Article 18 Under any one of the following circumstances, no subsequent public issuance of corporate bonds shall be permitted:

(1) The amount of funds to be raised in the preceding public offering of corporate bonds has not been fully raised;

(2) There are such situations as defaults or delayed payments of the principal and interest on the publicly-issued corporate bonds or other debts and the situations still exist; and

(3) The stated purposes of use of the funds raised from public issuance of corporate bonds are diverted in violation of the provisions of this Law.

Article 19 The ways of preparing and presenting the application documentations for issuers applying for examination and approval of securities issuance pursuant to law shall be prescribed by the authorities or departments responsible for such examination and approval pursuant to law.

Article 20 The application documents of securities issuance submitted by an issuer to the securities regulatory authority under the State Council or the department authorized by the State Council must be truthful, accurate and complete.

The securities service institutions and their staff members that certify relevant instruments to endorse securities issuance must strictly perform their statutory duties and guarantee the truthfulness, accuracy and completeness of the instruments so certified.

Article 21 Where an issuer applies for public issuance of shares for the first time, it shall make a preliminary disclosure of the relevant documents pursuant to the rules of the securities regulatory authority under the State Council after submitting its application documents.

Article 22 The securities regulatory authority under the State Council shall establish an issuance examination commission which shall, pursuant to law, examine the applications for share issuance.

The issuance examination commission shall be composed of professionals from the securities regulatory authority under the State Council and specialists engaged from outside, who shall decide by vote on an application for share issuance and offer their opinions after examination.

The specific measures for the formation of the issuance examination commission, the term of office of its members and its operational procedures shall be prescribed by the securities regulatory authority under the State Council.

Article 23 The securities regulatory authority under the State Council shall be in charge of the examination and approval process in respect of the applications for share issuance in accordance with the statutory conditions. The procedures for examination and approval shall be made public and supervised pursuant to law.

The persons involved in the examination and approval process in respect of share issuance applications shall not have any interests to share with the applicants, shall not directly or indirectly accept any gifts from the applicants, shall not hold any shares issued by the applicants whose applications have been examined and approved by them, and shall not have any contact with the applicants in private.

The department authorized by the State Council shall examine and grant the applications for issuance of corporate bonds on the basis of the provisions of the two preceding paragraphs.

Article 24 The securities regulatory authority under the State Council or the department authorized by the State Council shall, within three months from the date of acceptance of application documents for securities issuance, decide in accordance with the statutory conditions and procedures whether to grant or not to grant approval. The time used by an issuer to supplement or to revise the application documents in compliance with the requirements shall not be calculated into the aforementioned three-month period; where it decides not to grant approval, it shall state the reasons.

Article 25 Once an application for securities issuance is approved, the issuer shall, in accordance with the provisions of laws or administrative regulations, release the documents of public offering and solicitation prior to effecting the public issuance of the securities, and place such documents at designated places for public information.

Before the information of a securities issuance is made known to the public pursuant to law, no one who possesses such information shall make public or disclose such information.

No issuer shall issue its securities before the documents of public offering and solicitation are released.

Article 26 Where the securities regulatory authority under the State Council or the department authorized by the State Council finds that the decision it has made on granting approval to the issuance of securities is not in conformity with the statutory conditions or procedures, if the issuance in question has not been effected, it shall revoke the approval and call off the issuance; if the issuance in question has been effected but the listing has not, it shall revoke the decision on approval, and the issuer shall return the proceeds to the holders of the securities at the offering price plus the interest at the equivalent bank deposit rate for the corresponding period; the sponsor shall be jointly and severally liable together with the issuer, unless the former can establish a lack of fault on its part; and the controlling shareholders or the persons in practical control of the issuer at fault shall be jointly and severally liable together with the issuer.

Article 27 After completion of share issuance pursuant to law, any changes in the business and earnings of the issuer shall be taken care of by the issuer itself, whereas the investment risks resulting from such changes shall be borne by the investors themselves.

Article 28 Where an issuer is to issue securities to non-specific persons, which according to laws or administrative regulations should be underwritten by a securities company, the issuer shall enter into an underwriting agreement with the securities company. Securities underwriting business may be conducted on an agency basis or a principal basis.

A securities underwriting on an agency basis refers to such a situation where the underwriting securities company sells the securities for account of the issuer and returns all the unsold securities to the issuer at the end of the underwriting period.

A securities underwriting on a principal basis refers to such a situation where the securities company, according to the underwriting agreement, purchases all of the securities to be offered by the issuer, or purchases all of the unsold securities of the issuer at the end of the underwriting period.

Article 29 An issuer that is to issue securities publicly shall have the right to make its own decision in selecting securities companies for underwriting pursuant to law. Securities companies shall not employ any means of illegitimate competition in soliciting securities underwriting business.

Article 30 To underwrite securities, a securities company shall enter into to an agreement of underwriting on an agency basis or an agreement of underwriting on a principal basis with the issuer, specifying the following matters:

(1) the names and domiciles of the parties and the names of their legal representatives;

(2) the types, quantities, amounts of money and offering prices of the securities underwritten on an agency basis and on a principal basis respectively;

(3) the period of underwriting on an agency basis or a principal basis and the starting and ending dates thereof;

(4) the methods of payment of subscription money for underwriting on an agency basis or on a principal basis and the dates thereof;

(5) the fees for underwriting on an agency basis or on a principal basis and the settlement methods thereof;

(6) the liabilities for breach of agreement; and

(7) such other matters as may be so prescribed by the securities regulatory authority under the State Council.

Article 31 For underwriting securities, a securities company shall check the offering and solicitation documents for public issuance as to their truthfulness, accuracy and completeness; it shall not carry out any sales activities if it finds any false entries, misleading statements or major omissions therein; and in the event that the sales activities thereof have already begun, such activities must be suspended immediately and remedial measures must be taken accordingly.

Article 32 Where the overall face vale of securities to be issued to non-specific persons exceeds 50 million yuan, the underwriting thereof shall be conducted by an underwriting syndicate. An underwriting syndicate shall be composed of the securities companies acting as lead-underwriters and the others as participating underwriters.

Article 33 The longest allowable duration for underwriting securities on an agency basis or on a principal basis shall not exceed 90 days.

During the periods of underwriting on an agency basis or on a principal basis, a securities company shall ensure that the securities so underwritten first go to the subscribers and shall not pre-allot the securities underwritten on an agency basis to itself, or purchase in advance and retain the securities underwritten on a principal basis itself.

Article 34 Where an issuer offers shares at a premium, the offering price thereof shall be determined through negotiation between the issuer and the securities underwriting companies.

Article 35 Where shares are offered through underwriting on an agency basis, if the shares actually sold to investors are less than 70% of the shares intended to be publicly issued by the end of the underwriting period, the offering shall be deemed a failure. The issuer shall return the proceeds to the subscribers of the shares at the offering price plus interest at the equivalent bank deposit rate for the corresponding period.

Article 36 At the expiration of the period of time for publicly offered shares underwritten on an agency basis or on a principal basis, the issuers shall, within the prescribed time limit, submit a report accounting for the share issuance to the securities regulatory authority under the State Council for the record.