The securities firm should sign entrustment contracts with securities brokers who accept such entrustment, issue securities broker certificate, define authorized scope of securities broker and supervise working behavior of securities broker.

Securities brokers should work within authorized scope of the securities firm and show securities broker certificates to customer.

1 Customers purchase of securities, settlement of securities trading or customers withdrawal

Article 44 If a securities firm is engaged in self run securities business, its risk controlling indicators such as ratio of total securities value and company net capital, ratio of value of one type of securities and net corporate capital, and ratio of quantity of one type of securities and total issuing quantity of this type of securities should comply with prescription of the securities regulatory agency under the State Council.

Article 32 A securities firm should establish information inquiring system to ensure customers inquiring entrustment record, trading record, securities and balance during business hours of the securities firm, as well as other information such as name, practice license of the business operator and securities broker of the securities firm, certificate number of securities broker, etc.

Article 41 A securities firm engaged in securities business for its own account is limited to trading of legally issued stocks, bonds, warrants, securities investment funds or other securities recognized by the securities regulatory agency under the State Council.

Without securities business license, the securities firm and its domestic branch shall not run securities business.

The securities broker should have securities working qualification.

1 Illegally buying securities issued by shareholder of the securities firm or other issuer with major relationship to securities firm against regulation

Article 26 If a securities firm and its domestic branch are engaged in securities business prescribed in Article 125 of the Securities Law, they should follow the Securities Law and provisions of this Regulation.

Article 20 If a securities firm has two or more kinds of securities brokerage business, securities assets management business, financing with capital and securities, securities underwriting, securities sponsors, its board should set up remuneration and nomination committee, auditing committee and risk control committee to perform rights prescribed in company regulation.

Article 38 If a securities firm is engaged in securities brokerage business, it can entrust staff outside of the securities firm as securities broker, engaging in attracting and providing service for customers as agent.

Article 56 Where a securities firm carries out securities lending and borrowing but does not have sufficient funds or securities, it can borrow from the securities financial companies.

Article 50 A securities firm that carries out securities lending and borrowing business shall sign a securities lending and borrowing contract with the customer, and shall open a customer securities guarantee account with the securities registration and settlement organs, and a customer funds guarantee account with the designated commercial bank in the name of the securities firm in accordance with the provisions of the securities regulatory agency under the State Council.

3 Trade securities or maneuver securities market with insider information

(5) Securities service agencies provided services for a securities firm.

Article 28 When the securities firm is entrusted by securities registration settlement agency to open securities account for customers, it should audit name and identity authenticity declared by customers according to management rule of securities account.

Securities brokers shall not handle securities subscription or trading for customers.

The securities regulatory agency under the State Council can enquire the bank accounts of a securities firm and enterprises controlled or actually controlled by the securities firm with approval of a person responsible of the securities regulatory agency under the State Council with a view to make a thorough investigation of business and financial status of the securities firm.

Securities brokers can only accept entrustment of one securities firm for customer attracting and service activities.

Article 61 The securities firm shall not provide financing or warranty to other people using the assets of the securities brokerage customers or securities assets management customers.

Article 96 The securities registration and clearing agency hereof refers to the securities registration and clearing agency prescribed in Article 155 of the Securities Law of the People s Republic of China.

It seems clear that tapering the Fed s monthly purchases of long term securities later this year would cause a realignment of asset values in financial markets. How this spills over into the real economy is yet another source of uncertainty.

Article 29 The securities firm that is engaged in securities assets management business, capital and securities financing business, securities related finance product sales should get knowledge of identity, property, income status, securities investment experience and risk preference of customers according to prescribed procedure, and record as well as keep the information in written or electronic form.

Article 48 Securities lending and borrowing referred to in this article means that in the securities trading at the stock exchange or other securities trading places that have been approved by the State Council, securities firms lend capital or securities to customers for them to buy or sell securities based on the corresponding collaterals provided by the customers.

The securities business license should be written with business scope of such securities firm or its domestic branch.

(4) Where any securities broker accepts entrustments of clients to handle such issues as securities subscription and trading.

Securities account opened by the securities firm for securities assets management customer should be submitted to stock exchange for filing within 3 trading days.

A securities firm mentioned in item 1 of this article refers to an unincorporated entity with business operation under the securities firm such as branch company and securities business outlet.

Article 3 Shareholders and actual controllers of securities firms shall not abuse their rights, occupy assets of the securities firm or customers, or impair the legal rights of the securities firm or its customers.

Other shareholders of securities firms should comply with the related requirements of the securities regulatory agency under the State Council.

The choice to save the banks from the financial consequences of their own errors indicates a shift in values away from belief in the wisdom of the market. Evidently, the market got some things like the value of certain financial securities horrendously wrong.

No units or individuals shall force, incite, assist or accept the securities firm to provide financing or warranty with the assets of the securities brokerage customers or securities assets management customers.

The securities firm shall not provide customer s capital account and securities account to others.

While the securities regulatory agency under the State Council approving setting up application of securities firm and its branch, it should consider the needs of development as well as fair competition of the securities market.

If the securities firm closes all securities business, disbands, goes bankruptcy or revokes domestic branch, it should publicize in newspaper appointed by the securities regulatory agency under the State Council and submit securities business license to the securities regulatory agency under the State Council for deregistration based on regulation.

(ii) Securities Act

(3) Where a securities firm, an asset management agency, a securities registration and clearing agency use trading settlement funds, trust funds and funds and securities in secured accounts of clients in violation of provisions

Article 37 If a securities firm is engaged in securities brokerage business, it should audit whether capital and securities in customer s account are sufficient or not.

The deposit given by the customer, all the securities that have been purchased through securities lending and borrowing, and all the funds from the sales of securities are collaterals to the securities firm, and shall be deposit to the customer securities guarantee account or the customer funds guarantee account and credited to the customer s credit granting account.

The legal responsibility of his behavior within authorized scope of the securities firm should be taken by the securities firm and the legal responsibility of any behavior outside authorized scope should be taken by securities brokers.

The hearings also led to passage of the Securities Act of 1933 and the Securities Exchange Act of 1934. Securities issuers and traders were required to release more information, and were subjected to higher transparency standards.

(3) Where a securities firm violates provisions to entrust others to buy and sell securities

(4) Deposit banks, designated commercial banks, asset management agencies, security exchanges, securities registration and clearing agencies of a securities firm

Capital contribution from shareholder of securities firms should be verified with evidence by accounting firm with related qualification of securities and futures the nonmonetary property should be evaluated by assets evaluation agency with securities related qualification.