Legal basis: Securities Law of People's Republic of China (PRC).
Article 118 To establish a securities company, the following conditions shall be met and approved by the securities regulatory authority of the State Council: (1) Having a company's articles of association in compliance with laws and administrative regulations; (2) The major shareholders and actual controllers of the company are in good financial condition, with good credit records, and have no record of major violations of laws and regulations in the last three years; (3) Having the registered capital of the company that meets the requirements of this Law; (4) Directors, supervisors, senior managers and employees meet the requirements as prescribed in this Law; (5) Having a sound risk management and internal control system; (6) Having qualified business premises, business facilities and information technology systems; (seven) other conditions stipulated by laws and administrative regulations and approved by the the State Council securities regulatory authority. Without the approval of the State Council securities regulatory authority, no unit or individual may engage in securities business activities in the name of a securities company.
Article 119 The the State Council securities regulatory authority shall, within six months from the date of accepting the application for the establishment of a securities company, conduct a review in accordance with legal conditions and procedures and the principle of prudent supervision, make a decision on approval or disapproval, and notify the applicant; If it is not approved, it shall explain the reasons. If the application for the establishment of a securities company is approved, the applicant shall apply to the company registration authority for registration of establishment and obtain a business license within the prescribed time limit. A securities company shall, within 15 days from the date of obtaining the business license, apply to the securities regulatory authority of the State Council for a license to operate securities business. A securities company may not engage in securities business without obtaining a license to engage in securities business.