Opinions of the General Office of the State Council on Further Strengthening the Protection of Small and Medium Investors' Legitimate Interests in the Capital Market
Opinions of the General Office of the State Council on Further Strengthening the Protection of Small and Medium Investors' Legitimate Interests in the Capital Market
Opinions of the General Office of the State Council on Further Strengthening the Protection of Small and Medium Investors' Legitimate Interests in the Capital Market
Guo Ban Fa [2013] No.110
December 25, 2013
The people's governments of all provinces, autonomous regions and municipalities directly under the Central Government, the ministries and commissions of the State Council and all institutions directly under the State Council,
Presently, small and medium investors are major participants of China's capital market. Nevertheless, they take a disadvantageous position in terms of information, anti-risk ability and self-protection, and their legitimate interests are liable to infringement. To safeguard the legitimate interests of small and medium investors is the focus of securities and futures supervision, which is related to the immediate interests of the broad masses as well as serves as the basis for the sustained and sound development of the capital market. Although China's small and medium investors protection has made remarkable progress in recent years, there is still a long way to go to satisfy the requirements in respect of maintaining an "open, equitable and fair" market and protecting the legitimate interests of small and medium investors. The following Opinions are hereby offered under the approval of the State Council, with a view to implementing the intention of the Eighteenth National Congresses of the Party and the Third Plenary Session of the Eighteenth CPC Central Committee, and further strengthening the protection of the legitimate interests of small and medium investors on the capital market.
Article 1 Improving the investor suitability system
To set up and improve small and medium investors classification standards. Efforts shall be made to set up and issue small and medium investors classification standards and basis, carry out a dynamic evaluation of and adjustment to the same based on the actual situations of China's capital market, and further standardize the arrangement in respect of investor suitability for various market levels and transactions, to specify the scope and means for the participation by investors.
To divide risk levels in a scientific way. Institutions and intermediaries engaging in securities and futures trading shall assess and classify risks in respect of products or services, recommend investors the products or services which are proportionate to their ability to bear and identify related risks, and disclose to investors in detail the information which may affect their rights. No misleading or fraudulent information shall be provided for clients.
To further improve rules and regulations and market service rules. Institutions and intermediaries engaging in securities and futures trading shall set up practice regulations and internal accountability mechanisms to specify that sales personnel shall not, in his own name, accept any client's commission for transaction. The institutions and intermediaries shall also procure investors to provide true data and information, keep any personal information in strict confidence, and ensure information safety. The institutions and intermediaries are not allowed to illegally sell to or provide any person with such information. The institutions and intermediaries shall also strictly implement the investor suitability system, strengthen supervision and shall be held liable according to the law if they violate the requirements on suitability which causes loss to small and medium investors.
Article 2 Optimizing the investment return mechanism
To guide and support listed companies to strengthen their ability in paying returns. Listed companies shall improve their corporate governance, boast their profitability, and proactively offer returns to investors. With regard to IPO or the dilution of returns for the current term due to refinancing by listed companies, the listed companies shall formulate specific measures for making up for related returns.
To improve the profit distribution system.
......