The new regulations for law firms to engage in ** business came into effect on December 1.
In November, some law firms were fined. According to the CSRC's fines, some law firms "have problems such as poor quality legal opinions and major omissions, non-standard and incomplete preparation and preservation of practice working papers". Some law firms "made inaccurate statements in individual legal opinions, using vague wording of 'not found'." Failure to conduct necessary verification and verification of the issuer's external guarantees, litigation and arbitration, etc."
December 1 is an important time node for law firms engaged in ** business. The newly revised Measures for the Administration of Law Firms Engaging in ** Legal Business came into effect on December 1. The new regulations expand the scope of business engaged by law firms, delete the provisions on linking case filing and investigation with business acceptance and review, and improve the provisions on the supervision of legal services.
2 law firms were fined.
Recently, the China Securities Regulatory Bureau issued the "Decision on Issuing Warning Letters to Beijing Kaiyu Law Firm, Zhang Changying, and Xue Feng".
After investigation, the CSRC found that in the practice of "Lhasa City Construction Investment and Operation *** Public Issuance of Corporate Bonds to Professional Investors in 2022", there were problems such as the inadequate implementation of the risk control system, the failure of practicing lawyers to fully perform their inspection obligations in the course of practice, the poor quality of legal opinions and major omissions, and the non-standard and incomplete production and preservation of practice working papers.
According to the CSRC, the above issues do not comply with the provisions of Articles 3, 12, 14, 18, 21 and 23 of the Administrative Measures for Law Firms Engaging in ** Legal Business, and Articles 7, 9, 13, 15, 29, 35, 39 and 41 of the Rules for the Practice of Law Firms' ** Legal Business (for Trial Implementation).
In accordance with the provisions of Article 31 of the Administrative Measures for Law Firms Engaging in Legal Business, the CSRC decided to take supervision and management measures of issuing a warning letter to the firm and relevant lawyers, and recorded it in the integrity file. The firm should conscientiously learn lessons, improve the level of legal practice, take effective measures to effectively rectify, and submit a rectification report to the CSRC within 30 days from the date of receipt of the decision on supervision and management measures.
In addition, in early November, the Qingdao Securities Regulatory Bureau issued the "Decision on Issuing a Warning Letter to Beijing Dacheng Law Firm".
After investigation, the CSRC found that in the process of providing legal services for the non-public issuance of corporate bonds, there were the following problems: First, the individual expressions of the legal opinions were inaccurate, and the vague wording of "not found" was used. Second, the issuer failed to conduct necessary verification and verification on matters such as external guarantees, litigation and arbitration. Third, where the online inquiry method is used for verification and verification, no inquiry record is made.
According to the CSRC, the above acts violated Articles 3, 12, 14 and 21 of the Administrative Measures for Law Firms Engaging in ** Legal Business (Decree No. 41 of the CSRC, hereinafter referred to as the "Administrative Measures"), and Articles 5, 16, 26 and 27 of the Rules for the Practice of Law Firms (Trial) (CSRC Announcement 2010 No. 33).
In accordance with the provisions of Article 31 of the Administrative Measures, the CSRC decided to take administrative supervision measures against the firm by issuing a warning letter. The firm shall strengthen the quality management of lawyers' engagement in legal business, strictly implement the practice norms for law firms engaged in legal business, and submit a written report to the CSRC within 10 days of receiving this decision.
There are new rules for law firms to engage in ** business.
It is important to note that all of the above fines occurred before December 1. From December 1, there are new regulations for law firms to engage in ** business.
It is reported that the "Measures for the Administration of Law Firms Engaging in ** Legal Business" has been deliberated and adopted by the 5th committee meeting of the China ** Supervision and Administration Commission in 2023 on July 28, 2023, and the 3rd ministerial meeting of the Ministry of Justice in 2023 on September 11, 2023, and will come into force on December 1, 2023.
It is reported that in recent years, China's capital market reform has been further promoted, and the level of rule of law in the market has continued to improve, especially the reform of the registration system with information disclosure as the core has put forward new and higher requirements for law firms to engage in first-class legal business, and it is necessary to revise and improve the "Administrative Measures for Law Firms Engaging in First-class Legal Business" to better play the role of law firms as the "gatekeepers" of first-class intermediaries, promote the improvement of the level of first-class legal services, and promote the high-quality development of the capital market.
The revision of the Measures for the Administration of Law Firms Engaging in ** Legal Business mainly involves several aspects.
The first is to expand the field of law firm to engage in the first legal business. The revised New Rules have added the types of relevant businesses in light of the actual situation, including initial public offerings of depositary receipts and listingsInformation disclosure of listed companies and unlisted public companies;Transfer of listed companies on the Beijing ** Stock Exchange, etc. At the same time, the new rules clarify that law firms can organize the drafting of prospectuses.
The second is to delete the provision that the case filing investigation is linked to the business acceptance and review.
Third, improve the provisions on the supervision of legal services. In order to urge law firms to fulfill their responsibilities and safeguard the legitimate rights and interests of investors, the revised new regulations have improved the regulatory provisions on legal services from the following aspects. The first is to add provisions on the filing and management of legal business. The second is to increase the work requirements for law firms to complete verification and verification. Third, it stipulates that law firms shall, in accordance with the requirements of the China Securities Regulatory Commission, regularly report the basic information of engaging in first-class legal business. Fourth, it has supplemented and improved the circumstances under which administrative supervision measures apply.
Finally, the new regulations strengthen the requirements for law firms to establish and improve risk control systems.