The Measures for the Administration of Securities Investment Fund
Management Companies
The Measures for the Administration of Securities Investment Fund Management
Companies, as amended and adopted at the 19th chairman’s executive meeting of the
China Securities Regulatory Commission on June 19, 2012, are hereby issued, and
shall come into force on November 1, 2012.
Chairman of the China Securities Regulatory Commission: Guo Shuqing
September 20, 2012
Measures for the Administration of Securities Investment Fund Management
Companies
Chapter I General Provisions
Article 1 These Measures are formulated in accordance with the Securities
Investment Fund Law, the Company Law and other relevant laws and administrative
regulations for purposes of strengthening supervision over and administration of
securities investment fund management companies, regulating the acts of securities
investment fund management companies, and protecting the lawful rights and
interests of fund share holders and relevant parties concerned.
Article 2 For purposes of these Measures, “securities investment fund
management company” (hereinafter referred to as the “fund management company”)
means the enterprise as an legal person, which is established within the territory of the
People’s Republic of China with the approval of China Securities Regulatory
Commission (hereinafter referred to as the “CSRC”) and undertakes the securities
investment fund management business and other businesses approved by the CSRC.
Article 3 Fund management companies shall abide by laws, administrative
regulations, the provisions of the CSRC and the self-disciplinary rules of the Asset
Management Association of China, function in good faith, be prudent and diligent,
loyal and fulfill their responsibilities to manage and use fund property for the benefit
of fund share holders.
Article 4 The CSRC and its dispatched offices shall supervise and administer fund
management companies and their business activities in accordance with the Securities
Investment Fund Law, the Company Law and other laws, administrative regulations
and the provisions of the CSRC and under the principle of prudent supervision.
Article 5 The Asset Management Association of China shall conduct
self-disciplinary administration of fund management companies and their business
activities in accordance with laws, administrative regulations, and the provisions and
self-disciplinary rules of the CSRC.
Chapter II Establishment of Fund Management Companies
Article 6 The following requirements shall be met for the establishment of a fund
management company:
1. The shareholders comply with the provisions of the Securities Investment Fund
Law and these Measures;
2. has bylaws complying with the Securities Investment Fund Law, the Company Law
and the provisions of the CSRC;
3. The registered capital is not less than 100 million yuan, which shall be contributed
in full on the lump sum basis by shareholders, and foreign shareholders shall make
capital contribution in convertible currencies;
4. has appointed senior managers complying with laws, administrative regulations and
the provisions of the CSRC and personnel who undertake such businesses as research,
investment, appraisal and marketing, and the appointed senior managers and business
personnel are not less than 15 and shall have obtained the fund practicing
qualification;
5. has business premises and security facilities meeting relevant requirements and
other facilities relating to the business;
6. has set up organizations and work posts with reasonable division of work and clear
functions;
7. has such internal monitoring systems as supervision and audit and risk control,
which comply with the provisions of the CSRC; and
8. other conditions as prescribed by the CSRC with the approval of the State Council.
Article 7 To apply for the establishment of a fund management company, the
shareholders whose capital contribution or shareholding accounts for 5% or more of
the registered capital of the fund management company (hereinafter referred to as the
“shareholding proportion”) shall meet the following conditions:
1. The registered capital and net assets are not less than 100 million yuan and the
quality of the assets is in good condition;
2. have operated consecutively for more than three complete fiscal years, and have
sound corporate governance and internal monitoring rules;
3. have not been given any administrative punishment or criminal punishment due to
any violation of law or regulation in the last three years;
4. have not embezzled clients’ assets or committed any other conduct impairing
clients’ interests;
5. are not under investigation by the regulatory authority due to any violation of law
or regulation, nor are in the rectification period; and
6. have good social reputation, and have no bad records in the administrative
departments of financial supervision, taxation, industry and commerce and so on, and
such institutions as self-disciplinary management institutions and commercial banks
in the last three years.
Article 8 Major shareholders of a fund management company means the
shareholders whose shareholding proportion is the highest and not less than 25% in
the fund management company.
Major shareholders shall meet the following conditions in addition to the conditions
prescribed in Article 7 of these Measures:
1. engage in securities management, securities investment consulting, trust assets
management or other financial assets management businesses;
2. The registered capital is not less than 300 million yuan; and
3. have good business performance, and the quality of the assets is in good condition.
Article 9 In a Sino-foreign joint venture fund management company, the domestic
shareholder that has the highest shareholding proportion shall meet the conditions for
major shareholders as prescribed in Article 8 of these Measures. Other domestic
shareholders whose shareholding proportion is 5% or more shall meet the conditions
as prescribed in Article 7 of these Measures.
The foreign shareholder of a Sino-foreign joint venture fund management company
shall meet the following conditions:
1. It is a financial institution that is established in accordance with the law of the
country or region at the place where it is located, operates lawfully and continuously,
and has financial assets management experiences, steady and sound finance, and good
credit, and has not been punished by any regulatory authority or judicial organ in the
last three years;
2. The country or region at the place where the foreign shareholder is located has
complete securities laws and regulatory rules, and the securities regulatory authority
thereof has entered into the memorandum of understanding for securities regulatory
cooperation with the CSRC or any other institution recognized by the CSRC, and has
been keeping effective regulatory cooperative relations;
3. The paid-up capital is not less than the convertible currency equal to 300 million
yuan; and
4. other conditions as prescribed by the CSRC with the approval of the State Council.
The provisions in the preceding paragraph shall apply to the investment institutions in
Hong Kong Special Administrative Region, Macao Special Administrative Region
and Taiwan region.
Article 10 The shareholding proportion of shareholders of a fund management
company shall comply with the provisions of the CSRC. The aggregate shareholding
proportion or proportion of rights and interests owned (directly and indirectly) by the
foreign party of a Sino-foreign joint venture fund management company shall not
exceed those in the commitment made in the opening-up of China’s securities sector.
Article 11 The number of fund management companies in which one institution or
two or more institutions controlled by the same actual controller invest shall not
exceed two, of which the number of holding fund management companies shall not
exceed one.
Article 12 The applicant applying for establishing a fund management company
shall submit application materials for establishment in accordance with the provisions
of the CSRC.
Major shareholders shall organize and coordinate the matters relating to the
establishment of a fund management company, and shall assume major responsibility
for the truthfulness and completeness of application materials.
Article 13 Where, during the application period, there is any material change in
the matters involved in the application materials, the applicant shall submit updated
materials to the CSRC within five working days of such change. If there is any change
of shareholders, a new set of application materials shall be submitted.
Article 14 The CSRC shall, in accordance with the provisions of the
Administrative License Law and the Securities Investment Fund Law, accept the
application for establishing a fund management company, conduct examination and
make a decision.
Article 15 The CSRC may take the following ways to examine the application for
establishing a fund management company:
1. soliciting opinions from relevant institutions and departments from such aspects as
shareholders’ qualifications;
2. examining the contents of application materials by such ways as expert review and
inspection; or
3. conducting on-site inspection on the preparation for the establishment of the fund
management company within five months of the date of acceptance.
Article 16 Where the establishment of a fund management company has been
approved by the CSRC, the applicant shall undergo registration formalities at the
administrative department for industry and commerce within 30 days of the receipt of
approval documents, and obtain the Fund Management Qualification Certificate from
the CSRC based on the Business License for an Enterprise as a Legal Person issued
by the administrative department for industry and commerce.
A Sino-foreign joint venture fund management company shall also, in accordance
with the provisions of laws and administrative regulations, apply for the Approval
Certificate for a Foreign-funded Enterprise and open a foreign exchange capital
account.
A fund management company shall make an announcement on its establishment in the
newspapers and periodicals designated by the CSRC within ten days of the date when
it has undergone registration formalities at the administrative department for industry
and commerce.
Chapter III Modification and Dissolution of Fund Management Companies
Article 17 To modify any of the following major matters, a fund management
company shall report to the CSRC for approval:
1. modification of any shareholder holding 5% or more of its shares;
2. modification of any shareholder that holds less than 5% of its shares but has a
significant impact on corporate governance;
3. modification of more than 5% shareholding proportion of any shareholder;
4. amendment of important clauses of the company’s bylaws; or
5. other major matters as prescribed by the CSRC.
Article 18 After a fund management company modifies any shareholder,
registered capital or shareholding proportion of shareholders, shareholder’s conditions,
shareholding proportion of shareholders, the amount and registered capital of fund
management companies in which shareholders invest shall comply with the provisions
of the CSRC.
Article 19 A shareholder of a fund management company shall abide by the
following provisions when disposing equities:
1. The shareholder shall be honest and in good faith when transferring equities, shall
abide by the commitment made when subscribing or acquiring equities, and shall not
impair the lawful rights and interests of fund share holders;
2. The shareholder shall transfer equities in compliance with the provisions of the
Company Law, and shall not impair the lawful rights and interests of other
shareholders by taking such improper means as falsely reporting the transfer price;
3. The shareholder and the transferee shall specify relevant matters during the transfer
period, so as to ensure that it will not impair the lawful rights and interests of the fund
management company and fund share holders. The shareholder and the transferee
shall not dispose their equities by such ways as holding equities on behalf of others,
share custody, trust contract and secret agreement;
4. Where the matters concerning the modification of shareholders are not approved by
the CSRC or the relevant legal procedures have not been undergone, the transferor
shall continue to perform shareholders’ duties and assume corresponding
responsibility, and the transferee may not exercise shareholder’s rights in any form; or
5. other provisions as prescribed by laws, administrative regulations and bylaws of the
company.
Article 20 A shareholder must pay capital in currency in full for the registered
capital increased by a fund management company.
Article 21 Where a fund management company modifies any major matters, it
shall file a modification application in accordance with the provisions of the CSRC
within 60 days of the date when the board of directors or the shareholders’ meeting
(or assembly) makes a resolution. If the modification involves the equity transfer of
any shareholder, and the fund management company fails to file an application as
required, the relevant shareholder may file an application directly.
Article 22 The CSRC shall, in accordance with the provisions of the
Administrative License Law and the Securities Investment Fund Law, accept the
application of any fund management company for the modification of major matters,
conduct examination and make a decision.
Article 23 The CSRC may examine the application of a fund management
company for the modification of major matters by such ways as inquiring relevant
personnel, expert review and inspection.
For the modification of major shareholders of a fund management company,
modification of a shareholder whose aggregate shareholding proportion exceeds 50%,
or modification of a shareholder who has nominated the most directors, the CSRC
shall conduct examination by reference to the provisions of these Measures relating to
the establishment of a fund management company.
Article 24 Where any major modification matters of a fund management company
involves registration at the administrative department for industry and commerce, the
fund management company shall undergo modification registration formalities at the
administrative department for industry and commerce within 30 days of the receipt of
approval documents.
To change into a Sino-foreign joint venture company, a fund management company
shall also apply for the Approval Certificate for a Foreign-funded Enterprise in
accordance with relevant provisions and open a foreign exchange capital account.
Article 25 Senior managers of a fund management company shall be elected or
changed to another post in accordance with laws, administrative regulations and the
provisions of the CSRC.
Article 26 Where the major modification matters of a fund management company
involve the modification of content of the Fund Management Qualification Certificate,
the fund management company shall apply to the CSRC for renewing the Fund
Management Qualification Certificate.
Article 27 A fund management company shall make an announcement on major
modification matters in accordance with laws, administrative regulations and the
provisions of the CSRC.
Article 28 A fund management company may not be dissolved until the CSRC has
cancelled its fund management qualification.
A fund management company shall be dissolved in accordance with the Company
Law and other laws and administrative regulations.
Chapter IV Establishment, Modification and Revocation of Subsidiaries and
Branches of a Fund Management Company
Article 29 A fund management company may, based on the requirements for
specialized business operations and management, establish subsidiaries, branch
companies or branches of other forms as prescribed by the CSRC.
Subsidiaries may engage in asset management for particular clients, fund sales and
other businesses approved by the CSRC. Branch companies or branches of other
forms as prescribed by the CSRC may engage in the development of fund varieties,
fund sales, and other businesses authorized by the fund management company.
The fund management company shall, in consideration of its actual circumstances,
reasonably and prudently build and improve the business operation and management
organization model, conduct sufficient evaluation and demonstration on the
establishment of subsidiaries and branches, and fulfill necessary internal
decision-making procedures.
Article 30 The shares of subsidiaries of a fund management company shall be
controlled by the fund management company and the subsidiaries shall engage in
related businesses in accordance with the provisions of relevant laws and regulations.
A necessary Chinese wall system shall be established among a fund management
company and its subsidiaries and among all its subsidiaries, so as to avoid possible
risk transfer and interest conflict.
A fund management company shall establish effective supervision and management
rules so as to strengthen the supervision over and daily management of businesses,
personnel and financial affairs of subsidiaries and branches, and branches may not
engage in business operations in such forms as contracting, leasing, custody and
cooperation.
A fund management company may establish offices, but the offices may not undertake
profit-making activities.
Article 31 To establish a subsidiary or branch, a fund management company shall
meet the following conditions:
1. The company has sound corporate governance, complete internal monitoring, stable
business operations, and strong capacity for sustainable business operations;
2. The company has not been given any administrative punishment or criminal
punishment due to any violation of law or regulation in the last one year;
3. The company is not under investigation by the regulatory authority due to any
violation of law or regulation, nor is in the rectification period;
4. The subsidiary or branch to be established has qualified name, offices, business
personnel, security facilities and other facilities relating to the business;
5. The subsidiary or branch to be established has specific functions and sound
management rules; and
6. other conditions as prescribed by the CSRC.
Article 32 To establish a subsidiary or branch, a fund management company shall
submit application materials in accordance with the provisions of the CSRC within 60
days of the date when the board of directors or the shareholders’ meeting (or assembly)
makes a resolution.
Article 33 The CSRC shall, in accordance with the provisions of the
Administrative License Law and the Securities Investment Fund Law, accept the
application of a fund management company for establishing a subsidiary or branch,
conduct examination and make a decision.
The CSRC may conduct on-site inspection of the subsidiary or branch to be
established.
Article 34 Where a fund management company modifies or revokes a branch, it
shall report to the CSRC and the dispatched office of the CSRC at the place where the
fund management company is located within 15 days of the date of modification or
revocation.
Where a fund management company establishes, modifies or revokes an office, it
shall report to the CSRC and the dispatched office of the CSRC at the place where the
fund management company is located within 15 days of the date of establishment,
modification or revocation.
Article 35 To establish a branch, a fund management company shall undergo
registration formalities at the administrative department for industry and commerce
within 30 days of the receipt of approval documents.
To modify or revoke a branch, a fund management company shall undergo relevant
formalities at the administrative department for industry and commerce in accordance
with relevant provisions.
Article 36 A fund management company shall make an announcement on matters
relating to the establishment, modification or revocation of a subsidiary or branch in
accordance with laws, administrative regulations and the provisions of the CSRC.
Chapter V Governance and Business Operations of Fund Management
Companies
Article 37 A fund management company shall, in accordance with the Company
Law and other laws, administrative regulations and the provisions of the CSRC,
establish a governance structure featured by sound organizations, clear division of
functions, effective control and supervision, and reasonable incentives and restriction,
maintain the standard operation of the company, and protect the interests of fund share
holders.
Corporate governance shall follow the basic principle of giving priority to the
interests of fund share holders. Where the interests of the fund management company
and its shareholders and employees run conflict with that of fund share holders,
priority shall be given to guaranteeing the interests of fund share holders.
Article 38 Shareholders of a fund management company shall perform statutory
obligations, and shall not falsely make capital contribution, or withdraw capital
contribution or do so in a disguised form.
The shareholders of a fund management company shall not hold the company’s
equities on behalf of any other institution or individual, and shall not entrust any other
institution or individual to hold the equities. The shareholders of a fund management
company and their actual controllers shall not occupy or transfer the company’s assets
in any form.
Major shareholders of the fund management company shall uphold the concept of
long-term investment, and make written commitments to hold the equities of the fund
management company for not less than three years.
Article 39 A fund management company shall specify the scope of powers and
rules of procedures of the shareholders’ meeting (or assembly).
A fund management company shall establish business and key client information
separation system with shareholders. The shareholders of the fund management
company and their actual controllers shall, in accordance with law, perform rights
through shareholders’ meeting (or assembly), and shall not appoint or remove any
director, supervisor or senior manager of the company by overstepping the
shareholders’ meeting (or assembly) or the board of directors, or directly intervenes in
the business management of the fund management company or the investment and
operation of fund property; and shall not require the fund management company to
render cooperation for them in such business activities as securities underwriting and
securities investment, which impair the lawful rights and interests of fund share
holders and other parties concerned.
Where a single shareholder, alone or in combination with any related shareholders,
holds 50% or more of the shares of a fund management company, the aforesaid
shareholder and the institution controlled thereby shall not engage in the securities
asset management business of public issuance or that similar to public issuance.
Article 40 A fund management company shall, when its major shareholders are
unable to conduct ordinary business operations in the company, convene other
shareholders and relevant parties to appropriately handle relevant matters under the
principle of being conducive to the protection of interests of fund share holders.
Article 41 A fund management company shall specify the scope of powers and
rules of procedures of the board of directors. The board of directors shall formulate
basic rules of the company in accordance with the provisions of laws, administrative
regulations and bylaws of the company, make decisions on relevant major matters,
and supervise and give rewards and punishments to business managers. The meeting
or board of directors shall be convened and presided over by the chairman of board of
directors, and the board of directors and the chairman of board of directors shall not
intervene in the concrete business activities of business managers by exceeding the
authority.
The board of directors shall, when examining business managers, pay attention to
long-term fund investment performance, the company’s regulatory compliance, risk
control and protection of interests of fund share holders, and shall not take short-term
fund management scale and profit increase as major examination standards.
The general manager of the fund management company shall be the member of the
board of directors. Where a single shareholder, alone or in combination with any
related shareholders, holds 50% or more of the shares of a fund management company,
the number of directors related to the aforesaid shareholder shall not exceed one third
of the number of board members.
Article 42 A fund management company shall establish a sound independent
director system, the number of independent directors shall not be less than three, and
shall not be less than one third of the number of board members.
Independent directors shall be independent from the fund management company and
its shareholders, proceed from protecting the maximum interests of fund share holders,
diligently perform duties, make objective and impartial professional judgments on
major matters concerning fund property and the company’s operation in accordance
with law.
Article 43 When the board of directors of a fund management company
deliberates on the following matters, they shall be passed by two thirds or more of
independent directors:
1. major related transactions of the company and in fund investment operation;
2. auditing affairs of the company and the fund, and recruitment or modification of
accountant firms;
3. semi-annual reports and annual reports on the fund managed by the company; and
4. other matters as prescribed by laws, administrative regulations and bylaws of the
company.
Article 44 A fund management company shall establish a sound chief supervisor
system. The chief supervisor shall be hired by the board of directors and be
responsible to the board of directors, and supervise and audit the legality and
regulatory compliance of the company’s business operations.
Where the chief supervisor discovers any major risk or violation of law or regulation
of the company, the chief supervisor shall notify the general manager and other
relevant senior managers, and report to the board of directors, the CSRC and the
dispatched office of the CSRC at the place where the company is located.
Article 45 A fund management company shall strengthen the role of the board of
supervisors or executive supervisors in their supervision over the financial affairs of
the company and the performance of duties by the board of directors, so as to protect
the lawful rights and interests of shareholders.
The board of supervisors shall include shareholders’ representatives and employees’
representatives of the company, and employees’ representatives shall be not less than
one half of the number of board of supervisors. Where the board of supervisors is not
set up, there shall be at least one employees’ representative among executive
supervisors.
The board of supervisors, chairman of board of supervisors, and executive supervisors
shall not intervene in the concrete business activities of business managers by
exceeding the authority.
Article 46 The general manager of a fund management company shall be
responsible for the business management of the company. Senior managers and other
staff members of a fund management company shall perform duties faithfully and
diligently, and shall not seek illegal benefits for any shareholder, themselves or others.
Article 47 The directors, supervisors, senior managers, shareholders and all
relevant parties of a fund management company shall, when major shareholders of the
fund management company cannot normally operate or during the equity transfer of
the fund management company, perform duties in accordance with law and diligently,
make good arrangements on risk prevention, guarantee the normal operation of the
company, and protect the interests of fund share holders.
Article 48 A fund management company shall insist on the concept of sound
business operations, match the scale of management assets with its staff reserves,
investment research and client service ability, tolerance of information technology
systems, risk management and internal control level, and effectively protect the
long-term interests of fund share holders.
Article 49 A fund management company shall, in accordance with the provisions
of the CSRC, establish an internal monitoring system, which is scientific and
reasonable, strictly controlled and operated with high efficiency, maintain business
operations in compliance with laws and regulations, and maintain sound and effective
internal monitoring.
Article 50 A fund management company shall establish a sound investment
management system consisting of such links as authorization, research,
decision-making, implementation and appraisal, and fairly treat different fund
properties and clients’ assets managed by it.
Article 51 A fund management company shall establish sound fund financial
accounting and fund asset evaluation systems, strictly abide by relevant provisions of
the state, and reflect the status of fund property in a timely, accurate and complete
manner.
Article 52 A fund management company shall abide by relevant laws and
regulations, industrial regulatory requirements, and industrial technical standards,
follow the principles of security, practicability and operability, and establish
information technology systems suitable for the company’s development strategies
and business operations.
Article 53 A fund management company shall establish sound human resources
management rules, regulate post functions, strengthen personnel training, establish
incentive and restraint mechanisms appropriate for the company’s development, a
mechanism binding the interests of fund practitioners and fund share holders, and
provide human resources support for the company’s business management and
sustainable development.
Article 54 A fund management company shall establish and improve client service
standards, strengthen sales management, regulate fund publicity and introduction, and
shall not commit illegal sales or have unfair competition.
Article 55 A fund management company shall maintain sound financial status to
satisfy the requirements for the company’s business operations, business development
and risk prevention.
A fund management company shall establish sound financial management rules,
strictly implement financial laws and regulations of the state, and list relevant funds or
assets in its accounting books in compliance with relevant provisions.
Article 56 A fund management company may increase registered capital
accordingly under the principle of prudent management and based on the
requirements for business development.
A fund management company shall draw risk reserves as required.
Article 57 A fund management company shall manage and use its own funds in
accordance with the provisions of the CSRC.
A fund management company shall, when managing or using its own funds, maintain
the company’s normal business operations, and shall not impair the lawful rights and
interests of fund share holders.
Article 58 A fund management company shall establish rules on emergency
response to incidents to appropriately handle emergencies that may seriously affect
the interests of fund share holders, may result in systematic risks, or seriously affect
social stability.
Article 59 A fund management company may, based on the requirements of its
development strategies, authorize a qualified fund service institution to handle such
businesses as fund share registration, accounting, valuation, and the development and
maintenance of information technology systems on its behalf, however, the
responsibility that the fund management company shall assume shall not be exempted
due to authorization.
A fund management company that authorizes a fund service institution to handle some
of its businesses shall conduct sufficient evaluation and demonstration, fulfill
necessary internal decision-making procedures, prudently determine the scope of
authorized businesses, content and the authorized fund service institution, formulate
risk management and emergency response rules on authorized businesses, strengthen
the evaluation and restraint of the authorized fund service institution, guarantee the
confidentiality and security of business information, and protect the lawful rights and
interests of fund share holders and the company’s trade secrets.
Article 60 A fund management company shall, within ten days after signing an
authorization agreement with the fund service institution, report to the CSRC and the
dispatched office of the CSRC at the place where the company is located the
authorized business cope, content, the basic information and business preparations
made by the authorized fund service institution, major risks and corresponding risk
prevention measures. The fund management company shall disclose the relevant
information on authorized businesses in the fund prospectus, fund contact, annual
fund report, semi-annual fund report and the annual report of the fund management
company.
The fund service institution that conducts authorized businesses shall have a sound
corporate structure, standard business operations, sound financial status, have
professional talents, business premises, security facilities and technical facilities
suitable for the authorized businesses, and have sound internal control, risk
management, emergency response rules and business operation procedures. The fund
service institution and its staff members that conduct relevant authorized businesses
shall diligently perform their duties, be honest, faithful, prudent and diligent,
guarantee safe and effective operation of the authorized businesses, keep confidential
business secrets, and shall not disclose or use any private information obtained from
the authorized businesses, or impair the lawful rights and interests of fund share
holders.
Chapter VI Supervision and Administration
Article 61 Where a fund management company or any shareholder of a fund
management company conceals relevant information or provides false materials when
applying for the approval of relevant matters, the CSRC shall not accept the
application. Where the application has been accepted, it shall not be approved.
Article 62 The CSRC shall conduct off-site inspections and on-site inspections on
the corporate governance, internal monitoring, business operations, risk status, and
relevant business activities of fund management companies in accordance with the
provisions of laws, administrative regulations and the provisions of the CSRC and
under the principle of prudent supervision.
Article 63 Off-site inspections shall be mainly conducted by examining the
materials submitted by a fund management company.
A fund management company shall submit the following materials to the CSRC and
the dispatched office of the CSRC at the place where the company is located:
1. annual report of a fund management company audited by the accounting firm
qualified for undertaking relevant securities business;
2. annual appraisal report on the internal monitoring of a fund management company
issued by the accounting firm qualified for undertaking the relevant securities
business;
3. quarterly report and annual report on supervision and audit; and
4. other materials as required to be submitted by the CSRC under the principle of
prudent supervision.
Article 64 A fund management company shall submit its annual report and annual
appraisal report within three months after the end of each year; and submit the
quarterly supervision and audit report within 15 days after the end of each quarter, and
submit the annual supervision and audit report within 30 days after the end of each
year.
Article 65 Where a fund management company falls under any of the following
circumstances, it shall report to the CSRC and the dispatched office of the CSRC at
the place where it is located within five days of the date of occurrence:
1. modifies any shareholder that holds less than 5% of its shares;
2. modifies not more than 5% shareholding proportion of any shareholder;
3. modifies the name or residence;
4. The shareholder increases or decreases the registered capital in proportion to its
shareholding;
5. modifies the general clauses of the company’s bylaws;
6. The company or any of its directors, senior managers and fund managers is given a
criminal or administrative punishment;
7. The company or any of its directors, senior managers and fund managers is under
the investigation of the regulatory authority or judicial organ;
8. There is any material adverse change of the company’s financial status;
9. The company is suffering from a major complaint due to its fault;
10. The company faces a major lawsuit; or
11. any other matter that has a significant impact on the company’s business
operations.
Where any matter prescribed in item 6 to item 11 of the preceding paragraph occurs,
the fund management company shall notify all shareholders in writing.
Where any emergency prescribed in Article 58 of these Measures occurs in a fund
management company, the company shall immediately report to the CSRC and the
dispatched office of the CSRC at the place where the company is located.
Article 66 Where any shareholder of a fund management company falls under any
of the following circumstances, the shareholder shall notify the company in writing,
and report to the CSRC and the dispatched office of the CSRC at the place where the
company is located within five days:
1. The name or residence changes;
2. The controlling shareholder or actual controller changes;
3. Any major shareholder suffers from losses for three consecutive years;
4. The judicial organ takes preservation measures in litigation or any other measure
against the equities held by the shareholder;
5. The shareholder decides to dispose its equities;
6. The shareholder merges or splits or undergoes major asset or debt restructuring;
7. The regulatory authority or the judicial organ files a case for the investigation of the
shareholder;
8. Such regulatory measures as suspension of business operation for rectification,
designated custody, takeover or revocation have been taken against the shareholder or
the shareholder enters the bankruptcy liquidation procedure; or
9. any other matter that has a significant impact on the company’s operation.
Article 67 Where the competent authority at the place where the foreign
shareholder of a Sino-foreign joint venture fund management company is located or
mainly engages in business activities has filing requirements for overseas investment,
the foreign shareholder shall, after having obtained the CSRC’s approval documents
in accordance with law, submit relevant filing materials to the competent authority at
the place where the foreign shareholder is located or mainly engages in business
activities, and shall, at the same time, submit the duplicate to the CSRC.
Article 68 The CSRC may take the following measures to conduct on-site
inspection of a fund management company, and determine the objects, content and
frequency of on-site inspection according to routine supervision:
1. enter the fund management company and its subsidiaries and branches to conduct
inspection;
2. require the fund management company to provide documents, minutes of meeting,
statements, certificates and other materials relating to inspection matters;
3. inquire of staff members of the fund management company and require them to
make statements on relevant inspection matters;
4. consult and reproduce the documents and materials of a fund management
company relating to the inspection matters, and seal up for safekeeping the documents
and materials that are likely to be transferred, concealed or destroyed;
5. inspect the information technology system of the fund management company; and
6. other measures as prescribed by the CSRC.
Article 69 When the CSRC conducts on-site inspection of a fund management
company, the inspectors shall not be less than two, and shall show their legal
certificates. If the inspectors are less than two or fail to show their legal certificates,
the fund management company shall have the right to refuse the inspection.
The CSRC may hire certified accountants, lawyers and other professionals to provide
professional services for inspection.
Article 70 A fund management company and relevant personnel shall cooperate
with the CSRC in inspection, and shall not refuse or delay the provision of relevant
materials with any reason, or provide untruthful, inaccurate or incomplete materials.
Article 71 The CSRC shall issue inspection conclusions to a fund management
company under inspection after conducting on-site inspection of the fund
management company.
Article 72 The CSRC may, as required for supervision, establish the risk control
indicator monitoring system and comprehensive supervision evaluation system for
fund management companies. Where the relevant risk control indicators or
comprehensive supervision evaluation indicators do not comply with relevant
provisions, the CSRC may order the company to make correction within the
prescribed time limit, and take such administrative regulatory measures as increasing
the registered capital, increasing the risk reserve withdrawal proportion or suspending
some or all businesses.
Article 73 Where anyone falls under any of the following circumstances in
violation of these Measures, the CSRC shall order the violator to make correction,
give a warning to and concurrently impose a fine of not more than 30,000 yuan on the
violator, give a warning to the directly responsible person in charge and other directly
liable persons, revoke their qualification for the post or fund practicing qualification,
and concurrently impose a fine of not more than 30,000 yuan on them.
1. holds 5% or more equities of a fund management company without approval, or
becomes a shareholder of a fund management company by providing false application
materials;
2. entrusts any other person or accepts any other person’s authorization to hold
equities of the fund management company;
3. The shareholder of a fund management company and its actual controller occupy or
transfer the assets of the fund management company; or
4. The shareholder of a fund management company and its actual controller order,
instigate or accept the cooperation provided by a fund management company during
such business activities as securities underwriting and securities investment, which
impair the lawful rights and interests of fund share holders and other parties
concerned.
Article 74 Where anyone falls under any of the following circumstances in
violation of these Measures, the CSRC shall order the violator to make correction, and
take such administrative regulatory measures as a regulatory talk, issuance of a
warning letter, and suspension of performance of duties against the liable shareholders,
actual controllers, directors, supervisors, senior managers and directly liable persons.
1. The shareholder of a fund management company or its actual controller appoints or
removes any director, supervisor or senior manager of the company by overstepping
the shareholders’ meeting (or assembly) or the board of directors;
2. The shareholder of a fund management company or its actual controller directly
intervenes in the business management of the fund management company or the
investment and operation of fund property by overstepping the shareholders’ meeting
(or assembly) or the board of directors;
3. The fund management company and its shareholders and actual controllers fail to
fulfill reporting duties in a timely manner; or
4. The board of directors of a fund management company examines business
managers in non-compliance with relevant provisions.
Article 75 Where a fund management company falls under any of the following
circumstances, the CSRC shall order the company to make rectification within a
prescribed time limit, may suspend the acceptance and examination of the company’s
application for collecting a fund product or any other business application during the
rectification period, and may take such administrative regulatory measures as a
regulatory talk, issuance of a warning letter, and suspension of performance of duties
against the liable directors, supervisors, senior managers and directly liable persons.
1. The corporate governance is incomplete, which severely affects the company’s
independence, completeness and integrity;
2. The company’s internal control rules are incomplete, the relevant rules cannot be
effectively implemented, or there is any major hidden risk or serious risk incident;
3. The management of the subsidiaries or branches is slack, the selected fund service
institution does not meet basic qualification conditions, or there is any major hidden
risk or serious risk incident; or
4. any serious violation of law or regulation occurs.
Where the fund management company fails to complete rectification within the
prescribed time limit, the CSRC may cease the approval of new establishment of a
subsidiary or branch; restrict the distribution of bonus, restrict the payment of
remuneration and offering of benefits to the liable directors, supervisors and senior
managers; or order the company to replace the liable directors, supervisors and senior
managers or restrict the rights thereof. Where the circumstances are especially serious,
the CSRC may designate another institution to take such regulatory measures as
custody, takeover or revocation, give a warning to the liable directors, supervisors,
senior managers and directly liable persons, and concurrently impose a fine of not
more than 30,000 yuan on them.
Article 76 Where the net assets of a fund management company is less than 40
million yuan, or its disposable current assets such as cash, bank deposit and national
debt is less than 20 million yuan and less than the company’s business revenue in the
previous accounting year, the CSRC may suspend the acceptance and examination of
the company’s application for collecting a fund product or any other business
application, and require the company to improve financial liquidity within a
prescribed time limit. If the financial status of the company continues to deteriorate,
the CSRC shall order it to cease business operations for rectification.
Where a fund management company is ordered to cease business operations for
rectification, it shall, within a prescribed time limit, authorize a fund management
company recognized by the CSRC to manage the fund assets managed by it. Where it
fails to authorize management as required within the prescribed time limit, the CSRC
may designate another institution to conduct custody of its fund management
business.
Article 77 Where a fund service institution, in violation of these Measures,
discloses or uses any private information obtained from the authorized businesses to
gain benefits, which impairs the lawful rights and interests of fund share holders, it
shall be ordered to make correction, be given a warning, and be concurrently fined not
more than 30,000 yuan. The directly responsible person in charge and other directly
liable persons shall be given a warning, and be concurrently fined not more than
30,000 yuan.
Article 78 Where a fund management company, any shareholder of a fund
management company or its actual controller, a fund service institution or its directly
responsible person in charge or any other directly liable person violates these
Measures or any other relevant provision, which shall be given an administrative
punishment in accordance with law, the violator shall be given an administrative
punishment in accordance with relevant provisions; and if any crime is suspected, it
shall be transferred to the judicial organ in accordance with law, and be subject to
criminal liability.
Chapter VII Supplementary Provisions
Article 79 For purposes of these Measures, “Sino-foreign joint venture fund
management companies” include fund management companies jointly funded and
established by foreign shareholders and domestic shareholders, and fund management
companies altered from assignment or purchase of equities of domestic fund
management companies by foreign shareholders.
Article 80 The specific measures for the administration of establishment of
subsidiaries by fund management companies shall be prescribed by the CSRC
separately.
Article 81 These Measures shall come into force on November 1, 2012. The
Measures for the Administration of Securities Investment Fund Management
Companies (Order No. 22 of the China Security Regulatory Commission) shall be
abolished concurrently.