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CSRC Finalises Amendments to Corporate Governance Rules for Securities Companies  

18 December 2012

On 14 December 2012, the CSRC released its new Corporate Governance Rules for Securities Companies (《证券公司治理准则》, the “Rules”), which will become effective on 1 January, 2013. The provisions of the Rules are largely identical to the consultation draft issued in September this year (Please refer to our Alert of 5 September 2012), with limited exceptions.


Key changes from the consultation draft include:

  • Restriction on provision of financing or guarantees to shareholders: The Rules remove the provision contained in the consultation draft restricting securities companies from directly or indirectly providing financing or guarantees for the capital contribution by its shareholders. However, the deletion does not in practice change the current status given that securities companies are generally prohibited from providing financing or guarantees to their shareholders or to a shareholder’s related parties under the PRC Securities Law.
  • Right to nominate supervisors: In the consultation draft, shareholders who had nominated more than half of the directors were not allowed to nominate supervisors. In contrast, the Rules allow shareholders who have nominated half or more of the directors to nominate supervisors, provided that the number of the supervisors nominated by such shareholders does not exceed one third of the total members of the board of supervisors.
  • Minority shareholder right to nominate independent directors: The Rules raise the shareholding threshold entitling shareholders to nominate independent directors from one per cent. to three per cent (in each case, individually or jointly).
  • Detailed board meeting procedural rules: Where related-party transactions are considered at a board meeting, a majority of all unrelated directors must attend the meeting, and relevant matters must be approved by the majority of all unrelated directors. Where the number of unrelated directors attending the relevant board meeting is less than three, the matters must be submitted to a shareholder meeting for consideration. This new requirement is consistent with the similar requirement under PRC Company Law in the case of companies limited by shares.

ReferenceRules for Corporate Governance of Securities Companies (证券公司治理指引准则)

Issuing authority: The China Securities Regulatory Committee (the “CSRC”)

Any queries can be forwarded to Fang Jian, Annabella Fu or your usual Linklaters contacts.

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