Article 81： Channels for funds to flow into the market shall be expanded according to law. Flow of funds into the stock market in violation of provisions is prohibited.

　　Article 82： No one is allowed to misappropriate public funds to purchase or sell securities.

　　Article 83： Purchase and sale of shares listed for trading by State-owned enterprises and enterprises where State-owned assets constitute a controlling interest must comply with the relevant State provisions.

　　Article 84： If stock exchanges， securities companies， securities registration and clearing institutions， securities service organizations and their employees discover any prohibited trading acts in the course of securities trading， they shall timely report such acts to the securities regulatory authority.

　　PART FOUR： TAKEOVER OF LISTED COMPANIES

　　Article 85： Investors may acquire listed companies by means of takeover by offer， takeover by agreement or other lawful means.

　　Article 86： If， through securities trading at a stock exchange， an investor holds or jointly holds with another person through an agreement or other arrangement 5% of the shares issued by a listed company， the investor shall， within three days of the date on which such shareholding becomes a fact， submit a written report to the State Council‘s securities regulatory authority and the stock exchange， notify the listed company and make an announcement. During the time period specified above， the investor may not continue to purchase or sell shares in the listed company.

　　Once an investor holds or jointly holds with another person through an agreement or other arrangement 5% of the shares issued by a listed company， he shall， pursuant to the provisions of the preceding paragraph， report and make an announcement of each 5% increase or decrease in the issued shares he holds in the listed company. During the reporting period， and for two days following the report and announcement， the investor may not continue to purchase or sell shares in the listed company.

　　Article 87： Written reports and announcements made in accordance with the provisions of the preceding article shall include the following：

　　the name and domicile of the shareholder；the description and quantity of the shares held； and the date on which the shareholding or the increase or decrease in the shareholding reached the statutory percentage. Article 88： If， through securities trading on a stock exchange， an investor holds or jointly holds with another person through an agreement or other arrangement 30% of the issued shares of a listed company and continues to buy up such shares， the investor shall issue a offer of takeover of all or part of the equity in the listed company to all the shareholders of the listed company according to law.

　　An offer of takeover of part of the equity in a listed company shall stipulate that where the number of shares that the shareholders of the target company undertake to sell exceeds the number of shares scheduled to be bought up， the purchaser shall carry out the takeover according to the ratio.

　　Article 89： When issuing a takeover offer pursuant to the preceding article， the purchaser must first submit a report on the takeover of the listed company to the State Council‘s securities regulatory authority. The report shall contain the following particulars：

　　the name and domicile of the purchaser；the decision of the purchaser concerning the takeover；the name of the listed company targeted；the purpose of the takeover；a detailed description of the shares bought up and the number of shares scheduled to be bought up；the term and price of the takeover；the amount and guaranteed availability of the funds required for the takeover； and the ratio between the total number of issued shares of the target company and the number of such shares held at the time of submission of the takeover report. The purchaser shall simultaneously submit a listed company takeover report to the stock exchange.

　　Article 90： The purchaser shall announce his takeover offer 15 days after the date on which he submits the listed company takeover report pursuant to the preceding article. During the time period specified above， where the State Council‘s securities regulatory authority discovers that the listed company takeover report does not comply with the provisions of laws and administrative regulations， it shall notify the purchaser in a timely manner， and the purchaser may not announce his takeover offer.

　　The term of takeover stipulated in a takeover offer shall be not less than 30 days and not more than 60 days.

　　Article 91： During the undertaking time limit determined in a takeover offer， the purchaser may not revoke his takeover offer. If the purchaser needs to change the takeover offer， he must submit a report to the State Council‘s securities regulatory authority and the stock exchange in advance. If approved， the purchaser shall make an announcement.

　　Article 92： The conditions of takeover set forth in the takeover offer shall apply to all shareholders of the target company.

　　Article 93： In the case of takeover by offer， the purchaser may not， during the term of the takeover offer， sell shares in the target company or purchase shares in the target company by any method other than that prescribed in， or on any conditions other than those of， the offer.

　　Article 94： In the case of takeover by agreement， the purchaser may effect the equity transfer by entering into an agreement with the shareholders of the target company according to the provisions of laws and administrative regulations.

　　When a listed company is taken over by agreement， the purchaser must， within three days after the agreement is reached， submit a written report on the takeover agreement to the State Council‘s securities regulatory authority and the stock exchange， and make an announcement.

　　The takeover agreement may not be performed until the announcement has been made.

　　Article 95： In the case of takeover by agreement， the parties to the agreement may on an ad hoc basis entrust a securities registration and clearing institution with custody of the shares transferred pursuant to the agreement and with deposit of the funds into the designated bank.

　　Article 96： In the case of takeover by agreement， when a purchaser buys or jointly buys with another person through an agreement or other arrangement 30% of the issued shares of a listed company and continues to buy such shares， an offer of buying all or part of the shares in the listed company shall be issued to all shareholders of the said listed company， except where the issue of offer is exempted by the State Council‘s securities regulatory authority.

　　Where the purchaser buys the shares in the listed company by way of takeover by offer according to the provisions of the preceding paragraph， he shall comply with Articles 89 to 93 hereof.

　　Article 97： Where the equity distribution of the target company does not comply with the listing conditions upon the expiration of the term of takeover， the stock exchange shall terminate the listing and trading of the shares of the said listed company according to law. The remaining shareholders that still hold the shares of the target company shall have the right to sell their shares on the same conditions as those in the takeover offer， and the purchaser shall buy such shares.

　　If， after the completion of the takeover， the target company no longer fulfils the conditions of a company limited by shares， it shall change the corporate form according to law.

　　Article 98： During the takeover of a listed company， the shares in such company which are held by the purchaser of the listed company may not be transferred in the 12 months following the completion of the takeover.

　　Article 99： After the completion of a takeover， where the purchaser merges with and dissolves the target company， the existing shares in the dissolved company shall be replaced according to law by the purchaser.

　　Article 100： After the completion of a takeover， the purchaser shall， within 15 days， report the particulars of the takeover to the State Council‘s securities regulatory authority and the stock exchange， and make an announcement.

　　Article 101： The takeover of the shares held by a State-authorized investment organization in a listed company shall be approved by the relevant competent authority in accordance with the regulations of the State Council.

　　The State Council‘s securities regulatory authority shall formulate the specific procedures for takeover of listed companies according to the principles of this Law.

　　PART FIVE： STOCK EXCHANGES

　　Article 102： Stock exchanges are legal persons that provide sites and facilities for the centralized trading of securities， organize and supervise securities trading and implement self-disciplinary administration.

　　The establishment and dissolution of stock exchanges shall be decided on by the State Council.

　　Article 103： To establish a stock exchange， a constitution must be formulated.

　　The formulation and amendment of the constitution of a stock exchange must be approved by the State Council‘s securities regulatory authority.

　　Article 104： Stock exchanges must include the words “stock exchange” in their names. No other unit and no individual may use the name “stock exchange” or a similar name.

　　Article 105： The fee revenue which stock exchanges may allocate by themselves shall first be used to ensure the normal operation and gradual improvement of the stock exchange and its facilities.

　　The property accumulated by a stock exchange that implements membership system shall belong to its members. The rights and interests in the stock exchange shall be enjoyed jointly by its members. Accumulated property may not be distributed to members while the stock exchange is in existence.

　　Article 106： A stock exchange shall have a board of governors.

　　Article 107： A stock exchange shall have a general manager， who shall be appointed and removed by the State Council‘s securities regulatory authority.

　　Article 108： The persons described in Article 147 of the PRC， Company Law and the following persons may not serve as responsible persons of stock exchanges：

　　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 109： 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 that were dismissed， may not be employed as working personnel of stock exchanges.

　　Article 110： Only members of a stock exchange may enter that stock exchange to participate in centralized trading.

　　Article 111： Investors shall conclude a securities trading entrustment agreement with a securities company， and shall open a securities trading account with the securities company， and instruct， in writing， by telephone or otherwise， the said securities company to purchase and sell securities on their behalf.

　　Article 112： Securities companies shall， as instructed by investors， declare transactions in accordance with the securities trading rules and participate in centralized trading in the stock exchange， and shall bear the corresponding clearing and delivery responsibilities based on the transactions concluded. Securities registration and clearing institutions shall effect the clearing and delivery of securities and funds with the securities company based on the transactions concluded and in accordance with the rules for clearing and delivery， and carry out procedures for registration of the change in ownership of the securities for the clients of the securities company.

　　Article 113： Stock exchanges shall safeguard the fair organization of centralized trading and shall announce real-time quotations concerning the securities trading. They shall compile securities market quotation tables for each day of trading， and announce the same.

　　Without the permission of the stock exchange， no work unit or individual may announce real-time quotations concerning the securities trading.

　　Article 114： If a sudden event affecting the normal conduct of securities trading occurs， stock exchanges may effect a technical suspension of trading. Stock exchanges may decide to suspend the market if a sudden event of force majeure occurs or in order to protect the normal order of securities trading.

　　When stock exchanges effect a technical suspension of trading or decide to suspend the market， they must timely report the same to the State Council‘s securities regulatory authority.

　　Article 115： Stock exchanges shall implement real-time monitoring of securities tradings， and shall report any unusual trading as required by the State Council‘s securities regulatory authority.

　　Stock exchanges shall supervise the disclosure of information by listed companies and the relevant persons with information disclosure obligations to ensure their timely and accurate disclosure of information according to law.

　　Stock exchanges may， according to needs， restrict the trading of securities accounts with major unusual transactions， and shall report the matter to the State Council‘s securities regulatory authority for record filing.

　　Article 116： Stock exchanges shall allocate a certain percentage of their transaction costs， membership fees and seat fees to establish a risk fund. The risk fund shall be managed by the board of governors of the stock exchange.

　　The specific percentages of allocations to， and measures for the use of， the risk fund shall be specified by the State Council‘s securities regulatory authority in conjunction with the State Council’s finance department.

　　Article 117： Stock exchanges shall deposit the risk fund collected by them in dedicated accounts with their banks， and may not use the same without authorization.

　　Article 118： Stock exchanges shall， pursuant to securities laws and administrative regulations， formulate listing rules， trading rules， membership administration rules and other relevant rules， and submit the same to the State Council‘s securities regulatory authority for approval.

　　Article 119： If， in carrying out duties related to securities trading， the responsible persons and other working personnel of stock exchanges discover that a material relationship with themselves or any of their relatives is involved， they shall withdraw.

　　Article 120： The transaction results of trading that has been conducted in accordance with trading rules formulated according to law may not be changed. Traders may not be released from the civil liability incurred as a result of their violation of rules during trading. Gains obtained from trading against the rules shall be dealt with pursuant to the relevant provisions.