Securities Association of China, Circular on Matters Relevant to the Regulation of the Cooperation between Securities Companies and Banks in Engaging in the Targeted Asset Management Business

中国证券业协会关于规范证券公司与银行合作开展定向资产管理业务有关事项的通知

September 10, 2013 | BY

CLP Temp &

Bank-securities company cooperation may not engage in fund pool business.

Clp Reference: 3700/13.07.19 Promulgated: 2013-07-19 Effective: 2013-07-19

Issued: July 19 2013

Effective: as of date of issuance

Applicability: For the purposes of this Circular, the term “bank and securities company cooperation in targeted business” (Targeted Business) means the business wherein a cooperating bank, as client, entrusts entrusted assets to a securities company to carry out targeted asset management, issues specific trading instructions to the securities company, which the securities company executes, and invests the entrusted assets in the subject assets designated by the cooperating bank (Article 1).

Main contents: It is forbidden to engage in Targeted Business specified in this Circular by way of a securities company sending an investment inquiry letter or written investment recommendation to the client and the client replying that it has no objection to the investment matter (Article 1).

None of the following circumstances may apply to a securities company engaging in Targeted Business:

(1) having a branch or business office independently engaging in asset management business, with the exception of asset management branches;

(2) engaging in fund pool business;

(3) investing entrusted assets in an industry in which investment is prohibited by the state, such as one that is highly polluting or one that is high energy consuming; or

(4) engaging in the funneling of benefits or commercial bribery (Article 2);

A cooperating bank shall have assets of not less than Rmb30 billion as at the end of the last year and a capital adequacy ratio of not less than 10% (Article 3).

Related legislation: Measures for Administration of the Client Asset Management Business of Securities Companies (Revised), Jun 26 2013, CLP 2013 No.4 p.46

clp reference:3700/13.07.19 issued:2013-07-19 effective:2013-07-19

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