Measures for the Administration of the Operation of Publicly Offered Securities Investment Funds

Article 2: These Measures shall apply to the offering of Funds, the purchase, redemption and trading of Fund shares, the investment of Fund property, the distribution of Fund earnings, the convening of Fund shareholders' general meetings and other Fund operation activities.

Article 3: When engaging in Fund operation activities, laws, administrative regulations and the regulations of the China Securities Regulatory Commission (CSRC) as well as the principles of free will, fairness and good faith shall be observed and the interests of the state and the public interest may not be harmed.

When using Fund property to invest in securities, a Fund manager shall comply with the rules of prudent operation, formulate an objective and rational investment strategy and risk management systems, and effectively guard against and control risks.

Article 4: The CSRC and its agencies shall regulate Fund operation activities in accordance with laws, administrative regulations and these Measures as well as the principle of prudent regulation.

When conducting a review for the registration of a Fund offering, the CSRC shall treat the crucial documents being in order and their contents being compliant as the basis, the adequate disclosure of information and investor suitability as the core, and strengthening protection of the interests of investors and guarding against systemic risks as the objectives. The CSRC shall not render a substantive determination of, or give warranties as to, the investment value or market prospects of a Fund. Investors shall carefully read the Fund prospectus, Fund contract and other such information disclosure documents, assess the investment value of the Fund and make their investment decision at their sole discretion, and solely bear the investment risks.

Article 5: The Fund industry association shall be responsible for the self-regulation of Fund operation activities in accordance with laws, administrative regulations and the rules of self-regulation.

Part Two: Offering of Funds

Article 6: When applying to offer a Fund, the proposed Fund manager and Fund custodian shall satisfy the following conditions:

(1) the proposed Fund manager shall be a Fund management company established in accordance with the law or other organisation approved by the CSRC and the proposed Fund custodian shall be a commercial bank with Fund custodianship qualifications or other financial institution approved by the CSRC;

(2) they have professional personnel such as Fund managers, etc. commensurate with the management and taking custody of the proposed Fund and who comply with the provisions of the CSRC;

(3) they have not been subjected to administrative penalties or criminal punishment in the last year for a major violation of laws or regulations or a major breach of faith;

(4) they have not had a case opened against it and are being investigated by the regulator or a judicial authority, and are not currently undergoing rectification for a violation of laws or regulations or a breach of faith;

(5) the application materials submitted to the CSRC for the registration of Funds during the last year do not contain false records, misleading statements or material omissions;

(6) they are not characterised by a material change that is or could be detrimental to Fund operations, or involved in legal proceedings, arbitration proceedings or other such material matter;

(7) they are not exposed to any major operational risks, such as unsound corporate governance structure, operations and/or management that are in disarray, ineffective implementation of their internal control or risk control systems, deteriorating financial position, etc.; and

(8) other conditions imposed by the CSRC in accordance with the principle of prudent regulation.

Article 7: When applying for a Fund offering, such Fund shall meet the following conditions;

(1) it has a clear and lawful investment direction;

(2) it has a clear Fund operation method;

(3) it complies with the CSRC's provisions on Fund products;

(4) the drafts of legal documents such as the Fund contract and prospectus comply with laws, administrative regulations and the provisions of the CSRC;

(5) the Fund's name indicates the type of Fund and its investment characteristics and is free of contents that are detrimental to the interests of the state or the public interest, defrauds or misleads investors or other contents that infringes upon the lawful rights and interests of third parties;

(6) its prospectus truthfully, accurately and fully discloses the key information required by investors to make investment decisions, does not contain false records, misleading statements or material omissions, its language is clear, easily understandable and practical, and is in keeping with investors' comprehension;

(7) it has an investor suitability management system that is in keeping with the features of the Fund, has clear methods for implementing the investor suitability arrangements such as investor characterisation, differentiation and assessment, and has a clear risk warning;

(8) the systems for business stages such as Fund investment management, sale, registration and valuation are sound, the operations are compliant, the preparations for technical systems are sufficient, and no circumstances exist that could affect the normal operation of the Fund, that are detrimental to or could prejudice the lawful rights and interests of Fund shareholders or that could trigger systemic risks; and

(9) other conditions as specified by the CSRC.

Article 8: When applying to offer a Fund, the Fund manager shall submit the application materials in accordance with the Securities Investment Fund Law and the provisions of the CSRC. From the time the application materials have been administratively accepted, the Fund manager, Fund custodian and relevant intermediary firms shall bear the attendant legal liability for the truthfulness, accuracy and completeness of such materials.

The intermediary firms that issue documents, such as legal opinions, in respect of the Fund application materials shall act with due diligence, and check and validate the truthfulness, accuracy and completeness of the documents and information on which they rely.

Relevant contents of the application materials may not be casually modified once accepted. If a major change occurs in a matter referred to in the application materials during the application period, the Fund manager shall submit updated materials to the CSRC within five working days of the date the change occurred.

Article 9: The CSRC shall, pursuant to the Administrative Permission Law and Article 55 of the Securities Investment Fund Law, accept applications for the registration of the offering of Funds, conduct its review, render a decision on whether or not to grant registration and notify the applicant. If it withholds registration, it shall give its reasons therefor.

Article 10: In the course of its registration review, the CSRC may, depending on the circumstances, seek the opinion of the Fund industry association, the stock exchange, the securities depository and clearing institution, etc. to be used for reference in its registration review.

Article 11: The Fund offer period may not exceed three months counting from the date on which the Fund shares are offered for sale.

Article 12: If the total quantity of Fund shares subscribed for complies with Article 59 of the Securities Investment Fund Law and satisfies the conditions set forth below at the expiration of the Fund offer period, the Fund manager shall carry out the capital verification and Fund record filing procedures in accordance with provisions: the total quantity of Fund shares subscribed for is not less than 200 million, the proceeds of the Fund offer are not less than Rmb200 million and the number of Fund shareholders is not less than 200.

A seed Fund shall not be subject to the aforementioned restrictions. The term “seed Fund” means that, when offering the Fund, the amount of funds of the company's shareholders, the company's own funds and the funds of persons such as the company's senior management personnel or Fund managing personnel used by the Fund manager to subscribe for the Fund is not less than Rmb10 million, and the holding period is not less than three years. If the net asset value of a seed Fund is less than Rmb200 million three years after the entry into effect of the Fund contract, the Fund contract shall automatically terminate.

Article 13: The CSRC shall confirm in writing the receipt of the capital verification report and Fund record filing materials from the Fund manager within three working days of the date of receipt of the same. The Fund record filing procedures shall be deemed completed and the Fund contract shall enter into effect on the date of the CSRC's written confirmation.

The Fund manager shall publicly announce the receipt of the CSRC's confirmation document on the day following the receipt thereof.

Article 14: The information disclosure fees, accountants' fees, lawyers' fees and other expenses incurred during the Fund offer period may not be disbursed from the Fund property. If the Fund charges a subscription fee, the foregoing expenses may be disbursed from the subscription fees.

Part Three: Purchase, redemption and trading of fund shares

Article 15: The Fund contract for an open-ended Fund shall specify, and its prospectus state, the dates (Open Dates) and times the Fund manager will process purchases and redemptions of Fund shares. When handling Fund share purchase and redemption transactions, the Fund manager shall comply with the principle of prioritising the interests of Fund shareholders, and if a purchase or redemption would prejudice the interests of holders, it shall suspend the purchase or redemption transaction in a timely manner.

Article 16: With the exception of special Fund products specified by the CSRC, the Fund contract for an open-ended Fund may specify that the Fund manager will not process redemptions for a fixed period commencing from the effective date of the Fund contract, provided that the specified period does not exceed three months. Such period shall be stated in the prospectus.

Article 17: The price for purchasing or redeeming the shares of an open-ended Fund shall be calculated by adding or subtracting the relevant fees to/from the net value of the Fund shares on the purchase or redemption date. The specific method of calculating the purchase and redemption prices of the shares of an open-ended Fund shall be stated in the Fund contract and prospectus.

The net value of the shares of an open-ended Fund shall be calculated by dividing the net value of the Fund assets by the number of outstanding shares of the Fund after the closing of the market on each Open Day. The specific calculation method shall be stated in the Fund contract and prospectus.

Article 18: The Fund manager may not process the purchase, redemption or conversion of Fund shares on a date or at a time other than those specified in the Fund contract.

Where an investor submits an application to purchase, redeem or convert Fund shares on a date and time other than those specified in the Fund contract, the price for the purchase or redemption of his/her/its Fund shares shall be the price effective at the time the purchase or redemption of the Fund shares is processed on the next Open Day.

Article 19: When an investor purchases Fund shares, he/she/it must pay the entire purchase amount. A purchase shall be completed upon payment of the purchase amount by the investor, and enter into effect when the Fund shares are confirmed by the Fund share registration organisation. A redemption shall be completed upon submission of the redemption application by the Fund shareholder, and enter into effect when the redemption is confirmed by the Fund share registration organisation. Special Fund products specified by the CSRC are excluded from the foregoing.

The Fund shares of an open-ended Fund that invests in portfolio securities corresponding to a certain index or other investment target specified in the Fund contract may be purchased or redeemed in the portfolio securities, cash or other consideration specified in the Fund contract. The consideration for the purchase or redemption of Fund shares shall be determined based on the asset portfolio of the Fund and the net value of the Fund shares on the purchase or redemption date. The specific calculation method shall be specified in the Fund contract and prospectus. The listing, trading, purchase, redemption and cash settlement of Fund shares shall comply with relevant provisions of the stock exchange, the securities depository and clearing institution, etc.

Article 20: With the exception of special Fund products specified by the CSRC, the Fund manager shall confirm the validity of a purchase or redemption within three working days of the date of receipt of the investor's purchase or redemption application.

The Fund manager shall pay the redemption amount to the investor within seven working days of the date of receipt of the investor's valid redemption application, except in the case of special Fund products specified by the CSRC.

Article 21: The Fund contract for an open-ended Fund may specify that once the Fund reaches a certain size, the Fund manager will not accept any further subscription or purchase applications, provided that the same is stated in the prospectus.

During the Fund offer period, the Fund manager may not alter the size of the Fund as specified in the Fund contract. After the Fund contract has entered into effect, the Fund manager may alter the size of the Fund pursuant to the provisions of the Fund contract and in accordance with actual circumstances provided that it publicly announces the same three days in advance and updates the prospectus.

Article 22: The Fund contract for an open-ended Fund may impose a limit on the percentage or quantity of Fund shares that may be held by one Fund shareholder, provided that the same is stated in the prospectus.

Article 23: With the exception of special Fund products specified by the CSRC, net redemption applications exceeding 10% of the total number of shares of a Fund on any Open Day of an open-ended Fund are deemed a massive redemption.

If an open-ended Fund experiences a massive redemption, the redeemed shares processed by the Fund manager on the date in question may not be less than 10% of the total number of Fund shares, while the processing of the remaining redemption applications may be delayed.

Article 24: If an open-ended Fund experiences a massive redemption, the Fund manager shall determine the number of shares of a single Fund shareholder that it will process on the date in question in accordance with the percentage of the total shares, for which redemption was applied on that date, accounted for by the shares the redemption of which the Fund shareholder applied for.

A Fund shareholder may opt, at the time of application for redemption, to have redemption of those shares not redeemed on the day in question cancelled. If a Fund shareholder does not opt for cancellation, the Fund manager may delay the processing of the unprocessed shares to be redeemed until the next Open Day. The redemption price shall be that effective on the next Open Day.

Article 25: If an open-ended Fund experiences a massive redemption and the delayed processing of redemptions, the Fund manager shall notify the Fund shareholders by mail, facsimile or other method specified in the prospectus of the method by which it will handle the foregoing and publicly announce the same in the designated media within three trading days.

Article 26: If an open-ended Fund experiences consecutive massive redemptions, the Fund manager may suspend acceptance of redemption applications in accordance with the provisions of the Fund contract and as specified in the prospectus. Payment of the redemption amounts for redemption applications that have been accepted may be delayed provided that such delay does not exceed 20 working days and that it is publicly announced in the designated media.

Article 27: The Fund contract for an open-ended Fund may specify that if the number of shares the redemption of which a single Fund shareholder applies for on any Open Day exceeds a certain percentage of the total Fund shares, the Fund manager may suspend acceptance of redemption applications or delay payment in accordance with Article 26 hereof.

Article 28: Open-ended Funds shall keep on hand the equivalent of not less than 5% of the net value of the Fund assets in cash or in government bonds with a maturity date of less than one year for the purpose of paying redemption amounts to Fund shareholders, except in the case of special Fund products specified by the CSRC.

Article 29: Fund shares may be listed and traded on a stock exchange in accordance with the law, or transferred on an exchange recognised by the CSRC or by other means in accordance with laws, regulations and the Fund contract.

Part Four: Fund investments and distribution of earnings

Article 30: The Fund contract and prospectus shall state the type of Fund in accordance with the following provisions:

(1) if more than 80% of the Fund assets are to be invested in stocks, it is deemed a stock Fund;

(2) if more than 80% of the Fund assets are to be invested in bonds, it is deemed a bond Fund;

(3) if investments are to be made only in money-market instruments, it is deemed a money-market Fund;

(4) if at least 80% of the Fund assets are to be invested in the shares of other Funds, it is deemed a Fund of Funds;

(5) if investments are to be made in stocks, bonds and money market instruments or the shares of other Funds and the percentages of the stock investments, bond investments and Fund investments do not comply with those specified in Items (1), (2) and (4) above, it is deemed a hybrid Fund:

(6) other types as specified by the CSRC.

Article 31: If a Fund's name indicates its investment direction, not less than 80% of non-cash Fund assets shall be in the form determined by the investment direction.

Article 32: When a Fund manager applies Fund property to invest in securities, the following is not allowed:

(1) the market value of the securities of one company held by a Fund exceeds 10% of the net value of the Fund assets;

(2) the issued securities of one company held by all the Funds managed by one Fund manager exceed 10% of such securities;

(3) if Fund property is to be used for the purchase of shares offered in a share offering, the monetary amount applied for by a single Fund exceeds such Fund's total assets and the number of shares applied for by a single Fund exceeds the total number of shares that the share issuing company intends to offer through such offering;

(4) a Fund holds other Funds (excluding money market Funds), the market value of which exceeds 10% of the net value of the Fund assets, Funds of Funds excepted;

(5) a Fund of Funds holds another Fund, the market value of which exceeds 20% of the net value of the Fund assets, or invests in another Fund of Funds;

(6) the total assets of the Fund exceed 140% of its net assets;

(7) it violates the provisions of the Fund contract on the scope of investment, investment strategy or investment percentages; or

(8) it is characterised by other circumstances as prohibited by the CSRC.

Fund products that invest in securities based entirely on the constituent percentages of the relevant index shall not be subject to the percentage limits specified in Items (1) and (2) of the preceding paragraph.

If a Fund manager uses Fund property to invest in securities derivatives, it shall do so in accordance with risk management principles and formulate a strict authorisation management system and investment decision procedure. The specific percentage of Fund property used by a Fund manager to invest in securities derivatives shall comply with relevant CSRC provisions.

Other special Fund products provided for separately by the CSRC may be exempted from the above percentage restrictions.

Article 33: If a Fund manager is to use Fund property to trade securities offered or underwritten during the underwriting period by the Fund manager or Fund custodian or the controlling shareholder or de facto controller thereof or a company with a material interest therein, or engages in other material affiliated transactions, the same shall comply with the investment objectives and investment strategy of the Fund, abide by the principle of prioritising the interests of Fund shareholders and guard against conflicts of interest; an internal examination and approval mechanism and valuation mechanism shall be established and improved therefor and the transaction shall be carried out at a reasonable and fair market price. The consent of the Fund custodian for the relevant transaction must be secured in advance and the same disclosed in accordance with laws and regulations. A material affiliated transaction shall be referred to the board of directors of the Fund manager for deliberation and require the consent of at least two-thirds of its independent directors for adoption. The board of directors of the Fund manager shall conduct a review of affiliated transaction matters at least once each half year.

Article 34: A Fund manager shall cause a Fund's investment portfolio percentages to comply with the relevant provisions of the Fund contract within six months of the effective date of such contract. During such period, the investment scope and investment strategy of the Fund shall comply with the provisions of the Fund contract.

Article 35: If a Fund's investments fail to comply with the percentages specified in Article 32 hereof or the investment percentages specified in the Fund contract due to factors not attributable to the Fund manager, such as stock market volatility, mergers of listed companies or changes in the size of the Fund, the Fund manager shall make adjustments within 10 trading days, unless a special circumstance specified by the CSRC applies.

Article 36: The following Fund-related expenses may be disbursed from the Fund property:

(1) the Fund manager's management fee;

(2) the Fund custodian's custody fee;

(3) accountants' fees and lawyers' fees incurred after the Fund contract enters into effect;

(4) expenses of Fund shareholders' general meetings;

(5) the Fund's securities trading expenses; and

(6) other expenses that may be disbursed from the Fund property in accordance with relevant state provisions and the Fund contract.

The Fund manager may, in keeping with the principle of accordance with the interests of the Fund shareholders and in conjunction with the features of the product and the demand of investors, set the structure for, and level of, the Fund management fee rates.

Article 37: The earnings of a closed-end Fund may not be distributed less than once per year. The percentage of the annual earnings of a closed-end Fund that are to be distributed may not be less than 90% of the distributable profit by the Fund in the year in question.

The distribution of earnings of an open-ended Fund shall be specified in the Fund contract.

Article 38: With the exception of special Fund products specified by the CSRC, Fund earnings shall be distributed in cash.

Holders of shares in an open-ended Fund may opt in advance to have the cash earnings distributed to them converted into Fund shares in accordance with the provisions of the Fund contract on the purchase of Fund shares. If a Fund shareholder has not expressed an option in advance, the Fund manager shall pay him/her/it in cash.

Part Five: Change in operation method and merger of funds, and registration amendments

Article 39: If a Fund changes its method of operation or merges with another Fund, the same shall be carried out by the procedure specified in laws, regulations and the Fund contract. If the implementation plan is not expressly provided for in the Fund contract, it shall be subject to deliberation and adoption by the Fund shareholders' general meeting. The Fund manager shall issue an alert notice in advance, clarify the relevant implementing plan, explain its effect on the current Fund shareholders and the options available to them (e.g. redemption, transfer or sale) and, before proceeding, allow at least 20 Open Days or trading days for Fund shareholders to make their choice.

Article 40: If, after the registration of a Fund, a material revision needs to be made to a registered particular, the relevant procedures shall be carried out in accordance with laws, regulations and the Fund contract. If public offering of the Fund is to continue, an application for the amendment of registered particulars shall be submitted to the CSRC in accordance with the Administrative Permission Law before the public offering. Without registration, a Fund may not be publicly offered or publicly offered in a disguised manner.

Article 41: If an open-ended Fund is established in accordance with the first paragraph of Article 12 hereof and, after the entry into effect of the Fund contract, the number of Fund shareholders remains below 200 or the net value of the Fund assets less than Rmb50 million for 20 working days in succession, the Fund manager shall disclose the same in the regular report; if either of the aforementioned circumstances persists for 60 days in succession, the Fund manager shall submit a report and propose a solution to the CSRC, such as change of method of operation, merger with another Fund or termination of the Fund contract, and convene a Fund shareholders' meeting for a vote.

If a seed Fund is established in accordance with the second paragraph of Article 12 hereof and it remains in existence three years after the entry into effect of the Fund contract, matters shall be handled in accordance with the preceding paragraph.

Part Six: Fund shareholders' general meeting

Article 42: In addition to the matters specified in Items (1) to (4) of Article 48 of the Securities Investment Fund Law, Fund contracts shall specify in accordance with the provisions of the CSRC other matters that have a material impact on the rights and obligations of the parties to the Fund contract and require that a Fund shareholders' general meeting be convened.

Article 43: If the Fund shareholders' general meeting has not established a permanent office and the Fund custodian is of the opinion that the convening of a Fund shareholders' general meeting is necessary, it shall submit a written motion to that effect to the Fund manager. The Fund manager shall decide whether or not to convene such meeting and inform the Fund custodian in writing within 10 days of the date of receipt of the written motion.

If the Fund manager decides to convene a meeting, it shall do so within 60 days of the date of issuance of its written decision. If the Fund manager decides against convening a meeting and the Fund custodian is still of the opinion that the convening of such a meeting is necessary, it shall proceed to convene the meeting itself within 60 days of the date of issuance of its written decision and inform the Fund manager thereof. The Fund manager shall offer its cooperation.

Article 44: If the Fund shareholders' general meeting has not established a permanent office and Fund shareholders representing not less than 10% of the Fund shares are of the opinion that the convening of a Fund shareholders' general meeting is necessary, they shall submit a written motion to that effect to the Fund manager. The Fund manager shall decide whether or not to convene such meeting and inform the representative of the Fund shareholders who submitted the motion and the Fund custodian in writing within 10 days of the date of receipt of the written motion.

If the Fund manager decides to convene a meeting, it shall do so within 60 days of the date of issuance of its written decision. If the Fund manager decides against convening a meeting and the Fund shareholders representing not less than 10% of the Fund shares are still of the opinion that the convening of such a meeting is necessary, they shall submit a written motion to the Fund custodian.

The Fund custodian shall decide whether or not to convene such a meeting and inform the representative of the Fund shareholders who submitted the motion and the Fund manager in writing within 10 days of the date of receipt of the written motion. If the Fund custodian decides to convene the meeting, it shall do so within 60 days of the date of issuance of its written decision.

Article 45: If the Fund shareholders' general meeting has established a permanent office, and the Fund manager, Fund custodian or Fund shareholders representing at least 10% of the Fund shares is(are) of the opinion that the convening of a Fund shareholders' general meeting is necessary, it(they) shall submit a written proposal to that effect to the permanent office.

The permanent office shall decide whether to convene a meeting and inform in writing the Fund manager, Fund custodian and the representative of the Fund shareholders that submitted the motion within 10 days from the date of receipt of the written motion. If the permanent office decides to convene the meeting, it shall do so within 60 days of the date of issuance of its written decision; if it decides not to convene the meeting, and the Fund manager, the Fund custodian or Fund shareholders representing at least 10% of the Fund shares is(are) still of the opinion that the convening of a Fund shareholders' general meeting is necessary, matters shall be handled in accordance with the provisions applying to the case where a permanent office has not been established.

Article 46: If the permanent office of the Fund shareholders' general meeting, the Fund manager and Fund custodian all decide against convening a Fund shareholders' general meeting, the Fund shareholders may convene such a meeting themselves in accordance with the second paragraph of Article 84 of the Securities Investment Fund Law.

If the Fund shareholders are to convene a Fund shareholders' general meeting themselves, they shall report the same to the CSRC for the record at least 30 days in advance.

Article 47: If the Fund shareholders are to convene a Fund shareholders' general meeting themselves in accordance with the law, the permanent office of the Fund shareholders' general meeting, the Fund manager and Fund custodian shall extend their cooperation and may not hinder the convening thereof or interfere.

Article 48: A Fund shareholder's general meeting may be held in person or by teleconference, etc. as specified in the Fund contract. The Fund manager and Fund custodian must make it convenient for Fund shareholders to exercise their voting rights.

The matters decided on at a Fund shareholders' general meeting shall enter into effect on the date on which they are voted on and adopted. The convener shall submit matters put to a vote and adopted at a Fund shareholders' general meeting in accordance with Article 87 of the Securities Investment Fund Law to the CSRC for the record within five days of the date of adoption thereof.

Article 49: The permanent office of the Fund shareholders' general meeting, the Fund manager, Fund custodian and Fund shareholders shall implement effective decisions of the Fund shareholders' general meeting.

Part Seven: Regulation and legal liability

Article 50: The CSRC and its agencies shall conduct regular or ad hoc inspections of the Fund operation activities engaged in by Fund managers and Fund custodians and the Fund managers and Fund custodians shall extend their cooperation therein.

Article 51: If a Fund manager or Fund custodian, or its manager directly in charge or other directly responsible person violates these Measures in engaging in Fund operation activities and, in accordance with the law, it/he/she ought to be subjected to administrative penalties, it/he/she shall be subjected to administrative penalties in accordance with laws and administrative regulations. If laws or administrative regulations do not provide therefor, administrative penalties shall be imposed in accordance with these Measures. If it/he/she is suspected of having committed a criminal offence, its/his/her case shall be transferred to the judicial authorities and its/his/her criminal liability shall be pursued.

Article 52: If a Fund manager or Fund custodian violates these Measures, the CSRC or its agency may take administrative regulatory measures against it such as giving it a regulatory lecture, issuing a warning letter, ordering rectification within a specified period of time, and, during the period of rectification, suspending the acceptance and review of its applications for the offering of Fund products or other business applications, and shall enter the same in its integrity file; and take administrative measures against the manager directly in charge and other directly responsible persons such as giving them a regulatory lecture, issuing a warning letter, suspending them from their positions or deeming them unfit for their relevant positions, and shall enter the same in their integrity files.

Article 53: If the application materials submitted to the CSRC by a Fund manager when registering a Fund contain contradictory information or different expressions of the same fact that are substantively different, the CSRC shall suspend its review, and cease to accept applications submitted by the Fund manager for the registration of Funds for a period of six months.

If the application materials submitted to the CSRC by a Fund manager, when registering a Fund, contain false records, misleading statements or material omissions, the CSRC shall refuse to accept them; if they have already been accepted, the CSRC will deny registration; if registration has been carried out but the Fund has yet to be offered, the CSRC will revoke the registration decision, cease to accept applications submitted by the Fund manager for the registration of Funds for a period of one year, take relevant administrative regulatory measures against the Fund manager, its manager directly in charge and other directly responsible persons and enter the same in their integrity files. If the circumstances are serious, it will give them a warning and/or impose a fine of up to Rmb30,000. If registration has been carried out and the Fund offered, the CSRC will impose penalties in accordance with Article 132 of the Securities Investment Fund Law.

If a Fund manager violates Article 40 hereof by failing to amend registration before the public offering, penalties shall be imposed in accordance with Article 128 of the Securities Investment Fund Law.

Article 54: If a Fund manager violates Article 32 hereof in using Fund property to invest in securities and the circumstances are serious, or violates Article 33 hereof in engaging in affiliated transactions, penalties shall be imposed in accordance with Article 130 of the Securities Investment Fund Law.

Article 55: If a Fund manager or Fund custodian fails to convene a Fund shareholders' general meeting in accordance with Article 42 or 43 hereof, it shall be punished in accordance with Article 133 of the Securities Investment Fund Law.

Article 56: If, in the course of engaging in Fund operation activities, any of the circumstances set forth below applies to a Fund manager, the CSRC may take relevant administrative regulatory measures against the Fund manager, its manager directly in charge and other directly responsible persons and enter the same in their integrity files; if the circumstances are serious, it may give a warning and/or impose a fine of up to Rmb30,000:

(1) it fails to sell Fund shares in accordance with Article 11 hereof;

(2) it fails to carry out capital verification and Fund record filing procedures in a timely manner in accordance with Article 12 hereof;

(3) it fails to carry out purchase and redemption transactions in accordance with Article 15 hereof resulting in damage to Fund property and harm to the interests of the Fund shareholders;

(4) it fails to calculate the price for purchasing or redeeming Fund shares in accordance with Article 17 hereof;

(5) it handles Fund share purchases, redemptions or conversions on a date or at a time other than that specified in the Fund contract in violation of Article 18 hereof;

(6) it fails to confirm the validity of a purchase or redemption or fails to pay the redemption amount in accordance with Article 20 hereof;

(7) it fails to process a redemption application in accordance with the second paragraph of Article 23 or the first paragraph of Article 24 hereof;

(8) it fails to keep on hand cash or government bonds in accordance with Article 28 hereof;

(9) it fails to adjust the investment percentages in accordance with Article 34 or 35 hereof;

(10) it fails to distribute Fund earnings in accordance with Article 37 or 38 hereof;

(11) it fails to carry out the procedures for changing the method of operation or the merger of the Fund in accordance with Article 39 hereof;

(12) it fails to report or explain relevant circumstances, submit a solution or convene a Fund shareholders' general meeting in accordance with Article 41 hereof; or

(13) a failure in its technical system occurs, affecting the normal operation of the Fund and harming the interests of the holders.

Article 57: If any of the circumstances set forth below applies to a Fund manager or Fund custodian, the CSRC may take relevant administrative regulatory measures against the Fund manager or Fund custodian, and its manager directly in charge and other directly responsible persons and enter the same in their integrity files. If the circumstances are serious, the CSRC may give a warning and/or impose a fine of up to Rmb30,000:

(1) it fails to itemise relevant expenses in accordance with Article 14 or 36 hereof;

(2) it fails to extend its cooperation to Fund shareholders in convening a Fund shareholders' general meeting in accordance with Article 47 hereof;

(3) it fails to file for the record matters decided at a Fund shareholders' general meeting in accordance with Article 48 hereof;

(4) it fails to implement the effective decisions of the Fund shareholders' general meeting in accordance with Article 49 hereof; or

(5) it fails to extend its cooperation, in accordance with Article 50 hereof, to the CSRC and/or its agency when they/it are/is carrying out an inspection.

Part Eight: Supplementary provisions

Article 58: A pooled asset management plan with more than 200 investors managed by a securities company must abide by provisions of the Securities Investment Fund Law prohibiting engagement in the funnelling of benefits, unfair trading, insider trading, etc. by managers and business personnel and shall handle matters with reference to the provisions hereof on guarding against conflicts of interest and protecting investors.

Article 59: These Measures shall be effective as of August 8 2014. The Measures for the Administration of the Operation of Securities Investment Funds (Order of the CSRC No.79) shall be repealed simultaneously.