Trial Measures for the Administration of the Indirect Investment of Insurance Funds in Infrastructure Projects

Article 2: For the purposes of these Measures, the phrase "indirect investment of insurance funds in infrastructure projects" means the act whereby an entrusting party entrusts its insurance funds to an entrusted party and the entrusted party establishes in its own name an investment plan in line with the wishes of the entrusting party, invests in an infrastructure project and manages or disposes of the interests in such plan for the benefit of the beneficiaries or for a specific goal.

Article 3: When an entrusting party invests in the investment plan established by an entrusted party, a custodian shall be engaged to hold the property of the investment plan in its custody. The beneficiaries shall engage an independent supervisor to monitor the management and operation of the investment plan.

Article 4: The entrusting party, entrusted party, beneficiaries, custodian, independent supervisor and other concerned parties involved in an investment plan shall engage in relevant business activities in accordance with the law and, in accordance with these Measures, execute written contracts that specify the rights and obligations of the parties.

Article 5: The investment plan property shall be independent from the property of the entrusted party, the custodian, the independent supervisor and the other natural persons, legal persons or organizations that provide services for management of the investment plan and from the other property under their management. The property and returns obtained by the entrusted party in managing, applying or disposing of the investment plan property or otherwise shall form part of the investment plan property.

Article 6: If the entrusted party, the custodian, the independent supervisor or another natural person, legal person or organization that provides services for management of the investment plan terminates its business and carries out liquidation because it is being dissolved, closed down or declared bankrupt in accordance with the law or due to other reasons, the investment plan property shall not form part of its property to be liquidated.

The claims of the investment plan property may not be set-off against the debts arising from the property of the entrusted party, the custodian, the independent supervisor or the other natural persons, legal persons or organizations that provide services for management of the investment plan. The claims and debts of different investment plan properties may not be setoff against each other.

Other than for the purpose of enforcement in respect of the debts arising under the investment plan, no enforcement measures may be taken against investment plan property.

Article 7: When insurance funds are indirectly invested in an infrastructure project, the principles of safety, profitability, liquidity and matching of assets and liabilities shall be complied with. The entrusting party shall invest carefully and guard against risks. The entrusted party, the custodian, the independent supervisor and the other natural persons, legal persons and organizations that provide services for management of the investment plan shall concientiously carry out their duties and perform their obligations of good faith, prudence and diligence.

Article 8: The China Insurance Regulatory Commission (the CIRC) is in charge of formulating the policies relevant to the indirect investment of insurance funds in infrastructure projects.

The CIRC and the relevant regulatory departments shall regulate in accordance with the law the various concerned parties involved in the indirect investment of insurance funds in infrastructure projects and the related business activities.

PART TWO: INVESTMENT PLAN

Article 9: For the purposes of these Measures, the term 'investment plan' means a financial instrument under which the concerned parties specify their respective rights and obligations in the form of contracts and determine the investment shares, amounts, currency, term, purpose of the funds, payment of the returns and transfer of the rights to the returns, etc.

Article 10: The scope of investment of investment plans shall mainly include transportation, communications, energy, utilities, environmental protection and other such key state-level infrastructure projects.

Investment plans may invest in infrastructure projects by a debt claim, equity, rights in rem or other feasible methods.

Article 11: Infrastructure projects in which investment plans invest shall satisfy the following conditions:

(1) conforming with state industrial policies and relevant policies;

(2) having a feasibility study report and assessment report issued by a professional institution with the highest qualifications certified by the relevant state departments;

(3) having or projected to have a stable cash flow return on investment;

(4) having the capacity to repay the principal and pay returns on schedule or having the capacity to provide lawful and valid security;

(5) having taken out relevant insurance;

(6) the controlling shareholder or main party in control of the project manager (the Owner) is a large enterprise or enterprise group and has no bad credit record;

(7) the Owner has obtained a business permit from the relevant department; and

(8) other conditions specified by the CIRC.

Article 12: An infrastructure project invested in by a debt claim, equity or other feasible method shall, in addition to satisfying the conditions specified in Article 11, satisfy the following conditions:

(1) self-raised funds may not account for less than 60% of the total project budget and such funds have already been paid in;

(2) the Owner's capital may not account for less than 30% of the total project budget and such funds have already been paid in; and

(3) other conditions specified by the CIRC.

Completed projects shall not be subject to the restrictions set forth in the preceding paragraph.

The concerned parties may arrange for the implementation of an infrastructure project in which the investment plan is to invest only after the project has been approved by the State Council or relevant departments.

Article 13: An investment plan may not invest in an infrastructure project:

(1) in which the state has expressly prohibited or restricted investment;

(2) that requires, as specified by the state, a lawful and valid permit but such permit has not yet been obtained;

(3) that poses legal risks, such as one in which the entity is undetermined or ownership is unclear, etc.;

(4) in which the Owner lacks legal personality; or

(5) that is characterized by another circumstance specified by the CIRC.

Article 14: An investment plan shall, at minimum, include the following legal documents:

(1) the investment plan description;

(2) the entrustment contract executed by the entrusting party and entrusted party, which shall, at minimum, specify the investment plan project name, management method, beneficiaries and their rights and obligations, its term of operation, amount, the distribution and payment of the returns on the investment plan property, management expenses and remuneration, the entity liable for losses incurred by the investment plan property and the method of bearing such losses, liability for damages for breach of contract, dispute resolution method, etc.;

(3) the custodian contract executed by the entrusting party and custodian, which shall, at minimum, specify the scope of the custodial property, the allocation of the returns on the investment plan property, fund settlement, accounting and valuation, allocation of expenses, liability for damages for breach of contract, etc.;

(4) the investment contract executed by the entrusted party and Owner, which shall, at minimum, specify the investment amount and term, purpose of the funds and the appropriation method, project management method, term and quality warranty, operation and management, liability for damages for breach of contract, etc.;

(5) the supervision contract executed by the beneficiaries and independent supervisor, which shall, at minimum, specify the scope of the supervision by the independent supervisor, confirmation of the appropriation of funds exceeding the limit, the fund appropriation method, management and operation of the project, supervision of construction quality, liability for damages for breach of contract, etc.;

(6) the charter of the beneficiaries' general meeting; and

(7) other legal documents specified by the CIRC

The contracts specified in Items (2), (3), (4), (5) and (6) of the preceding paragraph shall specify such matters as entrustment, custody, project investment, supervision, etc, in which the other concerned parties are involved.

Article 15: The investment plan description shall, at minimum, specify the following:

(1) the investment and management risks;

(2) the objectives of the investment plan and the basic particulars of the infrastructure project, including the purpose, amount, term and method of repayment of the project funds, the warranty terms, liability for breach of contract, information disclosure, etc.;

(3) the profiles of the concerned parties, including their names, residences, contact methods and their affiliations;

(4) a market analysis and cost analysis of, and a returns forecast for, the infrastructure project to be invested in;

(5) the investment plan business flow, including registration and custodial matters, risks and control measures, liquidity arrangements, distribution of returns and account management;

(6) establishment and termination of the investment plan;

(7) payment of taxes in connection with the investment plan, including the origins of the various tax payments, the payment stages and payment sequence; and

(8) other information specified by the investment plan or by laws, administrative regulations or the CIRC.

A warning on investment and management risks shall be placed in a prominent location in the investment plan description.

Article 16: The concerned parties to the investment plan shall specify in the investment plan the rates for the allocation, and the methods for the calculation and payment of the entrustment management fee, custodial fee and supervision fee, the warranty terms and liability for breach of contract, etc.

Subject to agreement reached by the relevant parties through consultations, the amount of the agreed upon remuneration may be increased or reduced and the provisions on the remuneration amended.

Article 17: The rights to the returns from an investment plan shall be divided into shares of equal monetary value.

A beneficiary may transfer all or part of its rights to the returns. The transferee of the rights to the returns shall be an organization with legal personality. The rights and obligations of the concerned parties shall not change as a result of a transfer of the rights to the returns from such investment plan.

The rules for the demarcation and the transfer of shares of the rights to the returns from investment plans shall be formulated separately by the CIRC following consultations with relevant departments.

Article 18: An investment plan shall terminate if:

(1) a termination event specified in the investment plan occurs;

(2) the continued existence of the investment plan violates the objectives of the investment plan;

(3) the objectives of the investment plan have been achieved or are impossible to achieve;

(4) the investment plan is cancelled or ended;

(5) the concerned parties to the investment plan reach agreement on terminating the same through consultations; or

(6) another circumstance specified in the investment plan or by laws, administrative regulations or the CIRC arises.

Article 19: The entrusted party shall complete liquidation of the investment plan within 90 days of the date of its termination and submit an audited liquidation report to the relevant concerned parties and the regulatory departments.

The beneficiaries, other parties with rights to the investment plan property and the relevant concerned parties to the investment plan shall give their comments within 30 days of receipt of the liquidation report. If no written objections are raised, they shall be deemed to have approved the liquidation report and the entrusted party shall be released from its liability for the matters specified in the liquidation report, unless it has committed an improper act.

Article 20: The concerned parties to an investment plan shall distribute the returns from the investment plan and relevant property in strict accordance with the schedule and procedures specified in the investment plan.

Article 21: If the entrusted party, the custodian or the independent supervisor violates these Measures, causing the investment plan property to incur a loss, it shall bear the attendant liability for compensating the beneficiaries or entrusting party in accordance with the law.

PART THREE: ENTRUSTING PARTY

Article 22: For the purposes of theses Measures, the term 'entrusting party' means an insurance company, insurance group company or an insurance holding company established in the People's Republic of China with the approval of the CIRC.

One or more entrusting parties may invest in an investment plan. An entrusting party may invest in several investment plans.

Article 23: An entrusting party shall satisfy the following conditions:

(1) its internal management and risk control systems complying with the provisions of the Risk Control Guidelines for Utilization of Insurance Funds (Trial Implementation) and the implementation thereof being compliant;

(2) having established project evaluation and risk monitoring systems;

(3) having put in place an investment plan property custody mechanism;

(4) having a certain number of relevant professional investment personnel;

(5) not having a record of a major violation of investment laws or regulations during the most recent three years;

(6) its solvency complying with relevant provisions of the CIRC;

(7) its risk management complying with the relevant provisions of Part Nine hereof; and

(8) other conditions specified by the CIRC.

The entrusting party may authorize an insurance asset management company to exercise relevant rights and perform relevant obligations on its behalf. An insurance asset management company serving as an appointed agent shall comply with the provisions of the preceding paragraph other than Item (6).

Article 24: When an insurance company, insurance group company or an insurance holding company applies to serve as an entrusting party, it shall submit the following application materials to the CIRC:

(1) an investment application;

(2) a feasibility study report on investing in the investment plan;

(3) the resolution on investing in the investment plan adopted by the company's board of directors;

(4) relevant materials on the entrusted party and custodian and the texts of the contracts executed with them;

(5) its internal management, risk control, project evaluation and risk monitoring systems;

(6) information on the establishment of the relevant business department and the key business personnel;

(7) financial statements of the company for the most recent three years audited by an accounting firm;

(8) recommendations on the internal controls and management of the company during the most recent three years issued by an accounting firm; and

(9) other documents and materials specified by the CIRC.

The CIRC shall render its decision on whether or not to grant its approval within 20 days of the date of receipt of the application materials. If it withholds its approval, it shall notify the applicant thereof in writing and explain its reasons.

Article 25: Unless otherwise specified by the CIRC, the investment by an entrusting party in an investment plan shall comply with the following provisions on investment percentages:

(1) the investment balance of a life insurance company may not exceed 5% of the company's total assets at the end of the preceding quarter as calculated using the cost price; the investment balance of a property insurance company may not exceed 2% of the company's total assets at the end of the preceding quarter as calculated using the cost price;

(2) the balance invested in a single infrastructure project by a life insurance company may not exceed 20% of the total budget of the project as calculated using the cost price; the balance invested in a single infrastructure project by a property insurance company may not exceed 5% of the total budget of the project as calculated using the cost price; and

(3) the balance invested by an insurance company from a product account that is independently accounted for may not exceed the percentage specifically provided for in the insurance terms as calculated using the cost price.

Article 26: An entrusting party shall perform the following duties and responsibilities:

(1) considering the feasibility of the project investment, evaluating the investment plan and confirming the investment project;

(2) evaluating the investment plan risks and its capacity to bear the same, and formulating risk prevention measures and a contingency plan;

(3) selecting the entrusted party and custodian, specifying the rights of the beneficiaries and the duties and responsibilities of the independent supervisor;

(4) executing an entrustment contract with the entrusted party, determining the method of managing the investment plan, specifying the entrusted party's management, application and disposal authority and monitoring the entrusted party in the performance of its duties and responsibilities;

(5) executing an investment plan property custodian contract with the custodian and monitoring the custodian in the performance of its duties and responsibilities;

(6) assisting the beneficiaries in executing a supervision contract with the independent supervisor;

(7) specifying the methods for allocating and paying the remuneration of the relevant concerned parties;

(8) regularly keeping itself abreast of management, application, receipt, payment and disposal matters relating to the investment plan property and of information on the construction, management and operation of the project via the relevant concerned parties, and requesting specific explanations therefrom;

(9) requesting that the entrusted party revise its method of managing the investment plan property in accordance with relevant laws, administrative regulations and the investment plan or due to the investment plan not meeting the interests of the beneficiaries as a result of special unforeseen events;

(10) demanding that the entrusted party restore the investment plan property to its original state and give compensation if the investment plan property incurs a loss due to a violation of relevant laws or breach of the investment plan by the entrusted party;

(11) dismissing the entrusted party or custodian in accordance with the investment plan and these Measures if the entrusted party or custodian dispose of investment plan property in breach of the investment plan objectives or if it commits a major fault in managing, applying or disposing of the investment plan property;

(12) preserving the investment accounting books, statements, etc. relating to the investment plan;

(13) subjecting itself to the regulation of the CIRC and submitting to it relevant documents and materials in a timely manner; and

(14) other duties and responsibilities specified in the investment plan or by laws, administrative regulations or the CIRC.

Article 27: An entrusting party may not:

(1) directly invest in infrastructure projects;

(2) invest in an investment plan not examined by the CIRC;

(3) utilize an investment plan to transfer insurance funds in violation of the law;

(4) impede relevant concerned parties in the performance of their duties and responsibilities specified in the investment plan; or

(5) commit another act that is prohibited by the investment plan, laws, administrative regulations or the CIRC.

PART FOUR: ENTRUSTED PARTY

Article 28: For the purposes of these Measures, the term 'entrusted party' means a trust and investment corporation, insurance asset management company, industry investment fund management company or other professional management organization that invests in an infrastructure project in its own name pursuant to an investment plan, based on the wishes of the entrusting party and in the interests of the beneficiaries.

The entrusted party and the custodian or the entrusted party and the independent supervisor may not be the same party and there may not be any affiliation between them.

Article 29: An entrusted party shall satisfy the following conditions:

(1) having the highest qualifications certified by the relevant state regulatory department;

(2) having a sound corporate governance structure, good reputation and scientific management;

(3) having sound internal management, risk control, operating procedure and internal auditing and monitoring systems, and the implementation thereof being compliant;

(4) having a sound system for the evaluation, selection and management of infrastructure projects;

(5) having an independent external audit system and regular audit arrangement;

(6) having a sufficient number of infrastructure project investment management personnel, and the personnel in key positions having extensive professional experience;

(7) having a person in charge of investment plan risk management, and having in place a risk liability determination and liability pursuit system;

(8) the board of directors and senior management personnel having an effective system for monitoring the business personnel and the implementation of the investment plan;

(9) being profitable for the most recent two years in succession;

(10) not having matured but unpaid debts, having failed to perform a matured obligation nor having committed any of violations of laws or regulations, such as misappropriation of entrusted property, etc., during the most recent three years; and

(11) other conditions specified by the CIRC.

Article 30: If a trust and investment corporation is to serve as an entrusted party, it shall, in addition to satisfying the conditions specified in Article 29 hereof, satisfy the following conditions:

(1) having registered capital of not less than Rmb1.2 billion and maintaining at all times net assets valued at not less than Rmb1.2 billion;

(2) having extensive experience in investing in infrastructure projects;

(3) its original deposit type liability business has been completely liquidated, and no new deposit type liabilities have arisen nor has it handled disguised liability business in the form of trusts or in other forms;

(4) the position and liquidity of assets of the business that it operates for its own account are good and comply with relevant regulatory requirements;

(5) three or more years have passed since it completed re-registration; and

(6) other prudential conditions specified by the CIRC.

Article 31: An industry investment fund management company that wishes to serve as an entrusted party shall comply with the conditions specified in Article 29 and Items (1), (2) and (6) of Article 30 hereof.

Article 32: An entrusted party shall submit an application for the establishment of an investment plan and the following documents and materials to the CIRC:

(1) an application for the establishment of the investment plan;

(2) (a duplicate of) its business licence or a valid photocopy of its business licence;

(3) an explanation of the governance of the company;

(4) its internal management, risk control, operating procedure and internal auditing and monitoring systems as well as its infrastructure project evaluation, selection and management systems, including the effective monitoring measures on board of directors and senior management, independent external auditing arrangement, etc.;

(5) the company's financial statements for the most recent three years audited by an accounting firm;

(6) recommendations on the internal controls and management of the company during the most recent three years issued by an accounting firm;

(7) an undertaking by all of the directors of the company that they will perform the entrusted duties and responsibilities;

(8) a list of the names and the r¨¦sum¨¦s of the key business personnel;

(9) all of the legal documents included in the investment plan, and the method of apportioning the rights to the returns from the investment plan;

(10) the feasibility study report for the investment plan and a project evaluation report;

(11) the project proposal for the infrastructure project and the official reply of the relevant department;

(12) a legal opinion on the investment plan issued by a lawyer with experience in the field and who has been practising for at least five years;

(13) a due diligence report; and

(14) other documents and materials specified by the CIRC.

When a trust and investment corporation is to serve as the entrusted party, it shall, in addition to the documents and materials specified in the preceding paragraph, submit relevant documentation evidencing its compliance with the conditions specified in Article 30.

Article 33: The CIRC shall conduct a format review of the completeness of the application materials submitted by the entrusted party from the perspectives of the scale of the assets under its management, corporate governance, credit status, credit rating, management capabilities, internal control systems, project selection for the investment plan, risk control, custodial arrangements, monitoring mechanisms, etc. and issue comments on its review.

Article 34: The relevant contracts executed by the entrusted party with the other concerned parties to the investment plan shall enter into effect only after examination and consent by the CIRC.

Article 35: The entrusted party shall perform the following duties and responsibilities:

(1) investigating the investment project and issuing a due diligence report;

(2) selecting the infrastructure project, and evaluating its investment value and the management and operating risks to which it is exposed;

(3) establishing the investment plan and executing the entrustment contract with the entrusting party;

(4) executing an infrastructure project investment contract with the Owner, which specifies that the Owner undertakes in writing to subject itself to the supervision of the independent supervisor and to provide the facilities for the independent supervisor to effect supervision;

(5) establishing a separate investment plan property bank account for each investment plan;

(6) prudently handling investment plan matters for the greater interest of the beneficiaries and ensuring the safety of the investment plan property;

(7) in a timely manner, issuing project fund appropriation instructions to the custodian within the authorized limit specified in the investment plan; instructions exceeding the authorized limit specified in the investment plan must be approved in writing by the independent supervisor;

(8) in a timely manner, distributing and paying the investment plan returns to the beneficiaries and returning matured investment plan property to the beneficiaries or the entrusting party;

(9) assisting the beneficiaries in handling matters relating to the transfer of their rights to the returns, completing property transfer procedures and notifying the concerned parties thereof in writing;

(10) disclosing investment plan information in a timely manner, accepting inquiries from relevant concerned parties, truthfully providing relevant materials and reporting on the management and operation of the project;

(11) continuously managing, tracking and monitoring the construction or operation of the infrastructure project and requiring the Owner to perform its relevant information disclosure obligations;

(12) preparing management and financial accounting reports for the investment plan;

(13) engaging an accounting firm or other such intermediary organization to audit the management of the investment plan and the operation of the investment project;

(14) preserving complete records of the handling of investment plan matters and the accounting books, statements, etc. for the investment project;

(15) maintaining the confidentiality of the commercial secrets of the investment plan in accordance with the law;

(16) if the beneficiaries' general meeting substantively modifies the investment plan, submitting in a timely manner the documents and information concerning such modification to the CIRC for its examination;

(17) if a contingency arises, promptly reporting the same to the relevant concerned parties, the CIRC and the relevant regulatory departments;

(18) actively subjecting itself to monitoring by the relevant concerned parties, the CIRC and the relevant regulatory departments and submitting to them relevant documents and information; and

(19) other duties and responsibilities specified in the investment plan or by laws, administrative regulations or the CIRC.

Article 36: The entrusted party shall be remunerated as specified in the investment plan.

If the entrusted party disposes of investment plan property in a manner that breaches the investment plan or causes the investment plan property to incur a loss due to its breaching its management duties and responsibilities or improperly handling investment plan matters, it may not request remuneration until it has restored the investment plan property to its original state or paid compensation.

Article 37: If the liabilities to a third party, or the entrusted party itself, incur a loss due to a breach of the investment plan by the entrusted party, the entrusted party shall bear the loss from its own property.

If the entrusted party breaches the entrustment contract, the improper gains so obtained from the management, application or disposal of investment plan property shall become part of the investment plan property. If the investment plan property incurs a loss as a result thereof, the entrusted party shall be liable for damages to the beneficiaries or the entrusting party.

If the entrusted party provides false or ambiguous information, thereby misleading the independent supervisor and causing the investment plan property to incur a loss, it shall be liable for damages to the beneficiaries or the entrusting party.

Article 38: The entrusting party or the beneficiaries' general meeting shall dismiss the entrusted party in accordance with the investment plan if:

(1) the entrusted party breaches the entrustment contract or fails to perform the duties and responsibilities specified in the investment plan or those that it undertook to perform;

(2) the entrusted party utilizes investment plan property to seek gains beyond those specified in the investment plan or to seek improper gains for another person;

(3) the entrusted party fails to distribute and pay the returns payable from the investment plan or the investment plan property due to its incompetent management or lax supervision of the Owner;

(4) the entrusted party provides false documents or information to the relevant concerned parties or commits another act of fraud;

(5) the entrusted party is dissolved, closed down, declared bankrupt or falls into receivership in accordance with the law;

(6) the entrusting party has evidence that replacing the entrusted party would be in the interests of the beneficiaries; or

(7) another circumstance specified in the investment plan or by laws, administrative regulations or the CIRC arises.

If the entrusted party is characterized by any of the circumstances specified in the preceding paragraph, the CIRC or the relevant regulatory department may recommend to the entrusting party or the beneficiaries' general meeting that it dismiss the entrusted party.

Article 39: If the entrusted party is dismissed, the entrusting party or the beneficiaries' general meeting shall appoint a new entrusted party within 30 days.

When the entrusted party is dismissed, it shall continue to perform its relevant duties and responsibilities and duly keep relevant information until the new entrusted party succeeds it. It shall carry out the procedures for the handover of the management affairs entrusted to it in a timely manner. The new entrusted party shall succeed to the duties and responsibilities for handling investment plan matters of the original entrusted party.

If the entrusted party is characterized by any of the circumstances specified in Item (5) of Article 38, the entrusting party or beneficiaries' general meeting shall designate a provisional entrusted party to handle relevant investment plan matters.

When the investment plan terminates, the entrusted party shall continue to perform its relevant duties and responsibilities until the completion of liquidation.

Article 40: When the entrusted party's duties and responsibilities terminate, an accounting firm shall be engaged to audit the management of the investment plan that was entrusted to it. The audit results shall be communicated in writing to the other concerned parties to the investment plan, and submitted to the CIRC and the relevant regulatory departments for the record.

Article 41: The entrusted party may not:

(1) misappropriate investment plan property;

(2) use investment plan property in credit transactions;

(3) use investment plan property to provide security for a third party or to provide loans to parties other than the Owner;

(4) combine together management of the investment plan property, its own property and the property of others;

(5) combine together management of the property of different investment plans;

(6) entrust the investment plan property to the management of another party;

(7) discriminate in its management of the property of different investment plans;

(8) conduct transactions between its own property and investment plan property or between the property of different investment plans;

(9) make investments that expose investment plan property to unlimited liability;

(10) have any of its directors, supervisors, managers or other working personnel serving in the organization of the entrusting party, the independent supervisor or that of other entrusted parties; or

(11) commit another act that is prohibited by the investment plan, laws, administrative regulations or the CIRC.

PART FIVE: BENEFICIARIES

Article 42: For the purposes of these Measures, the term 'beneficiary' means a party designated in the investment plan by the entrusting party that enjoys the rights to the returns therefrom.

The beneficiary of an investment plan may be the entrusting party. A beneficiary may concurrently serve as independent supervisor.

If the entrusting party is the sole beneficiary, it may request that the investment plan be terminated, unless the investment plan provides otherwise, in which case such provisions shall prevail.

Article 43: If an insurance company, insurance group company or insurance holding company is to acquire rights to the returns from an investment plan, it shall satisfy the conditions specified in Article 23 hereof and submit the application materials in accordance with the first paragraph of Article 24 hereof.

The CIRC shall render its decision on whether or not to grant its approval within 20 days of the date of receipt of the application materials. If it withholds its approval, it shall notify the applicant thereof in writing and explain its reasons.

Article 44: If a beneficiary is an insurance company, insurance group company or insurance holding company, it shall comply with the provisions of Article 25 hereof on the investment percentages of an insurance company.

Article 45: If a non-insurance institution acquires rights to the returns from an investment plan, it shall comply with the investment plan, laws, administrative regulations and the provisions of the relevant regulatory departments.

Article 46: If an investment plan has two or more beneficiaries, a beneficiaries' general meeting shall be established. Beneficiaries' general meetings shall be convened in accordance with the following procedure:

(1) the convening of a beneficiaries' general meeting shall be proposed by a beneficiary holding one-third or more of the shares of the rights to the returns from the investment plan; the proposing beneficiary may serve as convener; the convener shall notify the other beneficiaries of the date of the beneficiaries' general meeting, the form of the meeting, the matters to be considered, the procedural rules and voting method, etc. at least 30 days in advance;

(2) each share of the rights to the returns from the investment plan shall have one vote; a beneficiary may authorize a proxy to attend and vote at a beneficiaries' general meeting on its behalf;

(3) the holding of a beneficiaries' general meeting shall require a quorum of beneficiaries holding at least one-half of the voting rights; resolutions of the general meeting shall require a simple majority of the voting rights held by the beneficiaries attending in person or by proxy for adoption; however, resolutions of the general meeting on changing the method of managing the investment plan, replacing the entrusted party, custodian or independent supervisor or early termination or extension of the investment plan shall require at least two-thirds of the voting rights held by the beneficiaries attending in person or by proxy for adoption; resolutions of the beneficiaries' general meeting and relevant matters shall promptly be disclosed to the beneficiaries and submitted to the CIRC for the record; and

(4) if a major contingency that seriously affects the implementation of the investment plan arises, any beneficiary or its authorized representative may propose the convening of an extraordinary beneficiaries' general meeting and assume responsibility for convening the same.

Article 47: Once an investment plan enters into effect, its beneficiaries shall enjoy the following rights in accordance with the law:

(1) enjoying or transferring the rights to the returns from the investment plan;

(2) attending beneficiaries' general meetings and exercising the right to vote based on the shares of the rights to the returns from the investment plan that it holds or as specified in the investment plan;

(3) reviewing the resolutions of the beneficiaries' general meeting and relevant information;

(4) nominating a beneficiary representative to disclose details on the holding of a beneficiaries' general meeting, the matters considered thereat and the voting results;

(5) requiring the entrusted party to distribute and pay the returns from the investment plan and matured investment plan property;

(6) dismissing the entrusted party or custodian in accordance with the investment plan and these Measures if it disposes of investment plan property in breach of the objectives of the investment plan or if it has committed a major fault in its management, application or disposal of investment plan property;

(7) selecting and replacing the independent supervisor, executing a supervision contract with the independent supervisor and monitoring it in the performance of its supervisory duties and responsibilities;

(8) monitoring the entrusted party and Owner, and obtaining information on the management of the investment plan, operation of the project, investment returns, etc. in a timely manner; and

(9) other rights specified in the investment plan or by laws, administrative regulations or the CIRC.

Article 48: A beneficiary shall perform the following duties and responsibilities:

(1) preserving the accounting books, statements, etc. relating to the distribution of the returns from the investment plan property;

(2) carrying out the procedures for the transfer of the rights to the returns from the investment plan in accordance with the investment plan, informing the other beneficiaries thereof and reporting the same to the CIRC for the record;

(3) subjecting itself to the monitoring of the other concerned parties, the CIRC and relevant regulatory departments and submitting relevant documents and information in a timely manner; and

(4) other duties and responsibilities specified in the investment plan or by laws, administrative regulations or the CIRC.

Article 49: When the investment plan terminates or when a beneficiary transfers all of its rights to the returns from the investment plan, its rights and obligations as a beneficiary shall automatically terminate.

Article 50: A beneficiary may not:

(1) encourage the entrusted party to make investments that violate laws or regulations;

(2) harm the interests of other beneficiaries;

(3) prevent other concerned parties from performing their duties and responsibilities in accordance with the law; or

(4) commit another act that is prohibited by the investment plan, laws, administrative regulations or the CIRC.

PART SIX: CUSTODIAN

Article 51: For the purposes of these Measures, the term 'custodian' means a commercial bank or other professional financial institution that is engaged by the entrusting party pursuant to the investment plan to keep in its custody the investment plan property.

A custodian shall be selected for an investment plan. The custodian may not be the same party as the entrusted party, the Owner or any of the beneficiaries, nor may it be affiliated to them.

Article 52: A custodian shall satisfy the relevant conditions specified by the CIRC and have obtained the relevant custodial business qualifications.

Article 53: The custodian shall perform the following duties and responsibilities:

(1) executing a custodian contract with the entrusting party and faithfully performing its custodial duties and responsibilities;

(2) establishing separate dedicated accounts for each different investment plan and ensuring the individuality, safety and integrity of investment plan property;

(3) as instructed by the entrusting party and in a timely manner, taking custody of the investment plan property and carrying out the appropriation of funds for the entrusting party;

(4) as instructed by the entrusted party and in a timely manner, carrying out fund appropriations under the investment plan and transferring investment returns and matured investment plan property into the beneficiaries' designated accounts;

(5) notifying the relevant concerned parties in a timely manner of instructions from the entrusted party for fund appropriations that exceed the authorized limit, and executing the same after approval from the independent supervisor;

(6) ensuring that the investment returns paid by the Owner and the distribution of liquidated property is credited to the dedicated account for the investment plan;

(7) being responsible for the accounting for the entrusting party's investments and checking and reviewing the value of the investment plan property calculated by the entrusted party;

(8) keeping abreast of, and obtaining, information on the management and operation of the investment plan and requiring the entrusted party and Owner to give explanations;

(9) monitoring the use and recovery of investment plan funds, progress of the project and the calculation and distribution of investment plan returns; if it discovers operations by the entrusted party that are in violation of regulations, reporting the same to the other concerned parties, the CIRC and the relevant regulatory departments in a timely manner;

(10) preparing custody reports on a regular basis;

(11) engaging an accounting firm to audit the investment plan property in its custody;

(12) disclosing investment plan information in a timely manner, truthfully providing relevant materials, reporting on the implementation of the investment plan and accepting inquiries from the entrusting party, beneficiaries and independent supervisor;

(13) preserving instructions for the appropriation of investment plan funds and the accounting books, statements, etc. for the calculation, payment and distribution of returns;

(14) actively subjecting itself to monitoring by the entrusting party, beneficiaries, the CIRC and relevant regulatory departments and submitting to them relevant documents and information; and

(15) other duties and responsibilities specified in the investment plan and by laws, administrative regulations and the CIRC.

Article 54: The custodian shall be remunerated as specified in the investment plan.

The custodian shall be liable to the beneficiaries or the entrusting party for damages in respect of losses to the investment plan property incurred due to its failure to perform its custodial obligations.

Article 55: The entrusting party or the beneficiaries' general meeting shall dismiss the custodian if:

(1) the custodian breaches the custodian contract or fails to perform the duties and responsibilities specified in the custodian contract or those that it undertook to perform;

(2) the custodian utilizes investment plan property to seek gains beyond those specified in the investment plan or to seek improper gains for another person;

(3) the custodian provides false documents or information to the relevant concerned parties or commits another act of fraud;

(4) the custodian is incompetent in its management or fails to perform its duty of monitoring the entrusted party;

(5) the custodian is dissolved, closed down, declared bankrupt or falls into receivership in accordance with the law;

(6) the entrusting party has evidence that replacing the custodian would be in the interests of the beneficiaries; or

(7) another circumstance specified in the investment plan or by laws, administrative regulations or the CIRC arises.

If the custodian is characterized by any of the circumstances specified in the preceding paragraph, the CIRC or the relevant regulatory department may recommend to the entrusting party or the beneficiaries' general meeting that it dismiss the custodian.

Article 56: If the custodian is dismissed, the entrusting party or the beneficiaries' general meeting shall appoint a new custodian within 30 days.

When the custodian is dismissed, it shall continue to perform its relevant duties and responsibilities and duly keep custody and management information until the new custodian succeeds it. It shall carry out the procedures for the handover of custody affairs in a timely manner. The new custodian shall succeed to the duties and responsibilities for handling investment plan matters of the original custodian.

When the investment plan terminates, the custodian shall continue to perform its relevant duties and responsibilities until the completion of liquidation.

Article 57: When the custodian's duties and responsibilities terminate, an accounting firm shall be engaged to audit its custody of the investment plan property. The audit results shall be communicated to the other concerned parties to the investment plan, and submitted to the CIRC and the relevant regulatory departments for the record.

Article 58: The custodian may not:

(1) misappropriate investment plan property in its custody;

(2) combine together the management of investment plan property in its custody and its own property;

(3) combine together management of the property in its custody of different investment plans;

(4) transfer investment plan property in its custody into the custody of another party;

(5) conspire with the entrusted party, Owner and/or the independent supervisor to harm the interests of the beneficiaries;

(6) at the instruction of the entrusted party appropriate funds exceeding the authorized limit specified in the entrustment contract without the approval of the independent supervisor; or

(7) commit another act that is prohibited by the investment plan, laws, administrative regulations or the CIRC.

PART SEVEN: INDEPENDENT SUPERVISOR

Article 59: For the purposes of these Measures, the term 'independent supervisor' means a professional management organization engaged by the beneficiaries pursuant to the investment plan in order to safeguard their interests and supervise the management of the investment plan by the entrusted party and the specific operations of the Owner.

A single independent supervisor shall be selected for an investment plan. Separate independent supervisors may be engaged respectively for the project construction period and operation period, unless otherwise specified in the investment plan. The independent supervisor may not be the same party as the entrusted party or Owner, nor may it be affiliated with them.

Article 60: Any of the following organizations may serve as an independent supervisor:

(1) a beneficiary of the investment plan;

(2) a financial institution with a domestic rating of AA or higher during the previous year;

(3) a professional organization to which the relevant state department has issued the relevant business permit; or

(4) another organization approved by the CIRC.

Article 61: An independent supervisor shall satisfy the following conditions:

(1) having the highest qualifications in the relevant field certified by the relevant state authority;

(2) having an excellent good faith and market image;

(3) having sound internal management, project monitoring and operation systems, and its implementation thereof is compliant;

(4) having the professional knowledge and skills to undertake the duties and responsibilities of an independent supervisor;

(5) having engaged in relevant business for at least three years and having relevant experience;

(6) not having been penalized by the competent department or regulatory department during the most recent three years; and

(7) other conditions specified by the CIRC.

Article 62: The independent supervisor shall submit the following documents and materials to the CIRC:

(1) valid photocopies of its relevant business permit and the document evidencing its relevant qualifications;

(2) basic materials on the company, which shall, at minimum, include the company's name, organizational framework, registered capital, scope of business and the company's financial statements for the previous year audited by an accounting firm;

(3) its internal management systems, which shall, at minimum, include its dynamic monitoring system for effecting supervision, information disclosure system, monitoring procedure, supervision report system, etc.;

(4) its infrastructure project supervision history and an explanation of the major projects it has supervised;

(5) the r¨¦sum¨¦s of the professional personnel who supervise the construction and operation of infrastructure projects;

(6) the basic method of and measures for the supervision of the construction and operation of infrastructure projects;

(7) an undertaking that it will perform supervisory duties and responsibilities in accordance with the law; and

(8) other materials specified by the CIRC.

In addition to submitting the materials specified in the preceding paragraph, the independent supervisor shall submit materials evidencing its compliance with the conditions specified in Article 61 hereof.

The CIRC shall conduct a format review of the completeness of the application materials submitted by the independent supervisor from the perspectives of its experience in supervising infrastructure projects, corporate governance, credit status, credit rating, management capabilities, internal control systems, monitoring mechanisms, etc. and issue comments on its review.

Article 63: Prior to formally executing the relevant contract with the beneficiaries, the independent supervisor shall provide them the review comments issued by the CIRC.

Article 64: The independent supervisor shall perform the following duties and responsibilities:

(1) executing a supervision contract with the beneficiaries, complying with professional standards and faithfully performing its supervisory duties and responsibilities;

(2) when necessary, engaging a natural person, legal person or another organization to assist it in completing its independent supervisor duties and responsibilities;

(3) supervising the entrusted party in its management of the investment plan and the performance of its statutory and investment plan specified duties and responsibilities;

(4) tracking and monitoring the Owner's management of the infrastructure project, including but not limited to the investment orientation of the investment plan funds, project term, quality, costs, operation and its performance of relevant contracts; if it discovers a major matter, such as a serious deterioration in the Owner's financial position, the failure by the guarantor to continue providing valid security, etc., reporting the same to the relevant concerned parties, the CIRC and the relevant regulatory departments in a timely manner;

(5) analyzing project construction and operating risks, and submitting proposals to guard against and eliminate such risks in a timely manner;

(6) reviewing instructions from the entrusted party for fund appropriations that exceed the authorized limit specified in the entrustment contract, issuing a written opinion thereon and, in a timely manner, notifying the beneficiaries thereof;

(7) keeping abreast of, and obtaining, information on the management of the investment plan and operation of the project, and requiring the entrusted party and the Owner to give explanations;

(8) attending beneficiaries' general meetings as a non-voting participant;

(9) submitting supervision reports to the entrusting party, beneficiaries and the CIRC, actively subjecting itself to the supervisory inspections of the entrusting party, beneficiaries, the CIRC and relevant regulatory departments and submitting to them relevant documents and information; and

(10) other duties and responsibilities specified in the investment plan and by laws, administrative regulations and the CIRC.

Article 65: The independent supervisor shall be remunerated as specified in the investment plan.

The independent supervisor shall be liable to the beneficiaries or the entrusting party for damages in respect of losses to the investment plan property incurred due to its lax supervision.

Article 66: The beneficiaries' general meeting shall dismiss the independent supervisor in accordance with the investment plan if:

(1) the independent supervisor breaches the contract with the beneficiaries or fails to perform the duties and responsibilities specified in the contract or those that it undertook to perform;

(2) the independent supervisor utilizes investment plan property to seek gains beyond those specified in the investment plan or to seek improper gains for another person;

(3) the independent supervisor is lax in its supervision of the entrusted party or Owner, or fails to effectively supervise the management of the investment plan property or the operation of the project;

(4) the independent supervisor provides false documents or information to the relevant concerned parties or commits another act of fraud;

(5) the independent supervisor is dissolved, closed down, declared bankrupt or falls into receivership in accordance with the law;

(6) the beneficiaries' general meeting has evidence that replacing the independent supervisor would be in the interests of the beneficiaries; or

(7) another circumstance specified in the investment plan or by laws, administrative regulations or the CIRC arises.

If the independent supervisor is characterized by any of the circumstances specified in the preceding paragraph, the CIRC or the relevant regulatory department may recommend to the beneficiaries' general meeting that it dismiss the independent supervisor.

Article 67: If the independent supervisor is dismissed, the beneficiaries' general meeting shall appoint a new independent supervisor within 30 days.

When the independent supervisor is dismissed, it shall continue to perform its relevant duties and responsibilities and duly keep supervision information until the new independent supervisor succeeds it. It shall carry out the procedures for the handover of supervisory affairs in a timely manner. The new independent supervisor shall succeed to the duties and responsibilities for handling investment plan matters of the original independent supervisor.

When the investment plan terminates, the independent supervisor shall continue to perform its relevant duties and responsibilities until the completion of liquidation.

Article 68: When the independent supervisor's duties and responsibilities terminate, the other concerned parties shall be notified thereof and the same shall be reported to the CIRC.

Article 69: The independent supervisor may not:

(1) conspire with the entrusted party, the custodian and/or the Owner to harm the interests of the beneficiaries; or

(2) commit another act that is prohibited by the investment plan, laws, administrative regulations or the CIRC.

PART EIGHT: INFORMATION DISCLOSURE

Article 70: Each of the concerned parties shall, pursuant to the investment plan, laws, administrative regulations and the provisions of the CIRC and relevant departments, integrally preserve information relating to the investment plan, perform its information disclosure obligations and ensure that the relevant concerned parties can review and take copies of such information.

Each of the concerned parties shall submit documents and information on the management, operation and supervision of the investment plan in an accurate, timely and legally compliant manner at the times and by the method specified in the investment plan and shall be liable for the truthfulness and completeness thereof.

Article 71: The entrusted party shall disclose the following information to the entrusting party and beneficiaries in accordance with the investment plan:

(1) details of its corporate governance;

(2) the company's financial statements for the most recent three years audited by an accounting firm and the recommendations on the internal controls and management of the company during the most recent three years issued by an accounting firm;

(3) details on the establishment of the investment plan, including a profile of the project and the Owner, the scope of the entrusting party and beneficiaries and their number, total monetary amount, etc.;

(4) a due diligence report;

(5) the procedure and method for evaluating the investment plan property;

(6) the most recent information on the management of the investment plan, including the risks of the project, factors leading to changes in the returns, information on follow-up management, etc.;

(7) the latent risks of the investment plan and possible losses resulting therefrom, including a serious deterioration in the financial position of the Owner arising, a major accident in the project arising resulting in losses, failure by the guarantor to continue providing valid security, a major dispute arising among the concerned parties over their responsibilities under the contracts, etc., as well as the proposed strategies and solutions and the reasons for the selection thereof;

(8) the measures for isolating the risks attaching to investment plan property under its management from those attaching to other different types of property;

(9) the financial position of the party providing security for the investment project and the reasons for its providing such security;

(10) details on the termination of the investment plan and the ownership and distribution of the property at such time;

(11) quarterly, semi-annual and annual investment plan management reports; the financial accounting reports therein shall have been audited by an accounting firm;

(12) major legal actions involving the investment plan and the concerned parties;

(13) dedicated reports on major matters relating to the investment plan;

(14) the affiliations among the concerned parties;

(15) details of contingencies and proposed measures and contingency plans;

(16) details of major equity changes;

(17) details of major changes in its senior management personnel and their relevant departments; and

(18) other information that the investment plan or laws, administrative regulations, the CIRC or relevant regulatory departments specify be disclosed.

The entrusted party shall disclose to the custodian and the independent supervisor the information specified in Item (3) and Items (5) to (11) of the preceding paragraph.

The entrusted party shall report to the CIRC and relevant regulatory departments the relevant information specified in Items (10) to (18) of the first paragraph.

When disclosing information to the entrusting party and beneficiaries and submitting reports to the CIRC and relevant regulatory departments, the entrusted party shall provide the comments upon checking the same issued by the custodian and independent supervisor.

Article 72: The entrusting party or the beneficiaries shall report the relevant information specified in Article 71 to the CIRC.

When a beneficiaries' general meeting is convened by the beneficiaries, the resolutions of the beneficiaries' general meeting and relevant information shall be disclosed to the beneficiaries in a timely manner.

If a beneficiary transfers its rights to the returns from the investment plan, it shall submit the transfer agreement to the CIRC and relevant regulatory departments for the record in a timely manner within 10 days of the execution of the transfer agreement. At the same time, it shall also disclose to the relevant concerned parties such information as the price of the transfer of the rights to the returns, the number of shares transferred and the counterparty to the transaction, etc.

Article 73: The custodian and independent supervisor shall disclose or report to the other concerned parties, the CIRC and the relevant regulatory departments the relevant information specified in Items (16) to (18) of Article 71 hereof, and shall additionally disclose or report to the entrusting party, beneficiaries, the CIRC and relevant regulatory departments the following information and matters:

(1) details on the performance by the entrusted party of its duties and responsibilities;

(2) details on the performance by the entrusted party of the entrustment contract;

(3) the current state of the investment plan returns and property;

(4) a custody report and supervision report; and

(5) other matters that require disclosure and reporting.

Article 74: The entrusted party and independent supervisor shall take the necessary measures to cause the Owner to disclose relevant information fully and in detail.

Article 75: When the various concerned parties submit reports and disclose information, they shall ensure that the reports and information provided are true, valid, complete and free of false statements, they may not slander other relevant parties and may not give any undertakings that violate laws, administrative regulations or these Measures.

Article 76: In addition to the information specified in these Measures, all of the concerned parties have an obligation to perform their disclosure duties and responsibilities in respect of any information that could have a substantive effect on the decisions or interests of the entrusting party and beneficiaries.

PART NINE: RISK MANAGEMENT

Article 77: The entrusting party shall establish investment plan risk control systems pursuant to the Risk Control Guidelines for Utilization of Insurance Funds (Trial Implementation) that shall, at minimum, include the following:

(1) an industry and sector development research system;

(2) a project evaluation, selection and reserve system;

(3) an investment decision making system;

(4) a fund appropriation authorization system;

(5) a risk monitoring system;

(6) a system for evaluating the creditworthiness of the concerned parties to the investment plan;

(7) a management personnel training system; and

(8) a system for the emergency handling of contingencies.

Article 78: The entrusting party shall take effective measures to guard against the decision making risk, operational risk, credit risk, ethical risk and legal risk encountered in the course of making the investment plan investment. It shall:

(1) standardize the investment decision making process, establish a collective decision making system and ensure that a person responsible for risks signs at each stage of the investment decision making process, so as to guard against investment decision making risk;

(2) bring in professional evaluation organizations, establish a creditworthiness evaluation system and comprehensively track on a continuous basis the creditworthiness of relevant concerned parties, so as to guard against credit risk;

(3) establish the relevant business department, establish a system to separate positions, examine carefully and reveal the main risk points in the investment plan investments and formulate control measures, so as to guard against investment operational risk;

(4) strengthen professional ethics education, establish an investment monitoring system and monitor and constrain important positions and personnel and critical stages, so as to guard against ethical risk; and

(5) review and determine key contract terms, establish a compliance review system, and, when drafting, amending and executing relevant contracts, have a practising lawyer conduct an independent review thereof, so as to guard against legal risk.

Article 79: The senior management personnel of the entrusting party shall make decisions in strict accordance with the investment decision making procedure and the risk control system, and the key business personnel shall be familiar with the relevant investment operating rules and risk control methods.

Article 80: The entrusting party and the entrusted party shall arrange for relevant experts and professional organizations to demonstrate the feasibility of the investment plan from an economic, social, technical, financial and other such perspectives. The feasibility study shall, at minimum, include the following:

(1) an overall evaluation of the project, mainly consisting of an evaluation of the social necessity, economic viability, technical advancement, financial feasibility and market prospects of the project;

(2) a project budget evaluation, mainly consisting of an evaluation of the compliance, reliability, etc. of the project investment budget and source of, and the method(s) of raising, the funds for the project;

(3) a project operation evaluation, mainly consisting of an evaluation of the policy environment, management method, operational status, ancillary facilities and operational risk during the project's construction period and management period;

(4) a project performance evaluation, mainly consisting of an evaluation of the project's financial revenues, cash flow, assets and liabilities, investment costs, investment returns, the Owner's solvency, etc.;

(5) an evaluation of each of the concerned parties, mainly consisting of an evaluation of each relevant concerned party's legal person status, governance structure, asset and liability capacity, credit status, etc.;

(6) an investment creditworthiness evaluation, mainly consisting of an evaluation of the investment plan guarantor's qualifications, security capacity, value of the item(s) mortgaged (pledged), credit rating upgrading measures, etc.; and

(7) an investment risk evaluation, mainly consisting of an evaluation of the risks and uncertainties faced by the investment plan.

Article 81: The entrusting party or beneficiaries shall exchange relevant information with the entrusted party, custodian and independent supervisor in a timely manner, and track and monitor the implementation of the investment plan and the specific management situation. The entrusting party or beneficiaries shall, at minimum, track and monitor the following:

(1) the state of each of the concerned parties;

(2) revisions of relevant laws, statutes and policies;

(3) the operation of the investment plan and the project; and

(4) matters relating to the security provided for the project.

Article 82: The entrusting party or beneficiaries shall conduct a due diligence evaluation of the entrusted party, the custodian and the independent supervisor annually, and, when necessary, replace any of them in accordance with the investment plan.

Article 83: In the event that any of the concerned parties encounters a contingency, it shall take active measures to mitigate losses to the investment plan property.

Article 84: If the beneficiaries' general meeting amends the investment plan and a beneficiary is an insurance institution, the same shall be reported promptly to the CIRC and necessary measures shall be taken to guard against investment risks.

If the beneficiaries' general meeting revises the investment plan in such a manner that the beneficiary mentioned in the preceding paragraph no longer complies with the relevant provisions hereof, the CIRC may demand that it transfer the rights to the returns from the investment plan held by it.

Article 85: The concerned parties may not divulge trade secrets relating to the investment plan in violation of the investment plan, laws, administrative regulations or the provisions of the CIRC.

Article 86: If the investment in an infrastructure project under an investment plan is made by a debt claim method, security shall be obtained therefor. The security may take the form of a guarantee, mortgage, pledge, lien or deposit, etc.

(1) If the guarantor provides the security in the form of a guarantee, it shall be a financial institution with an AA rating or higher or the equivalent of an AA rating or higher as rated by a credit rating institution in China during the previous year or, alternatively, it may be a non-financial institution provided that at the end of the previous year it had net assets of at least Rmb20 billion. The guarantor must provide the relevant supporting documentation for the guarantee.

(2) If the guarantor provides the security in the form of a mortgage or pledge, it shall, in accordance with relevant laws and administrative regulations, provide a list of the mortgaged assets or pledged items and valid documentation evidencing that the party with disposal rights consents to the provision of the mortgage or pledge. If the security is provided in the form of a mortgage, the debt secured by the mortgage may not exceed 50% of the value of the item(s) mortgaged.

(3) If the guarantor provides the security in the form of a lien or deposit, it shall, in accordance with relevant laws and administrative regulations, provide a list of the assets subject to the lien or a deposit contract and valid documentation evidencing that the party with disposal rights consents to the provision of the lien or deposit.

Article 87: If the investment in an infrastructure project under an investment plan is made by an equity method, the entrusted party shall, at minimum, adopt the following risk control measures:

(1) obtaining decision making rights in the invested project;

(2) obtaining at least one directorship from the Owner; and

(3) ensuring that a feasible equity withdrawal mechanism is available.

Article 88: If the investment in an infrastructure project under an investment plan is made through the transfer of rights to returns or operating rights or other feasible method, the entrusted party shall, at minimum, adopt the following risk control measures:

(1) ensuring that title to the infrastructure property that relates to the acquired rights is free of defects and that it is not encumbered by any third party claims;

(2) ensuring that the owner of the infrastructure property that relates to the acquired rights undertakes unlimited joint and several liability for damages in respect of debts arising in connection with such infrastructure property; and

(3) obtaining security provided by a financial institution with an AA rating or higher or the equivalent of an AA rating or higher as rated by a credit rating institution in China during the previous year, or a non-financial institution with assets of at least Rmb20 billion as at the end of the previous year.

Article 89: If the investment in an infrastructure project under an investment plan is made through rights in rem or other feasible method, sound risk control measures shall be formulated, scientific risk management methods shall be applied and an effective risk management mechanism shall be established.

PART TEN: REGULATION

Article 90: The CIRC shall monitor the business activities of concerned parties to investment plans in accordance with the law and, when necessary, may order the concerned parties to engage a qualified accounting firm to audit the business and financial positions of the investment plan. Each of the concerned parties shall give its active cooperation and may not commit any of the following acts:

(1) refusing or interfering with a monitoring inspection conducted by regulatory personnel;

(2) refusing or delaying the provision of information relating to the matters that are the subject of the inspection;

(3) concealing, forging, altering, destroying or disposing of accounting vouchers, accounting books, accounting statements or other relevant information; or

(4) another act prohibited by the CIRC.

The relevant regulatory departments shall, ex officio, conduct monitoring inspections of the business positions of relevant concerned parties, such as entrusted parties, custodians and independent supervisors, etc., in accordance with the law.

Article 91: The CIRC will establish a system for the pursuit of liability, which shall be responsible for inspecting and holding accountable entrusting parties, beneficiaries, their senior management personnel and key business personnel. It shall ask persons who have violated relevant laws, administrative regulations or these Measures to provide an explanation, give them a regulatory lecture and subject them to administrative penalties in accordance with the law.

If it is discovered after a member of the senior management personnel or key business personnel of an entrusting party or beneficiary has left office that, while in office, he/she violated relevant laws, administrative regulations or these Measures, his/her liability shall be pursued in accordance with the law.

Article 92: If an entrusted party, custodian or independent supervisor violates relevant laws, administrative regulations or these Measures, the CIRC shall keep a record of its improper act. If the circumstances are serious, the CIRC may order it temporarily to cease engaging in the business of indirect investment of insurance funds in infrastructure projects and consult with the relevant regulatory departments on imposing administrative penalties in accordance with the law.

The CIRC may restrict or prohibit entrusting parties and beneficiaries from investing in investment plans in which an entrusted party, custodian or independent supervisor with a record of improper activity is involved. If a beneficiary has invested in such an investment plan, the CIRC may order it to transfer its rights to the returns therefrom.

Article 93: The CIRC may, as appropriate, revise the qualification conditions of the concerned parties, the investment scope of investments in infrastructure projects and the investment percentages in line with market changes and the state of investment operations.

PART ELEVEN: SUPPLEMENTARY PROVISIONS

Article 94: For the purposes of these Measures, the term 'affiliation' means that relevant parties are in a control relationship in terms of shares or capital contribution, or are commonly controlled by a third party in terms of shares or capital contribution.

Article 95: The specific measures for the investment of insurance funds in investment projects through entrustment or other such means will be formulated separately by the CIRC.

Article 96: The specific measures for the indirect investment of insurance funds in infrastructure projects through an industry investment fund will be formulated separately by the CIRC.

Article 97: The CIRC is in charge of interpreting and revising these Measures.

Article 98: These Measures shall be effective as of the date of issue.