Ministry of Finance and Ministry of Labour and Social Security, Administration of Investments by the National Social Security Fund Tentative Measures

Promulgated: December 13 2001
Effective: as of date of promulgation
Applicability: "National Social Security Fund" (NSSF) refers to the assets under the administration of the Management Council of the National Social Security Fund (the "Management Council"). Such assets include the proceeds and equities from disposal of State-owned shares in enterprises, funds appropriated from central government finances and other funds raised with the approval of the State Council and the proceeds from the investment thereof (Article 2).

Main contents: The Management Council shall, for the interest of NSSF, formulate investment strategies, select investment management entities and custodians and conduct financial accounting (Article 6). NSSF investment management entities shall meet the conditions set out in the Measures. They must, among other things, have the qualifications to manage funds as determined by the China Securities Regulatory Commission, paid-up capital of no less than Rmb50 million, at least two years of experience in managing securities investment in the PRC and three years of good compliance record (Article 9). NSSF custodians are commercial banks approved by the Management Council to hold custody of NSSF assets (Article 17). NSSF investment management entities and NSSF custodians must be independent of each other in terms of personnel, financial affairs and assets (Article 26). The NSSF assets may be invested only in bank deposits, treasury bonds and other financial instruments with high liquidity (Article 25). Investments of NSSF assets shall be diversified in accordance with the limits set out in the Measures (Articles 28 to 30). The Management Council shall provide quarterly NSSF financial reports to the Ministry of Finance and the Ministry of Labour and Social Security and annually disclose NSSF assets, profits and cash flow to the public (Article 46).