Provisions on Issues Relevant to the Implementation of the «Measures for the Administration of Securities Investments in China by Qualified Foreign Institutional Investors»

(1) an asset management institution shall have been engaged in the asset management business for at least two years and in the most recent financial year shall have had not less than US$500 million in securities assets under its management;

(2) an insurance company shall have been established for at least two years and in the most recent financial year shall have had not less than US$500 million in securities assets;

(3) a securities company shall have been engaged in the securities business for at least five years, have net assets of not less than US$500 million and in the most recent financial year shall have had not less than US$5 billion in securities assets under its management;

(4) a commercial bank shall have been engaged in the banking business for at least 10 years, have Tier 1 capital of not less than US$300 million and in the most recent financial year shall have had not less than US$5 billion in securities assets under its management; or

(5) another institutional investor (pension fund, charitable foundation, endowment fund, trust company, government investment management company, etc.) shall have been established for at least two years and in the most recent financial year shall have had not less than US$500 million in securities assets under its management or held not less than US$500 million in securities assets.

2. When applying for QFII status, the following application materials shall be submitted by an electronic means through the China Securities Regulatory Commission (CSRC) website and a set of written application documents with identical contents shall be submitted to the CSRC:

(1) an application form;

(2) a form listing the basic particulars of the main persons-in-charge;

(3) an investment plan;

(4) an explanation of the source of the funds;

(5) a statement on whether the applicant has had major penalties imposed by the regulatory authority in the most recent three years or since establishment;

(6) (a photocopy of) the business licence issued by the country or region where it is located;

(7) (a photocopy of) the finance business permit issued by the regulatory authority of the country or region where it is located;

(8) the custodian's power of attorney;

(9) audited financial statements for the most recent year; and

(10) other documents as required by the CSRC.

If the documents specified in the preceding paragraph are signed by the authorised representative of the legal representative of the applicant (the term “legal representative” means the natural person, e.g. chairman of the board or chief executive officer, etc., who, as authorised by the board of directors of the applicant or in accordance with the applicant's articles of association or the laws of the country or region where the applicant is located, may represent the applicant in handling matters relating to the administration of securities investments in China by QFIIs), the power of attorney issued to the authorised representative by the legal representative shall be presented.

The power of attorney and the documents specified in Items (6) and (7) of the first paragraph shall require a notarial certificate issued by a notary office or lawyer statutorily recognised by the country or region where the applicant is located or authentication by the embassy or consulate of the People's Republic of China in such country. Any of the documents specified in Items (3), (4) and (5) of the first paragraph written in a foreign language shall be accompanied with a Chinese translation.

If a material event specified in Article 30 of the Measures for the Administration of Securities Investments in China by Qualified Foreign Institutional Investors occurs, the QFII shall file the same by an electronic means through the CSRC website for the record in a timely manner.

3. The securities investment business permit of a QFII shall be valid in perpetuity, unless otherwise specified in laws or regulations or by the CSRC or the CSRC revokes its permit in accordance with the law.

4. When applying for QFII custodian status, the following application documents shall be submitted to the CSRC (one original and one duplicate):

(1) an application form (see the Appendix);

(2) custodian status application (bearing the applicant's official seal or signed by its legal representative);

(3) (a photocopy of) the opinion of the China Banking Regulatory Commission on the applicant's engagement in the custodial service for securities investments in China by QFIIs;

(4) (a photocopy of) the duplicate of the applicant's finance business permit and (a photocopy of) the duplicate of its business licence;

(5) proof of its paid-in capital;

(6) basic particulars of its domestic custody department (including human resources, security assurance measures, etc.);

(7) management rules and regulations for the custody business (mainly including the custody business management measures, internal risk control system, job responsibilities and operating rules, employees' code of conduct, accounting measures and information system management system, etc.);

(8) an explanation of having an efficient, rapid, secure and reliable technical system and the relevant supporting documentation; and

(9) other documents required by the CSRC and Safe in line with the requirements of prudent regulatory principles.

5. The custodian of a QFII must be replaced if:

(1) the QFII has sufficient reason to believe that replacing the custodian would be in its interests; or

(2) the CSRC and/or Safe determine(s), in line with prudent regulatory principles, that the custodian cannot continue to perform its custodial duties and responsibilities.

The incoming and outgoing custodians shall report relevant information to the CSRC and Safe for the record within three working days after the outgoing custodian finishes its service.

6. A QFII shall appoint its custodian to apply to the China Securities Depository and Clearing Corporation Limited (CSDC) to open securities accounts. A QFII may open multiple securities accounts. The securities accounts applied for shall correspond with the special renminbi accounts approved by Safe.

The QFII shall open and use its securities accounts in accordance with the operational rules of the CSDC and be responsible for management of such accounts.

7. A QFII shall separately apply to open securities accounts for its own funds and clients' funds under its management.

When a QFII opens a securities account for its client's funds, the account name may be in the form “QFII + the client's name”. When a QFII applies to open a securities account for long-term funds under its management, such as a public foundation, insurance capital, pension fund, charitable foundation, endowment fund and government investment funds, the account name may be in the form “QFII + fund (or insurance capital, etc.)”. The account assets shall vest in the “fund (insurance capital, etc.)” and be independent from the QFII and custodian.

Fund management companies in China may provide special client asset management services to QFIIs and open corresponding accounts. The investment scope shall comply with relevant provisions on QFIIs.

8. A QFII may invest in the following renminbi-denominated financial instruments within its approved investment limit:

(1) stocks, bonds and warrants traded or transferred on a stock exchange;

(2) fixed-return products traded on the interbank bond market;

(3) securities investment funds;

(4) stock index futures; and

(5) other financial instruments as permitted by the CSRC.

A QFII may participate in new share offerings, offerings of convertible bonds and subscriptions to subsequent offerings and rights issues.

9. The securities investments in China by offshore investors shall comply with the following limitations on shareholding percentages:

(1) the shares of a listed company held by a single offshore investor through a QFII may not exceed 10% of the company's total shares; and

(2) the total of the holdings of the A shares of a single listed company by all offshore investors may not exceed 30% of such company's total shares.

If an offshore investor makes a strategic investment in a listed company pursuant to the Measures for the Administration of Strategic Investments in Listed Companies by Foreign Investors, its strategic investment shareholding shall not be subject to the aforementioned limitations.

10. If the securities investments in China by an offshore investor reaches a level that triggers information disclosure requirements, as a party with an information disclosure obligation, it shall disclose information to the stock exchange through the QFII. The QFII is under obligation to ensure that the offshore investors under its name strictly abide by relevant provisions on information disclosure.

11. A QFII may itself exercise or appoint its custodian, a domestic securities company, the secretary of the board of directors of the listed company in question, an independent director of the listed company in question or an offshore investor under its name to exercise its shareholder rights.

12. When a QFII is to exercise its shareholder rights, it shall present the following supporting documents to the listed company:

(1) the original or a photocopy of its securities investment business permit;

(2) the original or a photocopy of its securities account card;

(3) the proof of identity of the person who will actually exercise the rights; and

(4) if the QFII has authorised another party to exercise its shareholder rights, a power of attorney signed by the authorised representative shall be provided in addition to the aforementioned materials (if the QFII authorises an offshore investor under its name to exercise its shareholder rights, it shall provide an appropriate shareholding statement signed by the QFII's authorised representative).

13. Each QFII may appoint three domestic securities companies to carry out securities trading on the Shanghai Stock Exchange and three on the Shenzhen Stock Exchange.

14. These Provisions shall be effective as of date of promulgation. The Circular on Issues Relevant to the Implementation of the China by Qualified Foreign Institutional Investors> issued on August 24 2006 shall be repealed simultaneously.

Appendix:

附件：

编号
(No.):

合格境外机构投资者托管人资格申请表

APPLICATION FORM FOR THE QUALIFICATION TO ACT AS A CUSTODIAN FOR QUALIFIED FOREIGN INSTITUTIONAL INVESTORS

致：
To:

申请人：

Applicant：

重要声明：本申请人董事会保证本申请所载材料不存在任何虚假记载、误导性陈述或者重大遗漏，并对内容的真实性、准确性和完整性承担法律责任。

Important declaration: Our board of directors warrants that the information contained in this application is free of any false records, misleading statements or material omissions and that it will bear the legal liability for the truthfulness, accuracy and completeness of such information.

（说明：除非另有标明，请用中文填写本表。）

(Remark: unless otherwise indicated, please complete this form in Chinese.)

clp reference:3700/12.07.27prc reference:证监会公告[2012]17号promulgated:2012-07-27effective:2012-07-27