Measures for the Administration of Trust Companies

Article 2: For the purposes of these Measures, the term "trust company" means a financial institution, established pursuant to the PRC Company Law and these Measures, that primarily engages in trust business.

For the purposes of these Measures, the term "trust business" means the business activity whereby a trust company, for the purposes of business and obtaining remuneration, accepts a trust and handles trust affairs as a trustee.

Article 3: Trust property is not a part of the trust company's own property and does not constitute a liability of the trust company towards the beneficiary. When a trust company is terminated, trust property shall not be part of its property subject to liquidation.

Article 4: A trust company engaging in trust activities shall comply with laws, regulations and the trust document and may not harm the interests of the state or the public or the lawful rights and interests of beneficiaries.

Article 5: The China Banking Regulatory Commission oversees trust companies and their business activities.

PART TWO: ESTABLISHMENT, MODIFICATION, AND TERMINATION OF THE BUSINESS OF, AN ORGANIZATION

Article 6: A trust company shall be established in the form of a limited liability company or a company limited by shares.

Article 7: The establishment of a trust company shall be subject to the approval of the China Banking Regulatory Commission and shall require the obtaining of a finance permit.

No work unit or individual may engage in trust business and no business work unit may use the words "trust company" in its name without the approval of the China Banking Regulatory Commission, unless otherwise provided in laws or regulations.

Article 8: The establishment of a trust company shall satisfy the following conditions:

(1) having articles of association that comply with the PRC Company Law and the provisions of the China Banking Regulatory Commission;

(2) having shareholders that possess the shareholder qualifications stipulated by the China Banking Regulatory Commission;

(3) having the minimum registered capital stipulated herein;

(4) having directors and senior management personnel with the position qualifications stipulated by the China Banking Regulatory Commission and the trust personnel suitable for its business;

(5) having a sound organizational structure, trust business operational rules and risk control system;

(6) having a place of business, security precautions and other business-related facilities that meet requirements; and

(7) other conditions as stipulated by the China Banking Regulatory Commission.

Article 9: The China Banking Regulatory Commission shall examine applications for the establishment of trust companies in accordance with laws, regulations and the principle of prudential oversight. It shall render a decision on whether to approve an application or not and explain the reasons therefor if it withholds its approval.

Article 10: The minimum registered capital of a trust company shall be Rmb300 million or the equivalent in a freely convertible currency. Registered capital shall be paid-in monetary capital.

If an application is made to engage in business, such as enterprise pension, securities underwriting and asset securitization, the minimum registered capital requirements of relevant laws and regulations shall be satisfied.

Depending on the development needs of the trust company industry, the China Banking Regulatory Commission may adjust the minimum registered capital of trust companies.

Article 11: Without the approval of the China Banking Regulatory Commission, a trust company may not establish or in a disguised manner establish branches or sub-branches.

Article 12: A trust company shall obtain the approval of the China Banking Regulatory Commission to:

(1) change its name;

(2) change its registered capital;

(3) change its domicile;

(4) change its organizational structure;

(5) adjust its scope of business;

(6) make a change in its directors or senior management;

(7) make a change in its shareholders or adjust its equity structure, unless the traded shares of the listed company it holds are less than 5% of the total shares of the company;

(8) amend its articles of association;

(9) merge or divide; or

(10) make other changes stipulated by the China Banking Regulatory Commission.

Article 13: If a trust company applies for dissolution when a division, merger or a ground for dissolution stipulated in its articles of association arises, it shall be dissolved after approval by the China Banking Regulatory Commission and shall organize a liquidation committee in accordance with the law to carry out liquidation.

Article 14: If a trust company is insolvent and its assets are insufficient to discharge its debts or it clearly lacks the capacity to discharge the same, it may, subject to the consent of the China Banking Regulatory Commission, file for bankruptcy in a people's court.

The China Banking Regulatory Commission may apply directly to a people's court for restructuring of such trust company or for a declaration of bankruptcy and its liquidation.

Article 15: When the business of a trust company terminates, the company's duties of managing trust matters shall terminate simultaneously. The liquidation committee shall duly preserve the trust property, prepare a report on the handling of trust matters and carry out the procedures for the handover of the trust property to the new trustee. If trust documents provide otherwise, such provisions shall prevail.

PART THREE: SCOPE OF BUSINESS

Article 16: A trust company may apply to engage in part or all of the following businesses in renminbi or foreign currencies:

(1) fund trust;

(2) movable property trust;

(3) immovable property trust;

(4) negotiable securities trust;

(5) trust of other property or property rights;

(6) investment fund business as the promoter of an investment fund or fund management company;

(7) enterprise asset reorganization, acquisition, merger, project financing, corporate financial management, financial consulting, etc.;

(8) entrustment to engage in securities underwriting business approved by the relevant State Council departments;

(9) intermediation, consulting, credit investigation, etc.;

(10) custodial and safety deposit box businesses; and

(11) other businesses specified in laws or regulations or approved by the China Banking Regulatory Commission.

Article 17: A trust company may engage in charitable trust activities in accordance with the relevant provisions of laws and regulations, such as the PRC Trust Law.

Article 18: Trust companies may create trust business products in accordance with market needs based on trust objectives, types of trust property or different methods of managing trust property.

Article 19: When a trust company manages, applies or disposes of trust property, it may, in accordance with the provisions of the trust document, do so by way of investment, sale, interbank deposit placement, purchase for resale, lease, lending, etc. If the China Banking Regulatory Commission provides otherwise, such provisions shall prevail.

A trust company may not manage and apply trust property by selling for repurchase.

Article 20: A trust company may, in the business for its own account, engage in businesses, such as interbank deposit placement, interbank lending, loans, lease and investment. Investment business shall be limited to investment in the equity of financial companies, financial products and fixed assets for own use.

A trust company may not use its own property to invest in industry, unless otherwise provided by the China Banking Regulatory Commission.

Article 21: A trust company may not engage in liability business other than interbank borrowing, and the balance of its interbank borrowings may not exceed 20% of its net assets, unless otherwise provided by the China Banking Regulatory Commission.

Article 22: A trust company may provide security for third parties, provided that the balance of such security does not exceed 50% of its net assets.

Article 23: If a trust company engages in trust business denominated in foreign exchange, it shall abide by relevant state provisions on foreign exchange control and accept inspections and supervision by the competent foreign exchange department.

PART FOUR: BUSINESS RULES

Article 24: When a trust company manages, applies or disposes of trust property, it must act with due diligence, perform its obligations of good faith, trustworthiness, prudence and effective management and safeguard the best interests of the beneficiaries.

Article 25: When handling trust matters, a trust company shall avoid conflicts of interest. If the same are unavoidable, it shall fully disclose information to the settlor and beneficiaries or refuse to handle such business.

Article 26: A trust company shall handle trust matters itself. If otherwise specified in the trust documents or in circumstances where there is no alternative, a third party may be appointed to handle the matters, but the trust company shall fully perform its obligation of supervision and shall be liable for the acts of the third party in handling the trust matters.

Article 27: A trust company shall bear an obligation of lawful confidentiality in respect of the settlors, beneficiaries and the information and data relating to the trust matters it handles, unless otherwise specified in laws or regulations or otherwise provided in the trust documents.

Article 28: A trust company shall duly keep complete records of its handling of trust affairs and shall report regularly on the trust property and its management, use and disposal thereof, and the details of receipts and expenditures connected therewith to the settlor and the beneficiary.

The settlor and the beneficiary have the right to seek information from the trust company on the management, use and disposal of its trust property, and the details of receipts and expenditures connected therewith, and demand that the trust company provide an explanation thereof.

Article 29: A trust company shall separately manage and keep separate accounts for trust property and its own property, and shall separately manage and keep separate accounts for the trust property of different settlors.

Article 30: A trust company shall set up accounts in accordance with the law, keep separate accounts for its trust business and non-trust business and keep independent accounts for each item of trust business.

Article 31: A trust company's trust business department shall be independent from the company's other departments, its personnel may not hold concurrent posts in other departments of the company and its business information may not be shared with the company's other departments.

Article 32: When a trust is established in the form of a trust contract, the trust contract shall specify the following particulars:

(1) the objectives of the trust;

(2) the names and domiciles of the settlor and trustee;

(3) the beneficiary or the class of beneficiaries;

(4) the scope, type and state of the trust property;

(5) the rights and obligations of the parties to the trust;

(6) the disclosure and assumption of risks during management of the trust property;

(7) the method of managing the trust property and the limits of operation of the trustee;

(8) the calculation of the benefits of the trust and the form and method of paying the benefits of the trust to the beneficiary;

(9) the calculation and payment of the remuneration of the trust company;

(10) the assumption of taxes and fees on the trust property and the calculation of other fees;

(11) the term and termination of the trust;

(12) ownership of the trust property upon the termination of the trust;

(13) the reporting of trust affairs;

(14) liability for breach of contract by the parties to the trust and the method of dispute resolution;

(15) the method of appointing new trustee; and

(16) other particulars that the parties to the trust consider necessary to be specified.

When a trust is established by a written document other than a trust contract, the particulars to be specified in the written document shall comply with relevant laws and regulations.

Article 33: When engaging in business for its own account, a trust company may not:

(1) provide financing or transfer property to affiliated parties;

(2) provide security for affiliated parties; or

(3) provide financing on the strength of a pledge of the company's equity held by a shareholder.

The affiliated parties of a trust company shall be defined in accordance with the relevant standards of the PRC Company Law and enterprise accounting guidelines.

Article 34: When engaging in trust business, a trust company may not:

(1) use its position as trustee to seek inappropriate benefits;

(2) divert trust property for non-trust purposes;

(3) promise that no loss will be incurred in respect of the trust property or guarantee minimum earnings;

(4) use trust property as security; or

(5) carry out any other act prohibited in laws or regulations or by the China Banking Regulatory Commission.

Article 35: When a trust company conducts affiliated transactions, it shall do so at fair market prices, report each transaction in advance to the China Banking Regulatory Commission and carry out information disclosures in accordance with relevant provisions.

Article 36: When engaging in trust business, a trust company shall receive remuneration in the form of service charges or commissions as specified in the trust document, unless otherwise provided by the China Banking Regulatory Commission.

The remuneration to be received by a trust company shall be disclosed and the specific fee rates shall be made known to the beneficiaries.

Article 37: If the trust company's disposal of trust property runs counter to the trust objectives, or loss is incurred in respect of the trust property due to a breach of its management responsibilities or improper handling of trust affairs, the trust company may not seek the payment of its remuneration before it returns the trust property to its original state or before it effects compensation.

Article 38: The expenses paid and the debts borne by a trust company in the handling of trust affairs shall be borne from the trust property, but the trust company shall specify it in the trust contract or clearly notify the beneficiary. If the trust company advances the payment of such expenses and debts from its own property, it shall be entitled to priority repayment from the trust property. The debts borne and damage incurred by a trust company due to a breach of its management responsibilities or mismanagement of trust affairs shall be borne from its own property.

Article 39: If the trust company's disposal of trust property runs counter to the trust objectives, or its management, use or disposal of trust property is grossly negligent, the settlor or the beneficiary has the right to dismiss the trust company in accordance with the provisions of the trust document, or petition to the people's court to dismiss the trust company.

Article 40: If a trustee's responsibilities are terminated in accordance with the law, the new trustee shall be appointed in accordance with the provisions of the trust document. If the trust document is silent on such point, the settlor shall make the appointment. If the settlor is unable to make the appointment, the appointment shall be made by the beneficiary. If the beneficiary has no or limited civil capacity, his/her guardian shall appoint the trustee on his/her behalf in accordance with the law. Before the new trustee is determined, the China Banking Regulatory Commission may appoint a provisional trustee.

Article 41: For a trust company engaged in trust business, a trust shall end if:

(1) a ground for ending stipulated in the trust document arises;

(2) the continued existence of the trust runs counter to the trust objectives;

(3) the trust objectives have been realized or are impossible to realize;

(4) the parties to the trust have agreed thereon after consultations;

(5) the trust term has expired;

(6) the trust is terminated;

(7) the trust is rescinded; or

(8) all the beneficiaries of the trust waive their rights to benefit from the trust.

Article 42: When a trust ends, the trust company shall prepare a liquidation report on the handling of trust affairs in accordance with the trust document. If the beneficiary or the owner of the rights in the trust property does not have any objections to the liquidation report, the trust company shall be released from liability for the matters mentioned therein, with the exception of liability for any improper acts committed by it.

PART FIVE: OVERSIGHT

Article 43: A trust company shall establish an organizational structure with the shareholders' (general) meeting, board of directors, supervisory board, senior management personnel, etc., as the principal entities thereof, expressly delineate the division of responsibilities among them, and ensure the independent operation of each and effective checks and balances among them so as to produce scientific and effective decision making, and incentive and restraint mechanisms.

Article 44: A trust company shall establish relevant positions based on the principle of separation of duties so as to ensure that the company can guard against risks before the fact, control matters during the fact, and monitor and rectify matters after the fact, thus forming a sound internal restraint mechanism and monitoring mechanism.

Article 45: A trust company shall formulate the rules for its trust business and other businesses, establish and develop sound management systems for all of its businesses and sound internal control systems in accordance with provisions and submit the same to the China Banking Regulatory Commission for the record.

Article 46: A trust company shall, in accordance with the relevant state provisions, establish and develop its own sound financial accounting systems that truthfully record and comprehensively reflect its business activities and financial position. The company's annual financial accounting statements shall be audited by a well-qualified intermediary organization.

Article 47: The China Banking Regulatory Commission may inspect the business activities of trust companies on a regular or ad hoc basis. When necessary, it may require a trust company to provide relevant audit reports issued by a well-qualified intermediary organization.

Trust companies shall submit the relevant business and financial statements and materials and truthfully explain the relevant business details in accordance with the requirements of the China Banking Regulatory Commission.

Article 48: The China Banking Regulatory Commission shall effect net asset administration on trust companies. The specific measures therefor shall be formulated separately by the China Banking Regulatory Commission.

Article 49: A trust company shall allocate 5% of its after-tax profit each year to a trust indemnity reserve. However, once the aggregate total amount in its trust indemnity reserve reaches 20% of its registered capital, it may cease making allocations thereto.

A trust company's indemnity reserve shall be deposited with a domestic commercial bank whose business is robust and that has considerable strength or shall be used to purchase securities products of low risk and high liquidity, such as sovereign bonds.

Article 50: The China Banking Regulatory Commission submits the directors and senior management personnel of trust companies to a system for examining their qualifications for their positions. A person who has not had his/her qualifications for his/her position examined by the China Banking Regulatory Commission or who is found not to be qualified after examination may not take up his/her position.

A trust company shall carry out a departure audit on a director or member of the senior management who plans to leave office, and the results of such audit shall be submitted to the China Banking Regulatory Commission for the record. When there is a change to the legal representative of a trust company, the incumbent legal representative may not leave his/her position until the new legal representative has had his/her qualifications for the position approved by the China Banking Regulatory Commission.

Article 51: The China Banking Regulatory Commission implements a trust business qualifications management system for the trust personnel of trust companies. Persons who are qualified will be issued a trust personnel qualifications certificate. Persons who have not obtained a trust personnel qualifications certificate may not engage in trust business.

Article 52: In the event that a director, a member of the senior management or a member of the trust personnel of a trust company violates laws, administrative regulations or the relevant provisions of the China Banking Regulatory Commission, the China Banking Regulatory Commission has the right to revoke his/her qualifications for his/her position or his/her trust business qualifications.

Article 53: The China Banking Regulatory Commission may, as required to perform its duties, hold regulatory discussions with the directors and senior management personnel of a trust company and require them to provide explanations of material matters in the company's business activities and risk management.

Article 54: If a trust company violates prudential business rules, the China Banking Regulatory Commission shall order it to rectify the matter within a specified period of time. If it fails to rectify the matter within the specified period of time or if its acts seriously jeopardize its stable operations or prejudice the lawful rights and interests of beneficiaries, the China Banking Regulatory Commission may, depending on the circumstances and pursuant to laws and regulations, such as the PRC Banking Regulation Law, take regulatory measures against it, such as ordering it to suspend operations and placing restrictions on shareholder rights.

Article 55: If a trust company is facing or could face a credit crisis that seriously affects the lawful rights and interests of beneficiaries, the China Banking Regulatory Commission may, in accordance with the law, put it into receivership or urge it to restructure.

Article 56: If the China Banking Regulatory Commission discovers, after approving the establishment, changes or termination of business of a trust company, that the original application materials concealed information or contained false information, it may order correction thereof or revoke the approval.

Article 57: Trust companies may join the China Trustee Association so as to carry out self-regulation.

When the China Trustee Association conducts activities, it shall accept the guidance and supervision of the China Banking Regulatory Commission.

PART SIX: PENAL PROVISIONS

Article 58: If a trust company is established without the approval of the China Banking Regulatory Commission, the China Banking Regulatory Commission shall close it down in accordance with the law. If a criminal offence is established, criminal liability shall be pursued in accordance with the law. If a criminal offence is not established, the China Banking Regulatory Commission shall confiscate the illegal income. If the illegal income totals Rmb500,000 or more, the China Banking Regulatory Commission shall impose a fine of not less than the amount of the illegal income and not more than five times the illegal income. If there is no illegal income or if it totals less than Rmb500,000, the China Banking Regulatory Commission shall impose a fine of not less than Rmb500,000 and not more than Rmb2 million.

Article 59: If a trust company establishes a branch or sub-branch without the approval of the China Banking Regulatory Commission or engages in the prohibited business specified in Article 19, 20, 21, 22, 33 or 34 hereof, the China Banking Regulatory Commission shall order it to rectify the matter. If there is illegal income, the China Banking Regulatory Commission shall confiscate such income, and impose a fine of not less than the amount of the illegal income and not more than five times the illegal income if the illegal income totals Rmb500,000 or more. If there is no illegal income or if the illegal income totals less than Rmb500,000, the China Banking Regulatory Commission shall impose a fine of not less than Rmb500,000 and not more than Rmb2 million. If the circumstances are particularly grievous or if the trust company fails to rectify within the specified period of time, the China Banking Regulatory Commission shall order it to suspend operations and undergo rectification or revoke its finance permit. If a criminal offence is established, criminal liability shall be pursued in accordance with the law.

Article 60: If a trust company violates another provision hereof, the China Banking Regulatory Commission shall impose the attendant penalties pursuant to laws and regulations such as the PRC Banking Regulation Law.

Article 61: If a trust company operates in violation of the law, its operations and management are incompetent, etc. and failing to close it down would seriously jeopardize the financial order and harm the public good, the China Banking Regulatory Commission shall close it down in accordance with the law.

Article 62: The China Banking Regulatory Commission may, depending on the circumstances and pursuant to laws and regulations such as the PRC Banking Regulation Law, punish the directors and senior management personnel who are directly liable for a violation of regulations by a trust company and other directly responsible persons by fining them, revoking their qualifications for their positions or their professional qualifications, etc.

Article 63: Those that are dissatisfied with the punishment decision of the China Banking Regulatory Commission may apply for administrative review or institute an administrative action in a people's court in accordance with the law.

PART SEVEN: SUPPLEMENTARY PROVISIONS

Article 64: If a trust company does not perform the management duties itself, i.e. it does not assume the duties of investment manager, in handling trust matters, its registered capital may not be less than Rmb100 million or the equivalent in a freely convertible currency. The regulation of such trust companies shall be handled mutatis mutandis in accordance herewith.

Article 65: The China Banking Regulatory Commission shall be responsible for interpreting these Measures.

Article 66: These Measures shall be effective as of March 1 2007. The former Measures for the Administration of Trust and Investment Companies (Order of the PBOC [2002] No.5) shall no longer be applicable.