China Securities Regulatory Commission, Measures for the Administration of Securities Investment Fund Management Companies (Amended)

Promulgated: September 20 2012
Effective: November 1 2012

Applicability: For the purposes of these Measures, the term “securities investment fund management company” (a Fund Management Company) means an enterprise with legal personality established in the People's Republic of China with the approval of the China Securities Regulatory Commission (the CSRC) that engages in securities investment fund management business and other business permitted by the CSRC (Article 2).

For the purposes of these Measures, the term “Sino-foreign equity joint venture Fund Management Company” includes both Fund Management Companies that are jointly invested in and established by foreign shareholders and domestic shareholders and Fund Management Companies so converted by virtue of a foreign shareholder acquiring or subscribing for equity in a domestic Fund Management Company (Article 79).

Main contents: To establish a Fund Management Company, the registered capital may not be less than Rmb100 million, shareholders shall pay in their capital in cash and foreign shareholders shall make their capital contributions in a freely convertible currency (Article 6); shareholders whose capital contribution or shareholding accounts for at least 5% of the registered capital of the Fund Management Company (Shareholding Percentage) shall have registered capital and net assets of not less than Rmb100 million (Article 7); and the majority shareholder that holds the highest percentage of the equity of the Fund Management Company, and of not less than 25%, shall have registered capital of not less than Rmb300 million (Article 8)

The paid-in capital of a foreign shareholder of a Sino-foreign equity joint venture Fund Management Company shall not be less than the equivalent of Rmb300 million in a freely convertible currency (Article 9).

Where one organisation or a multiple of organisations controlled by the same de facto controller take an equity stake in Fund Management Companies, the number of Fund Management Companies may not exceed two and the number of those that are being controlled may not exceed one (Article 11).

A Fund Management Company may, based on professional operation and management requirements, establish subsidiaries, branches, or establishments in other forms specified by the CSRC.

A subsidiary may engage in specific client asset management, fund sale and other business permitted by the CSRC. A branch, or establishment in another form specified by the CSRC, may engage in the development of fund products, fund sale and other business authorised by the Fund Management Company (Article 29).

Where the Shareholding Percentage of a single shareholder of a Fund Management Company, or of affiliated shareholders, totals at least 50%, the directors affiliated with such shareholder(s) may not exceed one-third of the directors on the board of directors of the Fund Management Company (Article 41).