Breaking News! Restrictions on CPA Firms' Securities Business Qualifications Are Lifted!

    In the past, accountants engaging in securities business had to obtain approval from the China Securities Regulatory Commission (CSRC).

    Now, in the soon-to-be-passed third review draft of the Securities Law, this restriction is to be removed!

    From now on, all accounting firms will be able to compete fairly!

    Chapter X – Securities Service Institutions (accounting firms, law firms, asset appraisal institutions, etc.) in this draft amendment to the Securities Law for public consultation has undergone significant changes. The main changes are as follows:

1. The requirement for the CSRC and relevant departments to approve securities service institutions engaging in securities and futures business is abolished!!

    Delete Article 169 of the original Securities Law: Investment consulting institutions, financial advisory institutions, credit rating institutions, asset appraisal institutions, and accounting firms engaged in securities service business must be approved by the securities regulatory authority under the State Council and relevant departments.

    The management measures for investment consulting institutions, financial advisory institutions, credit rating institutions, asset appraisal institutions, and accounting firms engaged in securities service business shall be formulated by the securities regulatory authority under the State Council and relevant competent departments.

    New Article 170 added to the amended Securities Law: Accounting firms, law firms, and institutions engaged in securities investment consulting, asset appraisal, credit rating, financial advisory, and information technology system services shall act diligently and fulfill their duties, providing services for securities trading and related activities in accordance with relevant business rules.

2. New restrictive provisions on the practice of securities service institutions are added. Securities service institutions (accounting firms, law firms, asset appraisal institutions, etc.) that have received administrative penalties from the CSRC in the last three years are not allowed to engage in securities service business.

New Article 171 added to the amended Securities Law: Those who fall under any of the following circumstances shall not engage in securities service business:

(1) Having received major administrative penalties or criminal penalties for securities violations in the last three years, or having other serious adverse integrity records;

(2) Being subject to regulatory measures imposed by the securities regulatory authority under the State Council that reject or review documents issued by them, or regulatory measures restricting business, which are still in the enforcement period;

(3) Having fewer employees than the prescribed number;

(4) Other circumstances prescribed by the securities regulatory authority under the State Council.

3. New Article 225 added to the amended Securities Law: If documents produced or issued by a securities service institution contain false records, misleading statements, or major omissions, the business income shall be confiscated, a fine of not less than one time and not more than five times the business income shall be imposed, and the directly responsible persons shall be fined not less than RMB 100,000 and not more than RMB 1,000,000.

Source: Xiaoduo Financial Services (shalldo_sh), M&A Circle SHARE