Article 121： If persons engaged in securities trading inside a stock exchange violate the trading rules of the stock exchange， the stock exchange shall take disciplinary actions. If the circumstances are serious， the offenders‘ qualifications shall be revoked and they shall be barred from entering the exchange to carry out securities trading.

　　PART SIX： SECURITIES COMPANIES

　　Article 122： Establishment of securities companies must be examined and approved by the State Council‘s securities regulatory authority. No work unit or individual may engage in securities business without the approval of the State Council’s securities regulatory authority.

　　Article 123： For the purposes of this Law， the term “securities companies” shall mean limited liability companies or companies limited by shares that have been established pursuant to the provisions of the PRC， Company Law and this Law and that engage in securities business.

　　Article 124： To establish a securities company， the following conditions shall be fulfilled：

　　the articles of association of the company shall comply with the provisions of laws and administrative regulations；the major shareholders shall have the ability to maintain continuous profitability， a good reputation， no record of major violation of laws or regulations within the most recent three years， and net assets of not less than Rmb 200 million；have a registered capital that complies with the provisions hereof；the directors， supervisors and senior management personnel shall have employment qualifications， and the employees shall have securities business qualifications；have a sound risk management and internal control system；have up-to-standard business premises and business facilities； and other conditions stipulated in the provisions of laws and administrative regulations and by the State Council‘s securities regulatory authority that have been approved by the State Council. Article 125： Securities companies may engage in all or some of the following securities businesses upon approval of the State Council’s securities regulatory authority：

　　securities brokerage；securities investment consultancy；financial consultancy related to securities trading and securities investment activities；securities distribution and sponsoring；securities business on own account；securities asset management； and other securities businesses. Article 126： Securities companies must include the words “securities limited liability company” or “securities company limited by shares” in their names.

　　Article 127： Where a securities company engages in businesses specified in Items （1） to （3） of Article 125 hereof， its minimum registered capital shall be Rmb 50 million； where it engages in any of the businesses specified in Items （4） to （7）， its minimum registered capital shall be Rmb 100 million； where it engages in two or more businesses specified in Items （4） to （7）， its minimum registered capital shall be Rmb 500 million. The registered capital of securities companies shall be paid-up capital.

　　The State Council‘s securities regulatory authority may， according to the principles of prudential regulation and the risk levels of the various types of businesses， adjust the minimum registered capital provided that it is not less than the amount stipulated in the preceding paragraph.

　　Article 128： The State Council‘s securities regulatory authority shall， within six months of the date of acceptance of an application for establishment of a securities company， carry out examination according to the statutory conditions and the statutory procedures， and the principles of prudential regulation， make a decision on whether or not to grant approval， and notify the applicant thereof. Where approval is not granted， the reasons therefor shall be stated.

　　Where an application for establishment of a securities company is approved， the applicant shall apply to the company registry for establishment registration within the stipulated time limit and obtain a business licence.

　　The securities company shall， within 15 days of obtaining a business licence， apply to the State Council‘s securities regulatory authority for a permit for operating securities business. Where it has not obtained such permit， the securities company may not engage in securities business.

　　Article 129： The establishment， take over or closure of branches， change in the scope of business or registered capital， change in a shareholder that holds 5% or more of the equity or the de facto controlling person， change in the major clauses in the articles of association of the company， and the merger， division， change in corporate form， termination of operation， dissolution or bankruptcy of securities companies must be approved by the State Council‘s securities regulatory authority.

　　The establishment of， take over of or equity participation in securities business organizations overseas of securities companies must be approved by the State Council‘s securities regulatory authority.

　　Article 130： Risk control indices of securities companies such as net assets， ratio of net capital to liability， ratio of net capital to net assets， ratios of business scale such as the respective ratios of net capital to business on own account， distribution and asset management， ratio of liability and net assets， as well as ratio of liquid assets to liquid liability， etc.， shall be stipulated by the State Council‘s securities regulatory authority. Securities companies may not provide financing or security to their shareholders or the related parties of their shareholders.

　　Article 131： Directors， supervisors and senior management personnel of securities companies shall be honest， be of good conduct， familiar with securities laws and administrative regulations， have the operation and management capability required for performance of duties， and have obtained the employment qualifications verified and approved by the State Council‘s securities regulatory authority prior to employment.

　　The persons described in Article 147 of the PRC， Company Law and the following persons may not serve as the directors， supervisors or senior management personnel of securities companies：

　　responsible persons of stock exchanges or securities registration and clearing institutions， and directors， supervisors and senior management personnel of securities companies， who were removed from office due to a violation of the law or a breach of discipline， where not more than five years has elapsed since the date of their removal from office； and lawyers， certified public accountants， and professional personnel of investment consultancy organizations， financial consultancy organizations， credit rating organizations， asset valuation organizations or verification organizations， whose qualifications were cancelled due to a violation of the law or a breach of discipline， where not more than five years has elapsed since the date of cancellation. Article 132： Working personnel of stock exchanges， securities registration and clearing institutions， securities service organizations or securities companies that were dismissed for violating the law or breaching discipline， and working personnel of State authorities who were dismissed， may not be employed as working personnel of securities companies.

　　Article 133： Working personnel of State authorities， and other persons prohibited by laws and administrative regulations from concurrently holding positions in companies， may not concurrently hold positions in securities companies.

　　Article 134： The State establishes securities investor protection fund. The securities investor protection fund shall comprise funds paid by securities companies and funds collected by other means according to law. The specific procedures on its collection， administration and use shall be stipulated by the State Council.

　　Article 135： Securities companies shall make allocations to a trading risk reserve from their annual after-tax profits. The reserve shall be used to make up losses from securities trading. The specific allocation percentage shall be specified by the State Council‘s securities regulatory authority.

　　Article 136： Securities companies shall establish a sound internal control system， adopt valid segregation measures， and safeguard against the conflict of interest between the company and the clients and between clients.

　　Securities companies must handle their securities brokerage business， securities distribution business， securities business operated on their own account and securities asset management business separately.

　　Article 137： Business on the own account of securities companies must be conducted in their own names. Such business may not be conducted in the name of another or in the name of an individual.

　　When carrying out business on own account， securities companies must use their own funds and/or funds that they have raised according to law.

　　No securities company may lend its account for business carried out on own account to another for use.

　　Article 138： Securities companies shall have the lawful right to operate independently， and their lawful operations shall not be interfered with.

　　Article 139： The clients‘ transaction clearing funds of a securities company shall be deposited with a commercial bank， and shall be managed as individual accounts in the name of each client. The specific procedures and implementing steps shall be stipulated by the State Council.

　　Securities companies may not include their clients‘ transaction clearing funds and securities as their own property. All work units and individuals are forbidden to misappropriate a client’s transaction clearing funds and securities in any form. When a securities company is bankrupt or undergoes liquidation， the clients‘ transaction clearing funds and securities shall not fall under its bankrupt or liquidation property. Unless for the debts of the clients or in other circumstances stipulated by law， the clients’ transaction clearing funds and securities may not be sealed up， frozen， deducted or subject to enforcement.

　　Article 140： When handling brokerage business， securities companies shall make available uniform printed securities sale and purchase instruction forms for use by instructing parties. If instructions are given in other ways， a record must be kept thereof.

　　The records of clients‘ instructions to purchase or sell securities shall be kept by the securities company for the prescribed period， irrespective of whether or not any transactions are concluded.

　　Article 141： When a securities company accepts an instruction to purchase or sell securities， it shall purchase or sell securities as an agent in accordance with the trading rules and on the basis of the description of the securities， the purchase or sales quantity， the method of bidding， the price range， etc. set forth in the instruction form， and make a transaction record truthfully. After the transaction has been concluded， a transaction report shall be drawn up according to regulations and delivered to the client.

　　Account statements confirming trading acts and their transaction results which are drawn up in the course of securities trading must be truthful. Such statements shall be verified on a transaction by transaction basis by an examiner other than the person handling the transaction， in order to ensure that the book securities balance is the same as the number of securities actually held.

　　Article 142： Engagement in trading on the margin and short sale of securities for clients by securities companies shall be handled according to the regulations of the State Council and approved by the State Council‘s securities regulatory authority.

　　Article 143： When handling brokerage business， securities companies may not accept a discretionary order of clients to decide on the purchase or sale of securities， choose the types of securities or decide on the quantities to be purchased or sold or the purchase or sales price.

　　Article 144： Securities companies may not give any form of commitment to clients concerning earnings from the purchase or sale of securities or compensation for losses from the purchase or sale of securities.

　　Article 145： Securities companies and their working personnel may not privately accept instructions from a client to purchase or sell securities that has not gone through the company‘s place of business established according to law.

　　Article 146： If， in the course of securities trading activities， a member of the working personnel of a securities company violates the trading rules on the instructions of his securities company or by manipulating his position， the securities company to which such person belongs shall bear full liability therefor.

　　Article 147： Securities companies shall properly keep the account details， entrustment records， transaction records of their clients， and various information related to internal management and business operation. No one may conceal， forge， alter or destroy such information. The aforementioned information shall be kept for a period of not less than 20 years.

　　Article 148： Securities companies shall submit business management information and materials such as business and financial information to the State Council‘s securities regulatory authority according to regulations. The State Council’s securities regulatory authority shall have the right to request securities companies and their shareholders， de facto controlling persons to provide the relevant information and materials within the stipulated time limit.

　　The information and materials submitted or provided by securities companies and their shareholders， de facto controlling persons to the State Council‘s securities regulatory authority must be truthful， accurate and complete.

　　Article 149： Where the State Council‘s securities regulatory authority deems necessary， it may appoint accounting firms or asset valuation organizations to audit or evaluate the financial status， internal control status and asset value of the securities companies. The specific procedures shall be formulated by the State Council’s securities regulatory authority in conjunction with the relevant competent departments.

　　Article 150： Where the net capital or other risk control indices of a securities company do（es） not fulfil regulations， the State Council‘s securities regulatory authority shall order rectification within a stipulated time limit. Where the securities company fails to carry out rectification within the time limit or its act seriously endangers the stable operation of the company or harms the lawful rights and interests of its clients， the State Council’s securities regulatory authority may adopt the following measures depending on the circumstance：

　　restrict business activities， order suspension of certain businesses and cease approving new businesses；cease approving the establishment and takeover of branches of business nature；restrict the distribution of dividends， and restrict the payment of remuneration and provision of welfare benefits to the directors， supervisors and senior management personnel；restrict the transfer of property or creation of other rights on property；order the replacement of directors， supervisors and senior management personnel or restrict their rights；order the transfer of equity of controlling shareholders or restrict the exercise of shareholders‘ rights by the relevant shareholders； and revocation of the relevant business permit. After the securities company has carried out rectification， it shall submit a report to the State Council’s securities regulatory authority. Where the State Council‘s securities regulatory authority confirms that the relevant risk control indices are fulfilled upon inspection check， it shall remove the relevant measures specified in the preceding paragraph imposed on the company within three days of the completion of the inspection check.

　　Article 151： Where the shareholders of a securities company makes false capital contributions or surreptitiously withdraw their capital contributions， the State Council‘s securities regulatory authority shall order rectification within a stipulated time limit， and may order them to transfer the equity of the securities company they hold.

　　Before the shareholders specified in the preceding paragraph correct their illegal act and transfer the equity of the securities company they hold， the State Council‘s securities regulatory authority may restrict their shareholder’s rights.

　　Article 152： Where the directors， supervisors and senior management personnel of a securities company fail to act with due diligence， thereby causing major act in violation of laws or regulations or major risks of the company， the State Council‘s securities regulatory authority may revoke their employment qualifications and order the company to replace them.

　　Article 153： Where a securities company engages in illegal operation or has a major risk， which seriously endangers the order of the securities market and harms the interests of investors， the State Council‘s securities regulatory authority may impose regulatory measures on the said company such as ordering the termination of operation for rectification， appointing other organization to take custody or take over the company， or shut down the company.

　　Article 154： During the period in which the securities company has been ordered to terminate operation for rectification， taken custody or over according to law or undergoes liquidation or it encounters a major risk， the following measures may be imposed on the directly responsible directors， supervisors， senior management personnel and other directly responsible persons of the securities company upon the approval of the State Council‘s securities regulatory authority：

　　notify the customs authority to， according to law， restrict his departure from China； and apply to the judicial authorities to prohibit his transfer， assignment or disposal of property in other manner， or creation of other rights on property. PART SEVEN： SECURITIES REGISTRATION AND CLEARING INSTITUTIONS

　　Article 155： Securities registration and clearing institutions are non-profit legal persons that provide centralized registration， custody and clearing services for securities trading.

　　The establishment of securities registration and clearing institutions shall be subject to approval by the State Council‘s securities regulatory authority.

　　Article 156： To establish a securities registration and clearing institution， the following conditions shall be met：

　　it has its own funds of not less than Rmb 200 million；it has the necessary site and facilities for securities registration， custody and clearing services；its main management personnel and working personnel must have securities business qualifications； and other conditions specified by the State Council‘s securities regulatory authority. The names of securities registration and clearing institutions shall include the words “securities registration and clearing”。

　　Article 157： Securities registration and clearing institutions shall perform the following functions：

　　the establishment of securities accounts and clearing accounts；the custody and transfer of ownership of securities；the registration of the names of the holders of securities；the clearing and delivery of listed securities traded on the stock exchange；the allotment of securities rights and interests upon entrustment by the issuer；the handling of inquiries concerning the aforementioned businesses； and other businesses approved by the State Council‘s securities regulatory authority. Article 158： A nationwide， centralized， unified method of operation shall be adopted for the registration and clearing of securities.

　　The articles of association and business rules of securities registration and clearing institutions shall be formulated according to law and be subject to approval by the State Council‘s securities regulatory authority.

　　Article 159： A holder of listed securities shall place all such securities in the custody of a securities registration and clearing institution before trading the same.

　　Securities registration and clearing institutions may not misappropriate their clients‘ securities.

　　Article 160： Securities registration and clearing institutions shall furnish the issuers of securities with the name lists and relevant information of the holders of their securities.

　　On the basis of the results of securities registration and clearing， securities registration and clearing institutions shall confirm the fact that particular securities are held by particular holders and provide registered information on the holders of the securities. Securities registration and clearing institutions shall ensure the truthfulness， accuracy and completeness of the name lists of the holders of securities and the records of registration of change in ownership. Such name lists and records may not be concealed， forged， altered or destroyed.

　　Article 161： Securities registration and clearing institutions shall adopt the following measures to ensure the normal operation of business：

　　to have the necessary service equipment and comprehensive data security and protection measures；to have established sound management systems for business， financial affairs and security； and to have established comprehensive risk management systems. Article 162： Securities registration and clearing institutions shall properly preserve their records， the original evidence relating to custody and clearing and the relevant document and materials. They shall be kept for a period of not less than 20 years.

　　Article 163： Securities registration and clearing institutions shall establish securities clearing risk funds to be paid for or make up the losses of securities registration and clearing institutions caused by default on delivery， technical failures， operational errors or events of force majeure.

　　Securities clearing risk funds shall be allocated from the business revenue and earnings of securities registration and clearing institutions， and may be collected from clearing participants at a fixed percentage of the volume of their securities trading business.

　　The methods of raising and managing securities clearing risk funds shall be specified by the State Council‘s securities regulatory authority in conjunction with the State Council’s finance department.

　　Article 164： The money in securities clearing risk funds shall be deposited in a dedicated account at a designated bank and managed as allocated money.

　　After a securities registration and clearing institution has paid compensation from the risk fund， it shall seek recourse against the responsible person（s）。

　　Article 165： Applications by securities registration and clearing institutions for their dissolution shall be subject to approval by the State Council‘s securities regulatory authority.

　　Article 166： Investors that entrust securities companies with securities transactions shall apply to open a securities account. Securities registration and clearing institutions shall open a securities account for the investors in the name of the investor according to regulations.

　　Investors that apply to open an account must hold a legal document that proves the identity of a Chinese national or status of a Chinese legal person， except stipulated otherwise by the State.

　　Article 167： When a securities registration and clearing institution provides net balance clearing services for securities trading， it shall request the clearing participants to pay securities and funds in full and provide guarantee for delivery according to the payment for delivery principle. Before the completion of the delivery， no one may use the securities， funds or collateral used for delivery.

　　Where a clearing participant fails to fulfil its delivery obligation according to schedule， the securities registration and clearing institution has the rights to handle the property mentioned in the preceding paragraph according to business rules.

　　Article 168： Various types of clearing funds and securities collected by securities registration and clearing institutions according to business rules must be deposited in the account dedicated to clearing and delivery. They may only be used for the clearing and delivery of securities transactions already concluded according to business rules and may not be subject to enforcement.

　　PART EIGHT： SECURITIES SERVICE ORGANIZATIONS

　　Article 169： Engagement in securities services businesses by investment consultancy institutions， financial consultancy institutions， credit rating institutions， asset valuation institutions and accounting firms must be approved by the State Council‘s securities regulatory authority and the relevant competent departments.

　　The administrative procedures for examination and approval of engagement in securities service businesses by investment consultancy institutions， financial consultancy institutions， credit rating institutions， asset valuation institutions and accounting firms shall be formulated by the State Council‘s securities regulatory authority and the relevant competent departments.

　　Article 170： The personnel of investment consultancy institutions， financial consultancy institutions and credit rating institutions that engage in securities service business must have professional knowledge of securities and have not less than two years‘ work experience in the securities business or securities service business. The State Council’s securities regulatory authority shall formulate standards and administrative measures for the determination of the qualification of such personnel to engage in securities business.

　　Article 171： When engaging in securities service business， investment consultancy institutions and their employees may not commit the following acts：

　　investing in securities as an agent for an entrusting party；agreeing with an entrusting party to share earnings or losses from securities investment；purchasing or selling the shares of listed companies to which the consultancy institution provides services；providing or disseminating information that is false or misleads investors using the media or through other methods； or other acts prohibited by laws or administrative regulations. Where one of the acts listed in the preceding paragraph is committed， thereby causing loss to investors， the perpetrator shall bear the liability for damages according to law.

　　Article 172： Investment consultancy institutions and credit rating institutions that engage in securities service business shall charge service fees in accordance with the standards or charging methods prescribed by the relevant competent department of the State Council.

　　Article 173： Where a securities service organization formulates and issues documents such as audit reports， asset valuation reports， financial consultancy reports， credit rating reports or legal opinions， etc. for the issuance， listing or trading of securities or other securities business activities， it shall fulfil its duty of due diligence and check and verify the truthfulness， accuracy and completeness of the contents of documents and materials on which it relies. Where the documents formulated and issued by them contain falsehoods， misleading statements or major omissions， thereby causing loss to others， it shall bear joint and several liability for such damages with the issuer and the listed company， unless it is able to prove that it is not at fault.

　　PART NINE： SECURITIES ASSOCIATION

　　Article 174： The Securities Association is the self-regulating organization for the securities industry and is a social organization with the status of a legal person.

　　Securities companies must join the Securities Association.

　　The organ of authority of the Securities Association shall be the general assembly， composed of all of the members.

　　Article 175： The charter of the Securities Association shall be formulated by its general assembly and submitted to the State Council‘s securities regulatory authority for record filing.

　　Article 176： The Securities Association shall perform the following duties：

　　to educate and organize members to abide by laws and administrative regulations concerning securities；to safeguard the lawful rights and interests of members according to law and to report members‘ proposals and requests to the securities regulatory authority；to collate and process information on securities and provide services to members；to formulate rules to be complied with by the members， to arrange for vocational training for the working personnel of its members and to organize business exchanges among members；to mediate in the event of disputes over securities business between members or between members and their clients；to make arrangements for research by members into the development， operation and relevant contents of securities business；to supervise and inspect members’ acts and to take disciplinary actions in accordance with regulations on any member that violates laws， administrative regulations or the charter of the Association； and other duties stipulated in the charter of the Securities Association. Article 177： The Securities Association shall have a board of governors. The members of the board of governors shall be elected as prescribed in the charter.

　　PART TEN： SECURITIES REGULATORY AUTHORITY

　　Article 178： The State Council‘s securities regulatory authority shall regulate the securities market according to law. It shall safeguard the order of the securities market and ensure the lawful operation thereof.

　　Article 179： The State Council‘s securities regulatory authority shall perform the following duties in the course of regulating the securities market：

　　to formulate rules and regulations concerning supervision and administration of the securities market according to law and to lawfully exercise its right to carry out examination/verification and grant approval；to regulate according to law the offering4， listing， trading， registration， custody and clearing of securities；to regulate according to law the securities business activities of the issuers of securities， listed companies， securities companies， securities investment fund management companies， securities service organizations， stock exchanges and securities registration and clearing institutions；to formulate according to law the qualification standards and code of conduct for persons engaged in securities business， and to supervise the implementation thereof；to supervise and inspect according to law the disclosure of information in connection with securities offering4， listing and trading；to direct and supervise the activities of the Securities Association according to law；to investigate and deal with violations of laws and administrative regulations concerning the supervision and administration of the securities market according to law； and other duties specified in laws and administrative regulations. The State Council‘s securities regulatory authority may establish a regulatory cooperation mechanism with the securities regulatory authority of other countries or regions to implement cross-border regulation.

　　Article 180： When performing its duties according to law， the State Council‘s securities regulatory authority shall have the right to adopt the following measures：

　　to carry out on-site inspection on securities issuers， listed companies， securities companies， securities investment fund management companies， securities service organizations， stock exchanges and securities registration and clearing institutions；to enter the suspected site at which an illegal act has been committed to investigate and obtain evidence；to question the persons concerned and the work units and individuals connected with the event under investigation， and to require them to give explanations concerning matters connected with the event under investigation；to inspect and take copies of the materials connected with the event under investigation such as registration of property rights and correspondence records；to inspect and take copies of the securities trading records， records of registration of change in ownership， financial and accounting information and other relevant documents and information of the persons concerned and the work units and individuals connected with the event under investigation， and to seal up documents and information that might be transferred， concealed or destroyed；to examine the fund accounts， securities accounts and bank accounts of the persons concerned and the work units and individuals connected with the event under investigation， and， if there is evidence to substantiate signs that properties involved in the case such as illegally obtained funds or securities have been transferred or concealed or that the major evidence has been concealed， forged or destroyed， to freeze or seal up the same upon approval of the responsible person of the State Council‘s securities regulatory authority； and when investigating major illegal acts involving securities such as manipulation of the securities market and insider trading， the purchase and sale of securities of the party related to the event under investigation may be restricted upon approval of the responsible person of the State Council’s securities regulatory authority， but the time limit of restriction may not exceed 15 trading days； where the case is complicated， it may be extended for 15 trading days. Article 181： When the State Council‘s securities regulatory authority carries out supervision， inspection or investigation during the lawful performance of its duties， the number of personnel responsible for supervision， inspection or investigation shall be no less than two， and they shall produce the legal documents and the letter of notification of supervision， inspection or investigation. Where there are less than two personnel responsible for supervision， inspection or investigation or the personnel fail to produce the legal documents or the letter of notification of supervision， inspection or investigation， the work unit under inspection or investigation shall have the right to refuse the inspection or investigation.

　　Article 182： The working personnel of the State Council‘s securities regulatory authority must perform their duties faithfully， carry out their work according to law and be impartial and honest. They may not manipulate their positions to obtain improper gains or divulge the trade secrets of the relevant work units and individuals come to their knowledge.

　　Article 183： When the State Council‘s securities regulatory authority performs its duties according to law， the work units and individuals being inspected or investigated shall cooperate and truthfully provide the relevant documents and information. Such work units and individuals may not refuse to cooperate， obstruct inspection or investigation or conceal relevant documents or information.

　　Article 184： The rules and regulations and the regulatory work systems formulated according to law by the State Council‘s securities regulatory authority shall be made public.

　　Decisions to impose penalties for illegal acts involving securities that are made by the State Council‘s securities regulatory authority on the basis of the results of its investigations shall be made public.

　　Article 185： The State Council‘s securities regulatory authority shall establish a regulatory information sharing system with other finance regulatory authorities of the State Council.

　　When the State Council‘s securities regulatory authority carries out supervision and inspection or investigation during the performance of its duties according to law， the relevant departments shall cooperate.

　　Article 186： If， during the performance of its duties according to law， the State Council‘s securities regulatory authority suspects that an illegal act involving securities discovered by it may constitute a criminal offence， it shall hand the case over to the judicial authorities for handling.

　　Article 187： The working personnel of the State Council‘s securities regulatory authority may not hold positions in the organizations regulated.

　　PART ELEVEN： LEGAL LIABILITY

　　Article 188： Any person that publicly offers securities or does so in a disguised manner without verification and approval by the statutory authority shall be ordered to cease the offering and refund the proceeds of the offer together with bank deposit interest for the same period， and fined not less than 1% and not more than 5% of the amount of the illegal offer proceeds. The company that is established by way of the unauthorized public offer or disguised public offer of securities shall be shut down by the authority or department performing regulatory duties in accordance with the law jointly with the local people‘s government at or above county level. The persons in charge that are directly responsible therefor and the other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 189： Where an issuer that fails to meet the conditions of offering obtains by deceptive means verification and approval of an offer， a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed if the securities have not yet been issued. If the securities have already been issued， a fine of not less than 1% and not more than 5% of the amount of the illegal offer proceeds shall be imposed. The persons in charge that are directly responsible therefor and the other directly responsible persons shall be fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　If the controlling shareholder or de facto controlling person of the issuer has instigated the issuer to conduct the illegal act specified in the preceding paragraph， it shall be subject to penalties in accordance with the provisions of the preceding paragraph.

　　Article 190： Where a securities company distributes or deals as an agent in securities that are publicly offered without verification and approval， it shall be ordered to cease the distribution or dealing， its illegal income shall be confiscated and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 300，000， a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed. If it has caused losses to the investors， it shall bear the joint and several liability for compensation with the issuer. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning， their employment qualifications or securities business qualifications shall be revoked， and they shall be fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 191： If a securities company has any of the following acts in distribution of securities， it shall be ordered to rectify the matter and issued a warning， its illegal income shall be confiscated and a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed. If the circumstances are serious， its relevant business licence shall be suspended or revoked. If it has caused losses to other securities distribution institutions or investors， it shall bear the liability for compensation according to law. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning， and a fine of not less than Rmb 30，000 and not more than Rmb 300，000 may also be imposed. If the circumstances are serious， their employment qualifications or securities business qualifications shall be revoked：

　　carry out advertising or other publicity and promotional activities that are false or that mislead investors；solicit distribution business by means of unfair competition； or other acts in violation of the provisions on securities distribution business. Article 192： If a sponsor issues a sponsorship document that contains falsehoods， misleading statements or major omissions or fails to perform other statutory duties， it shall be ordered to rectify the matter and issued a warning， its business income shall be confiscated and a fine of not less than the amount of and not more than five times the business income shall be imposed. If the circumstances are serious， its relevant business licence shall be suspended or revoked. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and a fine of not less than Rmb 30，000 and not more than Rmb 300，000 shall be imposed. If the circumstances are serious， their employment qualifications or securities business qualifications shall be revoked.

　　Article 193： If an issuer， a listed company or other person with information disclosure obligations fails to disclose information according to regulations or if the disclosed information contains falsehoods， misleading statements or major omissions， it shall be ordered to carry out rectification， a warning shall be issued， and a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　If an issuer， a listed company or other person with information disclosure obligations fails to submit a relevant report according to regulations or if a submitted report contains falsehoods， misleading statements or major omissions， it shall be ordered to carry out rectification， a warning shall be issued， and a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　If the controlling shareholder or de facto controlling person of the issuer， listed company or other person with information disclosure obligations has instigated the issuer， the listed company or the person to carry out the illegal act specified in the two preceding paragraphs， it shall be subject to penalties in accordance with the provisions of the two preceding paragraphs.

　　Article 194： If an issuer or a listed company changes the usage of the proceeds of a public offer of securities without authorization， it shall be ordered to rectify the matter， and the persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　If the controlling shareholder or de facto controlling person of the issuer or listed company has instigated the issuer or listed company to carry out the illegal act specified in the preceding paragraph， the controlling shareholder or de facto controlling person shall be issued a warning and fined not less than Rmb 300，000 and not more than Rmb 600，000. The persons in charge that are directly responsible therefor and other directly responsible persons shall be subject to penalties in accordance with the provisions of the preceding paragraph.

　　Article 195： If a director， supervisor or senior management personnel of a listed company or a shareholder that holds more than 5% of the shares of the listed company deals in the shares of the company in violation of Article 47 hereof， a warning shall be issued and a fine of not less than Rmb 30，000 and not more than Rmb 100，000 may be imposed.

　　Article 196： If anyone illegally establishes a stock exchange， the people‘s government above the county level shall ban the exchange， confiscate its illegal income and impose a fine of not less than the amount of and not more than five times the illegal income. If there is no illegal income or the illegal income is less than Rmb 100，000， a fine of not less than Rmb 100，000 and not more than Rmb 500，000 shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 197： If anyone， without approval， establishes a securities company or illegally operates securities business， the securities regulatory authority shall ban the company or business， confiscate the illegal income and impose a fine of not less than the amount of and not more than five times the illegal income. If there is no illegal income or the illegal income is less than Rmb 300，000， a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 198： If anyone violates the provisions hereof by employing any person without employment qualifications or securities business qualifications， the securities regulatory authority shall order rectification and issue a warning， and may also impose a fine of not less than Rmb 100，000 and not more than Rmb 300，000. The persons in charge that are directly responsible therefor shall be issued a warning and may also be fined not less than Rmb 30，000 and not more than Rmb 100，000.

　　Article 199： If a person that is prohibited by laws or administrative regulations from participating in share trading holds or purchases or sells shares directly， under an assumed name or in the name of another， he shall be ordered to， dispose of the illegally held shares according to law. The illegal income shall be confiscated， and a fine of not more than the value of the shares purchased or sold shall be imposed. If the perpetrator is a member of the working personnel of the State， administrative penalty shall also be imposed according to law.

　　Article 200： If a member of the working personnel of a stock exchange， securities company， securities registration and clearing institution， securities service organization or the Securities Association willfully provides false information， conceals， forges， alters or destroys trading records or deceives investors into purchasing or selling securities， his securities business qualifications shall be revoked and a fine of not less than Rmb 30，000 and not more than Rmb 100，000 shall be imposed. If the perpetrator is a member of the working personnel of the State， administrative penalty shall also be imposed according to law.

　　Article 201： If a securities service organization or person that issues documents such as audit reports， asset valuation reports or legal opinions for share issuance， listing or trading purchases or sells shares in violation of Article 45 hereof， the organization or person shall be ordered to dispose of the illegally held shares according to law. The illegal income shall be confiscated and a fine of not more than the value of the shares purchased or sold shall be imposed.

　　Article 202： If， prior to the announcement of information relating to the issuance or trading of securities or other information that has a major effect on the price of securities， an informed person with insider information on securities trading or a person that has illegally obtained insider information on securities trading purchases or sells such securities， divulges such information or counsels another person to purchase or sell such securities， the person shall be ordered to dispose of the illegally held securities according to law； the illegal income shall be confiscated and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 30，000， a fine of not less than Rmb 30，000 and not more than Rmb 600，000 shall be imposed. If a work unit carries out insider trading， the persons in charge that are directly responsible therefor and other directly responsible persons shall also be issued a warning， and fined not less than Rmb 30，000 and not more than Rmb 300，000. If a member of the working personnel of the securities regulatory authority carries out insider trading， he shall be subject to severe penalty.

　　Article 203： If anyone violates the provisions hereof by manipulating the securities market， the perpetrator shall be ordered to dispose of its illegally held securities according to law. The illegal income shall be confiscated and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 300，000， a fine of not less than Rmb 300，000 and not more than Rmb 3 million shall be imposed. If a work unit manipulates the securities market， the persons in charge that are directly responsible therefor and other directly responsible persons shall also be issued a warning and fined not less than Rmb 100，000 and not more than Rmb 600，000.

　　Article 204： If anyone violates the provisions of law by purchasing or selling securities within the period in which transfer is restricted， the perpetrator shall be ordered to rectify the matter and be issued a warning， and a fine of not more than the value of the securities illegally purchased or sold shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 205： If a securities company violates the provisions hereof by engaging in trading on the margin and short sale of securities for clients， the illegal income shall be confiscated， the relevant business licence shall be suspended or revoked， and a fine of not more than the value of the margin loan shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning. Their employment qualifications or securities business qualifications shall be revoked and they shall be fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 206： If anyone violates the provisions of the first and the third paragraphs of Article 78 hereof by disturbing the order of the securities market， the securities regulatory authority shall order the perpetrator to rectify the matter， confiscate the illegal income and impose a fine of not less than the amount of and not more than five times the illegal income. If there is no illegal income or the illegal income is less than Rmb 30，000， a fine of not less than Rmb 30，000 and not more than Rmb 200，000 shall be imposed.

　　Article 207： If anyone violates the provisions of the second paragraph of Article 78 hereof by making a false statement or providing misleading information in securities trading activities， the perpetrator shall be ordered to rectify the matter and fined not less than Rmb 30，000 and not more than Rmb 200，000. If the perpetrator is a member of the working personnel of the State， administrative penalty shall also be imposed according to law.

　　Article 208： If a legal person violates the provisions hereof by establishing an account in the name of another person， or using the account of another person to purchase or sell securities， the legal person shall be ordered to rectify the matter， the illegal income shall be confiscated and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 30，000， a fine of not less than Rmb 30，000 and not more than Rmb 300，000 shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be fined not less than Rmb 30，000 and not more than Rmb 100，000.

　　If a securities company provides its own or another person‘s securities trading account for an illegal act specified in the preceding paragraph， in addition to the penalty specified in the preceding paragraph， the employment qualifications or securities business qualifications of the persons in charge that are directly responsible therefor and other directly responsible persons shall be revoked.

　　Article 209： If a securities company violates the provisions hereof by engaging in securities business on its own account using the name of another person or the name of an individual， it shall be ordered to rectify the matter， the illegal income shall be confiscated， and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 300，000， a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed. If the circumstances are serious， its permit for securities business on own account shall be suspended or revoked. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning. Their employment qualifications or securities business qualifications shall be revoked and they shall be fined not less than Rmb 30，000 and not more than Rmb 100，000.

　　Article 210： If a securities company deals in securities or handles trading matters contrary to a client‘s instructions， or handles non-trading matters contrary to the client’s authentic declaration of intention， it shall be ordered to rectify the matter and fined not less than Rmb 10，000 and not more than Rmb 100，000. If losses are caused to the client， the securities company shall bear the liability for compensation according to law.

　　Article 211： If a securities company or securities registration and clearing institution misappropriates the funds or securities of a client， or purchases or sells securities for a client without the client‘s instruction， it shall be ordered to rectify the matter. The illegal income shall be confiscated， and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 100，000， a fine of not less than Rmb 100，000 and not more than Rmb 600，000 shall be imposed. If the circumstances are serious， it shall be ordered to close down or its relevant business licence shall be revoked. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning. Their employment qualifications or securities business qualifications shall be revoked and they shall be fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 212： If， when handling brokerage business， a securities company accepts a discretionary order of a client to purchase or sell securities or gives a commitment to a client concerning earnings from the purchase or sale of securities or compensation for losses from the purchase or sale of securities， it shall be ordered to rectify the matter. The illegal income shall be confiscated， and a fine of not less than Rmb 50，000 and not more than Rmb 200，000 shall be imposed. Its relevant business licence may also be suspended or revoked. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 100，000. Their employment qualifications or securities business qualifications may also be revoked.

　　Article 213： If a purchaser fails to perform the obligations in relation to the takeover of a listed company such as making announcements， issuing a takeover offer and submitting a listed company takeover report， or amends the takeover offer without authorization， it shall be ordered to rectify the matter， issued a warning and fined not less than Rmb 100，000 and not more than Rmb 300，000. Before it rectifies the matter， it may not exercise voting rights for the portion of shares held by it or jointly held by it with other parties through agreement or other arrangement. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 214： If a purchaser or its controlling shareholder uses the takeover of a listed company to harm the lawful rights and interests of the target company and its shareholders， it shall be ordered to rectify the matter and issued a warning. If the circumstances are serious， it shall also be fined not less Rmb 100，000 and not more than Rmb 600，000. If losses are caused to the target company and its shareholders， the purchaser or its controlling shareholder shall bear the liability for compensation according to law. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 215： If a securities company or a member of its working personnel violates the provisions hereof by privately accepting instructions from a client to purchase or sell securities， it shall be ordered to rectify the matter and issued a warning. The illegal income shall be confiscated and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 100，000， a fine of not less than Rmb 100，000 and not more than Rmb 300，000 shall be imposed.

　　Article 216： If a securities company violates provisions by engaging in the trading of unlisted securities without approval， it shall be ordered to rectify the matter. The illegal income shall be confiscated， and a fine of not less than the amount of and not more than five times the illegal income shall be imposed.

　　Article 217： If a securities company fails to commence business within three months after it has been established without justifiable grounds， or if it voluntarily suspends business for a continuous period of three months or more after having commenced business， its corporate business licence shall be revoked by the company registry.

　　Article 218： If a securities company violates Article 129 hereof by establishing， acquiring or closing a branch without authorization or by merger， division， termination of business， dissolution or bankruptcy， or by establishing， acquiring， making equity participation in a securities business institution abroad， it shall be ordered to rectify the matter. The illegal income shall be confiscated， and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 100，000， a fine of not less than Rmb 100，000 and not more than Rmb 600，000 shall be imposed. The persons in charge that are directly responsible therefor shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 100，000.

　　If a securities company violates Article 129 hereof by changing the relevant matter without authorization， it shall be ordered to rectify the matter and fined not less than Rmb 100，000 and not more than Rmb 300，000. The persons in charge that are directly responsible therefor shall be issued a warning and fined not more than Rmb 50，000.

　　Article 219： If a securities company violates the provisions hereof by engaging in securities business outside its scope of business， it shall be ordered to rectify the matter. The illegal income shall be confiscated， and a fine of not less than the amount of and not more than five times the illegal income shall be imposed. If there is no illegal income or the illegal income is less than Rmb 300，000， a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed. If the circumstances are serious， the securities company shall be ordered to close down. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning. Their employment qualifications or securities business qualifications shall be revoked and they shall be fined not less than Rmb 30，000 and not more than Rmb 100，000.

　　Article 220： If a securities company fails to keep its securities brokerage business， securities distribution business， securities business on its own account and securities asset management business separate according to law and operates them together， it shall be ordered to rectify the matter. The illegal income shall be confiscated， and a fine of not less than Rmb 300，000 and not more than Rmb 600，000 shall be imposed. If the circumstances are serious， the relevant business licence shall be revoked. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 100，000. If the circumstances are serious， their employment qualifications or securities business qualifications shall be revoked.

　　Article 221： If anyone submits false supporting documents or uses other fraudulent means to conceal major facts to fraudulently obtains a securities business licence， or if a securities company commits a serious illegal act in the course of securities trading and is no longer qualified for operating such business， the securities regulatory authority shall revoke its securities business licence.

　　Article 222： If a securities company or its shareholder or de facto controlling person violates provisions and refuses to submit or provide business management information and materials to the securities regulatory authority， or if the business management information and materials submitted or provided contain falsehoods， misleading statements or major omissions， it shall be ordered to rectify the matter， issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000， and the relevant business licence of the securities company may be suspended or revoked. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not more than Rmb 30，000， and their employment qualifications or securities business qualifications may be revoked.

　　If a securities company provides financing or security to its shareholder or an affiliate of its shareholder， it shall be ordered to rectify the matter， issued a warning and fined not less than Rmb 100，000 and not more than Rmb 300，000. The persons in charge that are directly responsible therefor and other directly responsible persons shall be fined not less than Rmb 30，000 and not more than Rmb 100，000. If the shareholder is at fault， the State Council‘s securities regulatory authority may restrict its shareholder rights before it carries out rectification as required. If it refuses to carry out rectification， it may be ordered to transfer the equity interests of the securities company it holds.

　　Article 223： If a securities service organization fails to act with due diligence and the documents prepared or issued by it contain falsehoods， misleading statements or major omissions， it shall be ordered to rectify the matter. The business income shall be confiscated， its securities service licence shall be suspended or revoked， and a fine of not less than the amount of and not more than five times the business income shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning. Their securities business qualifications shall be revoked and they shall be fined not less than Rmb 30，000 and not more than Rmb 100，000.

　　Article 224： Anyone that violates the provisions hereof by issuing or distributing corporate bonds shall be punished by the department authorized by the State Council in accordance with the relevant provisions hereof.

　　Article 225： If a listed company， securities company， stock exchange， securities registration and clearing institution or securities service organization fails to keep the relevant documents and information in accordance with the relevant provisions， it shall be ordered to rectify the matter， issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000. If any of them conceals， forges， alters or destroys the relevant document and information， it shall be issued a warning and fined not less than Rmb 300，000 and not more than Rmb 600，000.

　　Article 226： If a securities registration and clearing institution is established without the approval of the State Council‘s securities regulatory authority， it shall be banned by the securities regulatory authority. The illegal income shall be confiscated， and a fine of not less than the amount of and not more than five times the illegal income shall be imposed.

　　If an investment consultancy institution， financial consultancy institution， credit rating institution， asset valuation institution or accounting firm engages in securities service business without approval， it shall be ordered to rectify the matter. The illegal income shall be confiscated， and a fine of not less than the amount of and not more than five times the illegal income shall be imposed.

　　If a securities registration and clearing institution or a securities service organization violates the provisions hereof or the business rules formulated according to law， the securities regulatory authority shall order rectification， confiscate the illegal income， and impose a fine of not less than the amount of and not more than five times the illegal income. If there is no illegal income or the illegal income is less than Rmb 100，000， a fine of not less than Rmb 100，000 and not more than Rmb 300，000 shall be imposed. If the circumstances are serious， it shall be ordered to close down or its securities service business licence shall be revoked.

　　Article 227： The persons in charge that are directly responsible and other directly responsible persons shall be subject to administrative penalty in accordance with the law if the State Council‘s securities regulatory authority or the department authorized by the State Council：

　　verifies and approves an application for issuance of securities or establishment of a securities company that does not satisfy the provisions hereof；adopts， in violation of provisions， the measures in Article 180 hereof such as on-site inspection， investigation and collection of evidence， inquiry， freeze or sealing up；imposes administrative penalty on the relevant institutions and persons in violation of provisions； or carries out other acts of failure to perform its duties according to law. Article 228： If a member of the working personnel of the securities regulatory authority or a member of the issuance examination commission fails to perform his duties as specified in this Law， abuses his authority， is derelict in his duties， uses his position to seek improper benefits， or divulges the trade secrets of the relevant work units and individuals that he knows of， legal liability shall be pursued according to law.

　　Article 229： If a stock exchange approves upon examination an application for listing of securities that does not meet the conditions specified herein， it shall be issued a warning. The business income shall be confiscated， and a fine of not less than the amount of and not more than five times the business income shall be imposed. The persons in charge that are directly responsible therefor and other directly responsible persons shall be issued a warning and fined not less than Rmb 30，000 and not more than Rmb 300，000.

　　Article 230： If anyone refuses or obstructs， without resorting to violence or threat， the exercise of the supervision， inspection and investigation functions and powers by the securities regulatory authority or its working personnel according to law， public security administrative penalty shall be imposed according to law.

　　Article 231： If any violation of the provisions hereof constitutes a criminal offence， criminal liability shall be pursued according to law.

　　Article 232： If the property of a person that has violated the provisions hereof and that therefore bears civil liability for compensation and is required to pay a fine is insufficient to pay both the damages and fines， such person shall first bear the civil liability for compensation.

　　Article 233： If there is a violation of laws， administrative regulations or the relevant provisions of the State Council‘s securities regulatory authority and the circumstances are serious， the State Council’s securities regulatory authority may impose the measure of market entry denial on the relevant responsible persons.

　　For the purposes of the preceding paragraph， the term “market entry denial” means the system of denial of engaging in securities business or holding the position of director， supervisor or senior management personnel in a listed company for a certain time period or for life.

　　Article 234： Fines collected and illegal income confiscated pursuant to this Law shall all be paid into the State treasury.

　　Article 235： If a person is dissatisfied with a punishment decision of the securities regulatory authority or the department authorized by the State Council， such person may apply for administrative review or directly institute proceedings in a people‘s court according to law.

　　PART TWELVE： SUPPLEMENTARY PROVISIONS

　　Article 236： Securities whose listing on a stock exchange was approved pursuant to administrative regulations prior to the implementation of this Law shall continue to be traded according to law.

　　Securities business organizations that were established upon approval pursuant to administrative regulations and regulations of the State Council‘s administrative department in charge of finance prior to the implementation of this Law and that do not fully comply with the provisions hereof shall meet the requirements specified herein within the specified time limit. The State Council shall separately formulate specific implementing procedures therefor.

　　Article 237： Issuers that apply for verification and approval of a public offer of shares or corporate bonds shall pay the fees for examination and verification according to regulations.

　　Article 238： Direct or indirect offer of securities overseas by a domestic enterprise or overseas listing of its securities for trading must be approved by the State Council‘s securities regulatory authority according to the provisions of the State Council.

　　Article 239： Specific procedures for shares of companies in China that are to be subscribed and traded in foreign currencies shall be separately formulated by the State Council.

　　Article 240： This Law shall be implemented as of 1 January 2006.