdoings in a timely manner. The SZSE has also set up an extensive information network on market data and listed company news, which ensures the timely dissemination of market information. Please refer to Figure 2-8 for Shenzhen Component Index movements.
Figure 2-8 Shenzhen Component Index（1995--2006）
95 96 97 98 99 2000 01 02 03 04 05 06 07 Price CNY 1000 2000 3000 4000 5000 6000 7000 8000 0 Year
21 Five subsidiaries include Research Center, Securities Satellite Co., Ltd., Securities Information Co., Ltd., etc. For more information, please refer to the website (http://www.sse.org.cn/main/en/Catalog_1377.aspx).