China Securities Regulatory Commission, Several Opinions on the Implementation of the «Administration of Clients' Transaction Settlement Funds Procedures» Circular

Issued: October 10 2001

Main contents: The Circular adds details to the Administration of Client's Transaction Settlement Funds Procedures (the Procedures). With regard to the definition of "custodian banks" for the purposes of the Procedures, the Circular says that they include four types of custodian banks. Custodian banks of securities company business departments are banks into which business departments of securities companies deposit their clients' transaction settlement funds; custodian banks of securities company legal persons are banks into which securities company legal persons may deposit their client trading settlement funds; clearing banks are banks through which clearing companies clear and transfer securities transaction funds; and securities company self-account custodian banks are banks where securities companies set up special accounts for their own funds (Part One, Section One). The Circular sets out additional qualification requirements applicable to custodian banks other than securities company business department custodian banks (Part One, Section Two). Specific procedures are also provided when applying for and approving qualifications of custodian banks (Part One, Section Three), as well as for reporting of clients' transaction settlement funds special accounts and self-owned funds accounts to the China Securities Regulatory Commission (Part Two, Sections One to Eight). Provisions dealing with the transfer of funds between clients' transaction settlement funds special accounts and self-owned funds accounts are also stipulated (Part Two, Sections Nine and Ten).
Related legislation: China Securities Regulatory Commission, Administration of Clients' Transaction Settlement Funds Procedures, May 16 2001, CLP 2001 No.5 p9