China Securities Regulatory Commission, Questions Relevant to Providing Sales Agency Services to Open-ended Funds by Securities Companies Circular

Issued: July 1 2002
Effective: as of date of issue

Main contents: The Circular supplements the Pilot Projects for Open-ended Securities Investment Funds Procedures by specifying additional requirements securities companies shall meet in order to provide sales agency services to open-ended funds. These requirements include a good compliance record in the last one year, a sound management system for fund holder accounts and fund accounts, adequate technical support, and formulation of a risk management system and emergency measures (Section Two). The Circular also specifies the documents to be submitted to the China Securities Regulatory Commission (CSRC) by securities companies in applying for open-ended funds sales agency business (Section Three). CSRC may conduct on-site inspection on the applicants (Section Four). Securities companies that are approved for such business shall file their sales agency agreements, comments of fund management companies on their sales agency services and related business particulars with CSRC (Section Six).
Related legislation: Pilot Projects for Open-ended Securities Investment Funds Procedures, Oct 8 2000, CLP 2000 No.10 p35; Administration of Clients' Transaction Settlement Funds Procedures, May 16 2001, CLP 2001 No.5 p9 and Regulation of the Operation of Securities Investment Funds Guiding Opinion No.2