Chinese law spells out rules for the operation of securities
firms, but it is less clear on what happens when a firm runs into financial
difficulty. What happens to Chinese securities firms when they go under? China
Southern Securities, Hantang
Securities, China Eagle Securities, Asia Securities, Min'an Securities, Wuhan
Securities, and Northern Securities have all entered bankruptcy liquidation in
the past few years, but few of them have completed the process, reports 21st Century Business Herald.
 
China's
Bankruptcy Law and Civil Litigation Law spell out a process for enterprises to
repay their debts when they declare bankruptcy, but neither gives any specific
rules for how to handle the bankruptcy of financial institutions. According to
an analysis given by a securities firm employee, the China Security Regulatory
Commission does have a clear standard procedure for bankruptcies – an
administrative liquidation – even though it isn't specifically encoded in the
law.
 
The CSRC will first find a

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