The Securities Association of China ("SAC") has recently issued the Standards for Self-regulation and Services of Regional Equity Markets (for Trial Implementation) (the "Standards"), immediately effectively from the issue date.
The Standards expressly state that, an institution legally established to operate the regional equity market may join the SAC to become its special member and shall receive the self-regulation and services. A securities company or its subsidiary may participate in the regional equity market by various means, including by investing in a regional equity market operator or by carrying out business relating to the regional equity market. According to the Standards, such an operator shall follow rules in six aspects, including "actively serving development strategies of the State, fulfilling social responsibilities and rendering services regarding the guidance in system transformation and management training to micro-, small- and medium-sized enterprises in accordance with laws and regulations". In addition, the Standards note that, a securities company may carry out eleven types of business in the regional equity market, including "recommending enterprises to get listed in such market". Where a securities company becomes a shareholder of a regional equity market operator, it shall take necessary measures to separate its own business from that of the regional equity market operator and shall not take advantage of its capacity as the shareholder to seek any unjustified interests.