Circular on Issues Concerning the Succession of Business after the Transformation of Accounting Firms with Securities Qualifications to Special General Partnership of Accounting Firms

Cai Kuai [2012] No. 17

September 14, 2012

The public finance departments (bureaus) of all provinces, autonomous regions and municipalities directly under the Central Government and cities specifically designated in the state plan, Securities Regulatory Commission, State-owned Assets Supervision and Administration Commission, Commissioner's Office of CSRC in Shanghai and Shenzhen, Xinjiang Production and Construction Corps, Shanghai and Shenzhen Stock Exchange, and all enterprises under central management and accounting firms with securities qualifications:

For the purpose of implementing the Circular on the General Office of State Council on Forwarding the Several Opinions on Fastening the Development of Certified Public Accountants in China (Guo Ban Fa [2009] No. 56), encouraging medium and large accounting firms to further optimize organizational form and become bigger and stronger, in accordance with the Circular of Ministry of Finance and China Securities Regulatory Commission on Adjusting the Requirements for Accounting Firms to Apply for Qualifications for Securities-related Business (Cai Kuai [2012] No.2) and the Circular of the Ministry of Finance, State Administration for Industry and Commerce, Ministry of Commerce, State Administration of Foreign Exchange and China Securities Regulatory Commission on Printing and Distributing the Scheme for Localized Transformation of Sino-foreign Accounting Firms (Cai Kuai [2012] No. 8), accounting firms with securities and futures qualifications (hereinafter referred to as "Accounting Firms with Securities Qualifications") shall be completely transformed to the organizational form of special general partnership (or general partnership, same as below). The issues concerning the succession of business after the transformation of accounting firms with securities qualifications to special general partnership of accounting firms are hereby notified as follows:

I. After the transformation of accounting firms with securities qualifications to organizational form of special general partnership, the operating period and performance of the original accounting firm shall be continuously calculated and its practicing and securities qualification extended accordingly and the administrative liabilities that may be incurred to the original accounting firm due to practicing quality shall be undertaken by the special general partnership of accounting firms.

II. The special general partnership of accounting firms after transformation shall continue to perform the business contract of the original accounting firm or renew the business contract with customers. Under this circumstance, such special general partnership of accounting firms shall not be deemed as substitute or newly employed accounting firm and listed companies and central enterprises do not have to come to a resolution on relevant issue by holding a general meeting or performing similar procedures.

III. Where the customers of the original accounting firm is unlisted companies or non-central enterprises, issues concerning the succession of business after transformation to special general partnership of accounting firms shall be handled pursuant to aforesaid provisions.

IV. Issues concerning the succession of business after lawful transformation of other accounting firms without securities qualification to special general partnership of accounting firms shall be handled pursuant to aforesaid provisions.