Chapter 1 General Provisions
Article 1: In order to regulate the issuance and trading of securities, protect the legitimate rights and interests of investors, maintain social and economic order and public interests, and promote the development of the socialist market economy, this Law is formulated.
Chapter 6 Investor Protection
Article 88: When securities companies sell securities or provide services to investors, they shall fully understand the basic information, property status, financial asset status, investment knowledge and experience, professional abilities, and other relevant information of investors in accordance with regulations; Truthfully explain the important content of securities and services, and fully reveal investment risks; Sell and provide securities and services that match the above situation of investors.
Investors shall provide the true information listed in the preceding paragraph in accordance with the explicit requirements of the securities company when purchasing securities or receiving services. If a securities company refuses to provide or fails to provide information as required, it shall inform the consequences and refuse to sell securities or provide services to it in accordance with regulations.
If a securities company violates the provisions of the first paragraph and causes losses to investors, it shall bear corresponding compensation liability.
Article 89: Investors can be divided into ordinary investors and professional investors based on factors such as property status, financial asset status, investment knowledge and experience, professional ability, etc. The standards for professional investors are prescribed by the securities regulatory authority of the State Council.
If a dispute arises between an ordinary investor and a securities company, the securities company shall prove that its actions comply with laws, administrative regulations, and the provisions of the securities regulatory authority under the State Council, and that there is no misleading, fraudulent, or other circumstances. If the securities company cannot prove it, it shall bear the corresponding compensation liability.
Article 90: The board of directors, independent directors, shareholders holding more than 1% of the voting rights, or investor protection institutions (hereinafter referred to as "investor protection institutions") established in accordance with laws, administrative regulations, or the provisions of the securities regulatory authority under the State Council of a listed company may act as collectors and publicly request the shareholders of the listed company to entrust them to attend the shareholders' meeting and exercise shareholder rights such as proposal rights and voting rights on their behalf.
If shareholder rights are solicited in accordance with the provisions of the preceding paragraph, the solicitor shall disclose the solicitation documents, and the listed company shall cooperate.
It is prohibited to publicly solicit shareholder rights through paid or disguised paid means.
If the public solicitation of shareholder rights violates laws, administrative regulations, or relevant provisions of the securities regulatory authority under the State Council, resulting in losses to the listed company or its shareholders, it shall bear compensation liability in accordance with the law.
Article 91: A listed company shall specify in its articles of association the specific arrangements and decision-making procedures for distributing cash dividends, and safeguard the asset income rights of shareholders in accordance with the law.
If a listed company has a surplus after offsetting losses and withdrawing statutory reserves from its after tax profits for the current year, it shall distribute cash dividends in accordance with the provisions of the company's articles of association.
Article 92: For the public issuance of corporate bonds, a bondholders' meeting shall be established, and the procedures for convening the bondholders' meeting, meeting rules, and other important matters shall be explained in the prospectus.
For the public issuance of corporate bonds, the issuer shall hire a bond trustee for the bondholders and enter into a bond trustee agreement. The trustee shall be appointed by the underwriting institution of this issuance or other institutions recognized by the securities regulatory authority under the State Council. The bondholders' meeting may decide to change the trustee of the bonds. The bond trustee shall be diligent and responsible, fulfill the trustee's duties fairly, and shall not harm the interests of bondholders.
If the bond issuer fails to repay the principal and interest of the bond on time, the bond trustee may accept the commission of all or part of the bondholders to initiate or participate in civil litigation or liquidation procedures on behalf of the bondholders in their own name.
Article 93: If an issuer causes losses to investors due to fraudulent issuance, false statements, or other major illegal activities, the controlling shareholder, actual controller, or relevant securities company of the issuer may entrust an investor protection agency to reach an agreement with the investors who have suffered losses on compensation matters and provide advance compensation. After the initial compensation, the issuer and other joint and several liable parties may be pursued for compensation in accordance with the law.
Article 94: In case of disputes between investors and issuers, securities companies, etc., both parties may apply for mediation to the investor protection institution. If a securities business dispute arises between an ordinary investor and a securities company, and the ordinary investor requests mediation, the securities company shall not refuse.
Investor protection agencies may support investors in filing lawsuits with the people's court in accordance with the law for actions that harm the interests of investors.
If the directors, supervisors, and senior management of the issuer violate laws, administrative regulations, or the company's articles of association while performing their duties and cause losses to the company, or if the controlling shareholder or actual controller of the issuer infringes on the legitimate rights and interests of the company and causes losses to the company, the investor protection institution may file a lawsuit in its own name for the benefit of the company with the people's court, and the shareholding ratio and shareholding period are not limited by the provisions of the Company Law of the People's Republic of China.
Article 95: When an investor files a civil compensation lawsuit for false statements or other securities, if the subject matter of the lawsuit is of the same type and there are many parties involved, a representative may be elected in accordance with the law to conduct the lawsuit.
For lawsuits filed in accordance with the provisions of the preceding paragraph, if there may be numerous other investors with the same litigation request, the people's court may issue a public notice to explain the case situation of the litigation request and notify investors to register with the people's court within a certain period of time. The judgments and rulings made by the people's court shall be effective for the investors participating in the registration.
Investor protection institutions, entrusted by more than fifty investors, may participate in litigation as representatives and register the rights holders confirmed by securities registration and settlement institutions with the people's court in accordance with the provisions of the preceding paragraph, except for investors who explicitly express their unwillingness to participate in the litigation.
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