9. Plans for the business settlements that cannot be conducted by foreign-shared securities companies in accordance with law;

10. Legal opinions written by law firms within the territory of China; and

11. Other documents as required by the CSRC.

Article 20 The CSRC shall examine the application documents proscribed by the preceding article in accordance with the relevant law, administrative regulations and the present Rules, make the decision to approve or disapprove the application within the stipulated time limit, and inform the applicant in written form. For those not approved, explanation of written form shall be issued.

Article 21 Within six months from the day when the CSRC issued the document of approval, the securities companies that receive approvals for changes shall handle the matters of shares transfer or capital increase, clean up the business that cannot be operated by foreign-shared securities companies, and shall apply to the administration departments for industry and commerce for the registration of business alteration and acquire new business license by turning in the original one.

Article 22 Within 15 workdays from the day of the registration of change, a securities company that receives approvals for change shall submit the following documents to the CSRC and apply for a new License for Securities Business:

1. Duplicate copies of the business license;

2. The articles of association of the foreign-shared securities company;

3. The original license for securities business and its duplicate copies;

4. Capital verification report written by accounting firms resided within the territory of China and qualified for securities-related business;

5. Report on the business settlements that can't be operated by foreign-shared securities companies in accordance with law;

6. Legal opinions and verification report on the aforesaid business settlements written by law firms accounting firms qualified for securities-related businesses that are resided in the territory of China and; and

7. Other documents as required by the CSRC.

Article 23 The CSRC shall examine the application documents stipulated in the preceding article in accordance with the relevant law, administrative regulations and the present Rules, and shall make the decision on whether to approve it within 15 workdays from the day when the application documents meeting the requirements are received. For those meeting the conditions, the new License for Securities Business shall be granted to them; and for those not meeting the conditions, no new license may be granted, and explanation of written form shall be issued.

Article 24 A securities company newly set up or going on to exist after the merger of foreign-shared securities companies or the merger of foreign-shared securities companies and domestic-funded securities companies shall meet the conditions for establishment of foreign-shared securities company prescribed in the present Rules; and its business scope, proportion of the shares or equities held by foreign shareholders shall be in accordance with the provisions of the present Rules.

The business scope and the proportion of the shares or equities held by the foreign shareholders shall comply with the provisions of the present Rules if there are foreign shareholders in a securities company set up upon the split-up of a foreign-shared securities company.

Article 25 Foreign investors may hold the shares of a listed domestic-funded securities company through buying securities from the stock exchanges or through setting up a strategic cooperative relation with the listed domestic-funded securities company upon acquiring an approval of the CSRC; the approved business scope of that listed domestic-funded securities company shall not be changed. The listed domestic-funded securities company shall not be restricted by the proportion that at least one domestic shareholder holds one third or more of the total shares when the controlling shareholder is a domestic one.

The investor shall be in compliance with the conditions provided for in Article 7 of the present Rules, and abide by Article 129 of the Securities Law if a foreign investor holds 5 percent or more of the shares of a listed domestic-funded securities company through purchasing securities from the stock exchanges or holding shares jointly with others by entering agreements or any other arrangements.

The proportion of the shares of a listed domestic-funded securities company held (including both directly held and indirectly controlled) by a single foreign investor shall not be more than 20 percent; and the proportion of the shares of a listed domestic-funded securities company held (including both directly held and indirectly controlled) by all the foreign investors shall not be more than 25 percent.

Article 26 The application documents submitted to the CSRC and the materials reported to the CSRC in accordance with the present Rules shall be in Chinese. The Chinese versions that are in line with the original documents shall be attached if the documents and materials of the foreign shareholders and those issued by the securities regulatory bodies of their home countries or regions or the foreign institutions accepted by the CSRC are in foreign languages.

The CSRC may ask the applicant to make supplementary explanations if the documents and materials submitted by the applicant cannot sufficiently explain the situation of the applicant.

Article 27 The present Rules shall be applied accordingly if investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan hold shares of securities companies.

Article 28 Other relevant provisions of the CSRC shall be prevail to the establishment, alteration, termination, business activities, supervision and management of foreign-shared securities companies if there is no such provisions in the present Rules.

Article 29 The present Rules shall enter into force as of July 1, 2002.

(Source:www.fdi.gov.cn)