中华人民共和国证券法（二）

ement rules and standardized classified management systems for self-operated business and brokerage business.

　　Article 122 The minimum registered capital of a securities brokerage company shall be RMB 50 million Yuan; its main administrators and business personnel must have qualifications for the securities profession; it has a fixed business site and qualified trading facilities; and it has sound and complete management rules.

　　Article 123 Establishment or withdrawal of branch(es), change in business scope or registered capital, change in articles of association, amalgamation, separation, change in the form of the company or disbandment of a security company must be subject to the approval of the securities supervision and administration institution under the State Council.

　　Article 124 The total amount of external liabilities of a security company must not exceed the prescribed multiple(times) of its amount of net assets; its total amount of floating liabilities must not exceed a certain percentage of the total amount of its floating assets; its specific multiple(times), percentage and control measures shall be worked out by the securities supervision and administration institution under the State Council.

　　Article 125 Whoever has the circumstance prescribed in Article 57 of the Company Law or any of the following circumstances shall not serve as a director, a commissioner or a manager of a security company:

　　(1)the person-in-charge of a securities exchange or a securities registration and settlement agency of a director, or a commissioner, or a manger of a security company who was relieved of the post for illegal acts or acts of violation of discipline for not more than 5 years starting from the date of relief of the post; and

　　(2)a lawyer, a chartered accountant or specialized personnel of legal asset assessment agency or authentication agency whose qualification was revoked for illegal acts or acts of violation of discipline for not more than 5 years starting from the date of revocation of the qualification.

　　Article 126 Employees of securities exchanges, securiti

es registration and settlement agencies and security companies and functionaries of state organs dismissed for illegal acts or acts of violation of discipline must not be employed as employees of security companies.

　　Article 127 Functionaries of state organs and other personnel whose holding of concurrent posts in companies is prohibited by provisions of laws and administrative regulations must not take up concurrent positions in security companies.

　　Directors, commissioners, managers and business personnel of a security company must not take up concurrent positions in other security companies.

　　Article 128 Security companies shall withdraw trading risk reserve from the yearly after-tax profit for making up the losses in securities trading, specific percentage of the withdrawal shall be fixed by the securities supervision and administration institution under the State Council.

　　Article 129 An integrated security company may operate the following securities businesses:

　　(1)securities brokerage business;

　　(2)self-operated securities business;

　　(3)securities underwriting business; and

　　(4)other securities businesses verified and determined by the securities supervision and administration institution under the State Council.

　　Article 130 A securities brokerage company shall be permitted to specialize in securities brokerage business only.

　　Article 131 A security company should, pursuant to the business prescribed in the two preceding Articles, file a business scope application which shall be verified and determined by the securities supervision and administration institution under the State Council.

　　A security company must not operate securities businesses and other businesses beyond the verified and determined business scope.

　　Article 132 An integrated security company must handle its brokerage business and self-operated business separately, the business personnel and financial accounts should also be separated, and there must be no mixed operations.

　　The transaction settlement funds of clients must be deposited in full in a designated commercial bank and a separate account be opened for management. Diversion of clients' transaction settlement funds to other purposes shall be strictly prohibited.

　　Article 133 Bank funds shall be prohibited from flowing into stock markets in violation of regulations.

　　A security company must use its own funds and funds raised according to law in its self-operated business.

　　Article 134 The self-operated business of a security company must be conducted in its own name and must not be conducted under the cloak of other's name or in the name of an individual.

　　A security company must not lend its self-operations account to others for use.

　　Article 135 A security company has the right to autonomous management according to law, its lawful management shall be free from intervention.

　　Article 136 A security company whose registered capital is lower than that required for corresponding business prescribed by this Law shall be revoked of the verification and determination of its relevant business scope by the securities supervision and administration institution under the State Council.

　　Article 137 A security company engaging in intermediary business, buying and selling securities for clients as an agent in securities trading shall be a securities broker with legal personality.

　　Article 138 A security company must, in handling brokerage business, open separate securities accounts and fund accounts for clients and manage the securities and funds delivered by the clients on separate ledgers according to each account, make truthful records on transactions and must not make false records.

　　A client opening an account must hold lawful certification proving the identity of Chinese citizenship or Chinese legal person

ality.

　　Article 139 A security company should, in handling brokerage business, prepare and place the uniformly printed letters of authority for buying and selling of securities for use by clients. Records on clientage must be made for the adoption of other forms of clientage.

　　For authority by clients for buying and selling of securities, whether a transaction has been concluded or not, the record on its authority should be deposited at the security company in accordance with the specified time period.

　　Article 140 A security company that accepts the entrustment of buying and selling of securities should buy and sell securities by proxy according to the trading rules on the basis of the names of the securities, amount of buying and selling, mode of offer price and price range; a report slip on the conclusion of buying and selling shall be prepared according to rules and handed over to the client on the conclusion of the buying and selling. The reconciliation sheet confirming the trading acts and its trading results in securities trading must be truthful and shall be examined and verified by an auditor other than the consigner case by case to ensure the consistency of the balance of securities in book account and the securities in actual possession.

　　Article 141 A security company that accepts entrustment to sell securities must be the securities actually in the securities account of a client and must not make an accommodation in securities trading for the client.

　　A security company that accepts entrustment to buy in securities must effect payment with the fund actually in the fund account of a client and must not arrange financing in trading for the client.

　　Article 142 A security company that handles brokerage business must not accept carte blanches of a client and decide the buying and selling of securities, select types of securities and decide the quantity of buying and selling or price of buying and selling.

　　Article 143 A security company must not in any form make a commitment to a client on the returns of buying and selling of securities or compensation for the losses in buying and selling of securities.

　　Article 144 A security company and its employees must not accept the entrustment of a client to buy and sell securities in private without going through the location of business established according to law.

　　Article 145 For an employee of a security company who violates trading rules in securities trading operations according to the directive of the security company to which he/she belongs or by taking advantage of his/her position, the security company to which he/she belongs shall bear full responsibility.

　　Chapter VII Securities Registration and Settlement Agencies

　　Article 146 A securities registration and settlement agency provides centralized services in registration, trust and settlement for security transactions and constitutes a legal entity with no purpose of profit-making.

　　Establishment of a securities registration and settlement agency must be subject to the approval of the securities supervision and administration institution under the State Council.

　　Article 147 Establishment of a securities registration and settlement agency should have the following qualifications:

　　(1)its own capital shall be not less than RMB 200 million Yuan;

　　(2)it has a location and facilities necessary for securities registration, trust and settlement services;

　　(3)its main administrators and business personnel must have employment qualification for securities business; and

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