Article 2 The regulations apply to state-owned equity transfer conducted through auction adopted by the equity transaction institution.
Article 3 The parties in activities of auction shall abide by the relevant laws and administrative rules and regulations and adhere to the principles of openness, fairness, justness and good faith.
Article 4 The bidder mentioned herein refers to the intended transferee submitting application for accepting the transfer and acquires eligibility confirmation during the equity transfer information release and the auction announcement period.
A vendee refers to a bidder who purchases an object of auction at the highest price.
An auctioneer refers to a corporate legal entity that is recognized by the equity transaction institution and that is eligible for auction.
The above principals shall comply with the equity transaction market rules.
Article 5 The auction of the equity transfer shall be organized, coordinated, supervised, guided, and implemented by the equity transaction institution.
Article 6 The transferor shall, before the equity transaction institution accepts the application for accepting the transfer, sign a commission contract jointly with the auctioneer and the broker member of the said institution, and shall submit the contract to the said institution for record.
In such a contract, the following particulars shall be specified:
(A) Name or title and address of the transferor, the broker member, and the auctioneer;
(B) Name, quantity and other basic information of the auction target;
(C) Time and place of the auction;
(D) Commission, method and term of payment;
(E) Method and term of payment of the transaction price;
(F) Liabilities for default; and
(G) Other agreed-upon matters.
Article 7 The transferor shall, through a broker member, propose the application for equity transfer information release, submit the application, equity transfer announcement and other related appendixes, and entrust the equity transaction institution to publish the equity transfer information.
The transferor shall be responsible for the authenticity, integrity, and validity of the materials.
The entrusted broker member shall verify the transfer target and the materials provided by the transferor.
Article 8 The auctioneer in charge of the auction shall, in accordance with the relevant contents of the said application and the announcement, prepare an auction announcement, which shall generally contain the following items:
(A) Auction announcement period;
(B) Auction target;
(C) Time and place of the exhibition or inquiry of the auction target;
(D) Procedures for handling bidder registration and the deadline;
(E) Time and place of the auction;
(F) Auction rules and instructions; and
(G) Special issues concerning the auction.
The auctioneer shall review whether the materials provided by the transferor conform to the auction requirements and whether there are possible legal risks on the auction target, and shall disclose in the auction announcement.
Article 9 The equity transaction institution shall review the equity transfer announcement, auction announcement, and other relevant materials provided by the broker members and auctioneer. Upon compliance, the said institution shall publish the equity transfer announcement in economic or financial newspapers and journals released above the provincial level as well as on the website of the equity transaction institution; the auctioneer shall at the same time publish the equity transfer announcement in the newspapers and journals recognized by the said institution as well as on the website of said institution.
The auction announcement and the equity transfer announcement shall be published at the same time, in which the deadline of the bidder registration shall be inconsistent with that released in the equity transfer announcement.
Article 10 During the transfer information release period, the intended transferor may inquiry into relevant materials of the equity transfer through its entrusted broker member. The transferor, the broker member, and the auctioneer shall, prior to the auction, display the auction target or organize the intended transferees to make a survey, and assist the intended transferees to inquiry into relevant information.
Article 11 The intended transferees shall, during the period set forth in the equity transfer announcement and the auction announcement, work with their entrusted broker members to fulfill bid registration procedures with the auctioneer, and submit application for accepting the equity transfer through their entrusted broker members.
Article 12 The intended transferees shall be responsible for the authenticity, integrity, validity of the materials.
The entrusted broker members shall conduct due diligence of the credit standing of the intended transferees, verify the authenticity, integrity, validity, and compliance of the materials submitted by them, and issue verification opinions.
Article 13 The auctioneer shall specify auction rules and requirements to the intended transferees when accepting bid registration.
The auctioneer shall, within two working days after the deadline of the bid registration, give notice of relevant auction information to the equity transaction institution, and forward relevant materials of the transferee registration to the said institution.
Article 14 The equity transaction institution shall, in accordance with relevant procedures for eligibility confirmation, confirm the bidder eligibility of the intended transferees, and give written confirmation results to the intended transferee, the transferor, and the auctioneer.
Article 15 Where two or more eligible bidders are solicited for the equity transfer project through auction during the information release period, the auctioneer shall chair the auction.
Where only one eligible bidder is solicited for the equity transfer project through auction during the information release period, the auctioneer will conduct no auction, and the equity transaction institution shall organize the equity transactions in accordance with the stipulations set forth in the transfer announcement.
Where no eligible bidder is solicited for the equity transfer project through auction during the information release period, the equity transaction institution shall, in accordance with the stipulations set forth in the transfer announcement, extend information release period or terminate equity transactions.
Article 16 Bidders shall, within three working days after the eligibility confirmation, pay transaction deposit in full, obtain bidding paddle, and obtain legitimate bidder eligibility. The deposit shall generally not be more than 30% of the listed price.
Bidders failing to pay transaction deposit within the stipulated period will lose bidder eligibility.
Article 17 The bidders may participate in the auction at their sole option, and may also entrust agents. Where a bidder has entrusted a broker member, it shall participate in the auction together with the broker member.
Where the agent participates in the auction, the power of attorney signed by the bidder and the carbon copies of the ID certifications of the bidder and its agent shall be presented. The power of attorney shall contain the name or the title of the agent, agency matter, authority, and deadline.
Article 18 In the auction process, one a bidder offers or bids, it shall be irrevocable, and lose binding effect when other bidders offer higher prices.
Article 19 When the highest offer is confirmed by the auction master by knocking the gavel or any other way of public confirmation, the auction transaction is concluded.
Article 20 When an auction sale is under way, minutes of auction shall be made and signed by the auction master and the recorder, as well as the vendee or its agent if a transaction is concluded.
Article 21 After a transaction is concluded, the vendee and the auctioneer shall affix a written confirmation, and shall, through its entrusted broker member, sign an equity transaction contract with the transferor, and fulfill relevant procedures for equity transfer.
The equity transaction institution shall review the transaction contract.
Article 22 The auctioneer shall properly keep the complete set of auction notes and other relevant materials, and submit to the equity transaction institution for record.
Article 23 The settlement of transaction deposit and transaction price shall be based on relevant regulations on the settlement of equity transaction capital through the accounts designated by the equity transaction institution.
The transaction deposit paid by the vendee may be transferred as transaction price. The transaction deposits of other bidders shall, within three working days upon conclusion of the auction, refund original amount in the original channel.
Article 24 The equity transaction institution shall, in accordance with the review information and settlement of transaction price, issue equity transaction receipts.
Article 25 In the process of hosting equity transactions through caution, the auctioneer shall accept the guidance given by the equity transaction institution, and observe auction-related laws and regulations, and equity transaction-related provisions and occupational regulations.
Where the transferor, bidders, vendee, auctioneer, and broker member violate laws and regulations in the auction of the equity transactions, the regulatory body shall, in accordance with relevant regulations, investigate into the liabilities of the part in fault.
Where the vendee fails to obtain the auction target as stipulated, the transferor and the auctioneer shall be liable. Where the bidder waives to accept the transfer after being recognized as the vendee, the vendee shall be liable for breach.
Article 26 The regulations come into force as of the date of promulgation.