Ministry of Justice and two other ministries: Sponsorship services and audit services can be charged in stages, and the listing result cannot be used as a condition for fees.

According to the news from the Ministry of Justice on August 16, the Ministry of Justice, together with the Ministry of Finance and the China Securities Regulatory Commission, drafted the "Regulations of the State Council on Standardizing the Services Provided by Intermediary Institutions for Companies' Public Offering of Stocks (Draft for Soliciting Opinions)." The draft for soliciting opinions points out that securities companies engaged in underwriting business can charge service fees in stages according to the progress of work, but whether to charge fees and how much to charge should not be based on the result of the stock public offering listing. Securities companies engaged in underwriting business should comply with the regulations of the state and industry regulators, and charge service fees based on a comprehensive evaluation of project costs and other factors. Accounting firms conducting auditing services can charge service fees in stages according to the progress of work, but whether to charge fees and how much to charge should not be based on the results of auditing work or the listing of stocks. Full text as follows: Regulations of the State Council on Standardizing the Services Provided by Intermediary Institutions for Companies' Public Offering of Stocks (Draft for Soliciting Opinions) Article 1: In order to standardize the related services for public offering of stocks, improve the quality of listed companies, protect the legitimate rights and interests of investors, and promote the healthy development of the capital market, these regulations are formulated. Article 2: Securities companies, accounting firms, law firms, and other institutions (hereinafter referred to as intermediary institutions) providing services for companies' public offering of stocks within the territory of the People's Republic of China are subject to these regulations. Article 3: When intermediary institutions provide services for companies' public offering of stocks, they should follow the principles of honesty, diligence, independence, objectivity, and should have qualified personnel with corresponding qualifications, possess relevant professional capabilities, and establish effective risk control systems such as examining conflicts of interest. Article 4: Intermediary institutions shall not falsify documents, make misleading statements, or have significant omissions in the documents they produce. Intermediary institutions shall not assist companies that do not meet the statutory conditions to issue stocks by participating in financial fraud, fraudulent issuances, or non-compliant information disclosure. Article 5: Intermediary institutions should adhere to market principles, reasonably determine fee standards based on actual workload, required resource inputs, and other factors, and specify fee arrangements in contracts with the issuer. Article 6: Securities companies engaged in underwriting business may charge service fees in stages according to the progress of work, but whether to charge fees and how much to charge should not be based on the result of the stock public offering listing. Securities companies engaged in underwriting business should comply with the regulations of the state and industry regulators, and charge service fees based on a comprehensive evaluation of project costs and other factors. Article 7: Accounting firms conducting auditing services may charge service fees in stages according to the progress of work, but whether to charge fees and how much to charge should not be based on the results of auditing work or the listing of stocks. Article 8: Law firms providing services for companies' public offering of stocks shall unify their fees and shall not violate relevant regulations on legal service fees by judicial administrative departments or other related departments. Article 9: Intermediary institutions and their personnel shall not engage in the following activities: (1) Charging additional fees beyond the contract or raising fees in a disguised manner through temporary price increases; (2) Evading regulatory fees through supplementary agreements or separate arrangements; (3) Seeking unjust benefits through shareholding or obtaining listing bonuses; (4) Other acts of charging fees in violation of national regulations or in a disguised manner. Article 10: Local governments at all levels shall not award issuers or intermediary institutions based on the result of the stock public offering listing. Article 11: Issuers shall detail various types of intermediary service contract fee standards, amounts, payment arrangements, etc., in the prospectus or other relevant information disclosure documents submitted when applying for a public offering of stocks. Article 12: The relevant departments of the State Council such as securities supervision, finance, and judicial administration shall strengthen supervision of the professional practices of intermediary institutions according to their respective responsibilities; if necessary, joint on-site inspections and other measures may be taken to investigate and deal with illegal and non-compliant behaviors. Article 13: Intermediary institutions that violate these regulations shall be punished according to relevant laws. Where no such laws exist, the securities supervision, finance, judicial administration, and market supervision departments of the State Council shall order corrections, issue warnings, confiscate illegal gains; in cases of serious circumstances or failure to correct, fines of more than 1 time but less than 10 times the illegal gains shall be imposed, or fines of more than 100,000 yuan but less than 1 million yuan for cases where there are no illegal gains or the illegal gains are less than 100,000 yuan, warnings shall be given to the directly responsible executives and other responsible personnel, with fines of more than 100,000 yuan but less than 1 million yuan. Intermediary institutions' personnel violating the provisions of Article 9 of these regulations shall be punished according to relevant laws. Where no such laws exist, the securities supervision, finance, judicial administration, and other departments of the State Council shall order corrections, issue warnings, confiscate illegal gains; in the case of serious circumstances or failure to correct, fines of more than 1 time but less than 10 times the illegal gains shall be imposed, or fines of more than 100,000 yuan but less than 1 million yuan for cases where there are no illegal gains or the illegal gains are less than 100,000 yuan, and suspension of relevant business for 1 month to 1 year shall be imposed. Article 14: Issuers violating the provisions of Article 11 of these regulations shall be ordered to correct by the securities supervision and regulatory authority of the State Council and warned; in cases of serious circumstances or failure to correct, fines of more than 100,000 yuan but less than 1 million yuan shall be imposed, warnings shall be given to the directly responsible executives and other responsible personnel, with fines of more than 100,000 yuan but less than 1 million yuan. Issuers' controlling shareholders, actual controllers who organize, direct, or conceal relevant matters leading to the above situations shall be fined more than 100,000 yuan but less than 1 million yuan; warnings shall be given to the directly responsible executives and other responsible personnel, with fines of more than 100,000 yuan but less than 1 million yuan. Article 15: The securities supervision and regulatory authority of the State Council shall incorporate the compliance of intermediary institutions with these regulations into the integrity files of the securities market in accordance with the law. Article 16: Where local governments violate the provisions of Article 10 of these regulations by awarding issuers or intermediary institutions, rewards shall be recovered and responsible leaders and personnel shall be subject to disciplinary action according to law by the relevant departments. Article 17:If intermediary agencies provide services for the public issuance of depositary receipts and convertible corporate bonds, they shall be subject to the provisions of these regulations.Article 18 The State Council departments of securities supervision and management, finance, judicial administration, and other departments may formulate implementation measures in accordance with these provisions. Article 19 These provisions shall come into effect on (specific date and year). This article is excerpted from the Ministry of Justice, GMTEight editor: Chen Wenfang.