Eastlaw.net -- Database of Chinese Law

  【发布单位】中国证券监督管理委员会、中国人民银行、国家外汇管理局
  【发布文号】-----------
  【发布日期】2006-08-24
  【生效日期】2006-09-01
  【失效日期】-----------
  【所属类别】国家法律法规
  【文件来源】中国证券监督管理委员会

合格境外机构投资者境内证券投资管理办法

(中国证券监督管理委员会、中国人民银行、国家外汇管理局令第36号)

　　《合格境外机构投资者境内证券投资管理办法》已经中国证券监督管理委员会第170次主席办公会、中国人民银行第4次行长办公会和国家外汇管理局第5次局长办公会审议通过，现予公布，自2006年9月1日起实施。

中国证券监督管理委员会　主席: 尚福林
中国人民银行　行长: 周小川
国家外汇管理局　局长：胡晓炼
二○○六年八月二十四日

合格境外机构投资者境内证券投资管理办法

第一章　总　则

　　第一条　为了规范合格境外机构投资者在中国境内证券市场的投资行为，促进中国证券市场的发展，根据有关法律、行政法规，制定本办法。

　　第二条　本办法所称合格境外机构投资者（以下简称合格投资者），是指符合本办法的规定，经中国证券监督管理委员会（以下简称中国证监会）批准投资于中国证券市场，并取得国家外汇管理局（以下简称国家外汇局）额度批准的中国境外基金管理机构、保险公司、证券公司以及其他资产管理机构。

　　第三条　合格投资者应当委托境内商业银行作为托管人托管资产，委托境内证券公司办理在境内的证券交易活动。

　　第四条　合格投资者必须遵守中国的法律法规和其他有关规定。

　　第五条　中国证监会依法对合格投资者的境内证券投资实施监督管理，国家外汇局依法对合格投资者境内证券投资有关的投资额度、资金汇出入等实施外汇管理。

第二章　资格条件和审批程序

　　第六条　申请合格投资者资格，应当具备下列条件：

　　（一）申请人的财务稳健，资信良好，达到中国证监会规定的资产规模等条件；

　　（二）申请人的从业人员符合所在国家或者地区的有关从业资格的要求；

　　（三）申请人有健全的治理结构和完善的内控制度，经营行为规范，近3年未受到监管机构的重大处罚；

　　（四）申请人所在国家或者地区有完善的法律和监管制度，其证券监管机构已与中国证监会签订监管合作谅解备忘录，并保持着有效的监管合作关系；

　　（五）中国证监会根据审慎监管原则规定的其他条件。

　　第七条　申请合格投资者资格和投资额度，申请人可以通过托管人分别向中国证监会和国家外汇局报送文件。

　　第八条　中国证监会自收到完整的申请文件之日起20个工作日内，对申请材料进行审核，并征求国家外汇局意见，作出批准或者不批准的决定。决定批准的，颁发证券投资业务许可证；决定不批准的，书面通知申请人。

　　第九条　申请人应当在取得证券投资业务许可证之日起1年内，通过托管人向国家外汇局提出投资额度申请。

　　国家外汇局自收到完整的申请文件之日起20个工作日内，对申请材料进行审核，并征求中国证监会意见，作出批准或者不批准的决定。决定批准的，作出书面批复并颁发外汇登记证；决定不批准的，书面通知申请人。

　第十条　为鼓励中长期投资，对于符合本办法规定的养老基金、保险基金、共同基金、慈善基金等长期资金管理机构，予以优先考虑。

第三章　托管、登记和结算

　　第十一条　托管人应当具备下列条件：

　　（一）设有专门的资产托管部；

　　（二）实收资本不少于80亿元人民币；

　　（三）有足够的熟悉托管业务的专职人员；

　　（四）具备安全保管合格投资者资产的条件；

　　（五）具备安全、高效的清算、交割能力；

　　（六）具备外汇指定银行资格和经营人民币业务资格；

　　（七）最近3年没有重大违反外汇管理规定的纪录。

　　外资商业银行境内分行在境内持续经营3年以上的，可申请成为托管人，其实收资本数额条件按其境外总行的计算。

　　第十二条　取得托管人资格，必须经中国证监会和国家外汇局审批。中国证监会收到完整的申请文件后，于30个工作日内会签国家外汇局作出托管资格许可。

　　第十三条　托管人应当履行下列职责：

　　（一）保管合格投资者托管的全部资产；

　　（二）办理合格投资者的有关结汇、售汇、收汇、付汇和人民币资金结算业务；

　　（三）监督合格投资者的投资运作，发现其投资指令违法、违规的，及时向中国证监会和国家外汇局报告；

　　（四）在合格投资者汇入本金、汇出本金或者收益2个工作日内，向国家外汇局报告合格投资者的资金汇入、汇出及结售汇情况；

　　（五）每月结束后8个工作日内，向国家外汇局报告合格投资者的外汇账户和人民币特殊账户的收支和资产配置情况，向中国证监会报告证券账户的投资和交易情况；

　　（六）每个会计年度结束后3个月内，编制关于合格投资者上一年度境内证券投资情况的年度财务报告，并报送中国证监会和国家外汇局；

　　（七）保存合格投资者的资金汇入、汇出、兑换、收汇、付汇和资金往来记录等相关资料，其保存的时间应当不少于20年；

　　（八）根据国家外汇管理规定进行国际收支统计申报；

　　（九）中国证监会、国家外汇局根据审慎监管原则规定的其他职责。

　　第十四条　托管人必须将其自有资产和受托管理的资产严格分开，对受托管理的资产实行分账托管。

　　第十五条　每个合格投资者只能委托1个托管人，并可以更换托管人。

　　第十六条　合格投资者可以在证券登记结算机构申请开立证券账户。该证券账户可以是实名账户，也可以是名义持有人账户。

　　名义持有人应当将其代理的实际投资者或基金的名称、注册地、资产配置、证券投资情况于每个季度结束后的8个工作日内，报告中国证监会和证券交易所。

　　第十七条　合格投资者应当委托获得证券登记结算机构结算参与人资格的机构进行资金结算。该机构应在开立人民币结算资金账户5个工作日内将开户情况向国家外汇局备案。

第四章　投资运作

　　第十八条　合格投资者在经批准的投资额度内，可以投资于中国证监会批准的人民币金融工具。

　　第十九条　合格投资者可以委托在境内设立的证券公司等投资管理机构，进行境内证券投资管理。

　　第二十条　合格投资者的境内股票投资，应当遵守中国证监会规定的持股比例限制和国家其他有关规定。

　　第二十一条　境外投资者履行信息披露义务时，应当合并计算其持有的同一上市公司的境内上市股和境外上市股，并遵守信息披露的有关的法律法规。

　　第二十二条　证券公司等机构保存合格投资者的委托记录、交易记录等资料的时间应当不少于20年。

　　第二十三条　合格投资者的境内证券投资活动，应当遵守证券交易所、证券登记结算机构的有关规定。

第五章　资金管理

　　第二十四条　合格投资者经国家外汇局批准，应当在托管人处开立外汇账户和人民币特殊账户。　　

　　第二十五条　合格投资者外汇账户和人民币特殊账户的收支范围应当符合国家外汇局的有关规定。

　　第二十六条　合格投资者应当在国家外汇局规定的时间内汇入本金，汇入的本金应当是国家外汇局批准的可兑换货币，金额以批准额度为限。

　　合格投资者未在国家外汇局规定的时间内汇满本金的，应当向中国证监会和国家外汇局作出书面解释，并以实际汇入金额为批准额度；已批准额度和已实际汇入金额的差额，在未经国家外汇局批准之前不得汇入。

　　第二十七条　合格投资者可以在国家外汇局规定的期限届满之日起向国家外汇局申请汇出资金，国家外汇局另有规定的除外。

　第二十八条　国家外汇局可以根据我国经济金融形势、外汇市场供求关系和国际收支状况，按照中国人民银行的安排，对合格投资者本金的汇入汇出时间、金额以及汇出资金的期限予以调整。

第六章　监督管理

　　第二十九条　中国证监会、国家外汇局依法可以要求合格投资者、托管人、证券公司等机构提供合格投资者的有关资料，并进行必要的询问、检查。

　　第三十条　合格投资者有下列情形之一的，应当在其发生后5个工作日内报中国证监会、国家外汇局备案：

　　（一）变更托管人；

　　（二）变更法定代表人；

　　（三）其控股股东变更；

　　（四）调整注册资本；

　　（五）涉及重大诉讼及其他重大事件；

　　（六）在境外受到重大处罚；

　　（七）中国证监会和国家外汇局规定的其他情形。

　　第三十一条　合格投资者有下列情形之一的，应当重新申领证券投资业务许可证：

　　（一）变更机构名称；

　　（二）被其他机构吸收合并；

　　（三）中国证监会和国家外汇局规定的其他情形。

　　重新申领证券投资业务许可证期间，合格投资者可以继续进行证券交易。但中国证监会根据审慎监管原则认为需要暂停的除外。

　　第三十二条　合格投资者有下列情形之一的，应当将证券投资业务许可证和外汇登记证分别交还中国证监会和国家外汇局：

　　（一）申请人取得证券投资业务许可证后1年内未向国家外汇局提出投资额度申请的；

　　（二）机构解散、进入破产程序或者由接管人接管的；

　　（三）合格投资者重新申领许可证的；

　　（四）合格投资者有重大违法行为及中国证监会和国家外汇局认定的其他情形。

　　第三十三条　合格投资者所管理的证券账户发生重大违法、违规行为的，中国证监会可以依法采取限制相关证券账户的交易行为等措施，国家外汇局可以依法采取限制其资金汇出入等措施。

　　第三十四条　托管人违法、违规行为严重的，中国证监会、国家外汇局将依法联合做出取消其托管人资格的决定。

　　第三十五条　合格投资者、托管人、证券公司等违反本办法的，由中国证监会、国家外汇局依法进行相应的行政处罚。

第七章　附　　则

　　第三十六条　香港特别行政区、澳门特别行政区、台湾地区设立的机构投资者到内地从事证券投资的，适用本办法的规定。

　　第三十七条　本办法自2006年9月1日起施行，2002年11月5日中国证监会、中国人民银行联合发布的《合格境外机构投资者境内证券投资管理暂行办法》同时废止。

Administrative Measures for Securities Investment in the Territory of Qualified Foreign Institutional Investors

Administrative Measures for Securities Investment in the Territory of Qualified Foreign Institutional Investors reviewed and adopted at the 170th Chairman's Meeting of China Securities Regulatory Commission, 4th Governor's Meeting of the People's Bank of China, and the 5th Commissioner's Meeting of the State Administration of Foreign Exchange, is now promulgated and shall enter into force as of 1 September 2006.

Chairman of China Securities Regulatory Commission, Shang Fulin
Governor of People's Bank of China, Zhou Xiaochuan
Commissioner of China Administration of Foreign Exchange, Hu Xiaolian
24 August 2006

Chapter I : General Principles

Article 1. This set of measures is formulated in line with related laws and regulations to govern the investment behaviour of qualified foreign institutional investors in the domestic securities markets of China and promote the development of the securities market in China.

Article 2. Qualified foreign institutional investors (hereinafter referred to as "QFII") mentioned in this set of measures refer to overseas fund management institutions, insurance companies, securities companies, and other asset management institutions, which are in compliance with the conditions of this set of measures, have been approved by China Securities Regulatory Commission (hereinafter referred to as "CSRC") for investing in the securities markets in China, and been granted the quota limit from the State Administration of Foreign Exchange (hereinafter referred to as "SAFE").

Article 3. QFII shall appoint domestic commercial banks as custodian to hold in custody the assets and appoint domestic securities firms to manage the domestic securities trading activities.

Article 4. QFII shall abide by the laws, regulations, and other relevant rules of the People's Republic of China.

Article 5. The CSRC shall exercise according to laws supervision and administration over the securities investment made by QFII and the SAFE shall exercise according to laws foreign exchange administration over the investment quota and incoming and outgoing capital of QFII related to investment in domestic securities.

Chapter II : Qualifications, Criteria and Approval Procedures

Article 6. When applying for QFII qualifications, the following terms and conditions shall be met:

1. applicants shall be financially sound, have good credit reputation, and meet the requirements of the CSRC regarding the scale of assets, and others;

2. practitioners of applicants shall meet the requirements for practitioners of the host country or region;

3. applicants shall have sound governance structure and proper internal control system, good operational records, and have not been subject to major punishments by the regulatory bodies in the last three years;

4. the home country or region of the applicants shall have sound legal and regulatory framework, and their securities regulatory bodies have signed a memorandum of understanding regarding cooperation in monitoring and supervision with CSRC, and have maintained effective collaborative relations in terms of monitoring;

5. other requirements specified by the CSRC according to the principles of prudent regulation.

Article 7. When applying for QFII qualifications and investment quota limit, the applicants may submit application documents to the CSRC and SAFE respectively through their custodians.

Article 8. The CSRC shall, within 20 working days from the date the full set of application documents are received, conduct examination and verification over the application materials, seek comments and views from the SAFE, and make a decision on whether or not to approve. A securities investment business license will be issued to those applicants whose applications have been approved whereas a written notice will be given to those applicants that are rejected.

Article 9. Applicants shall apply to the SAFE through their custodians for investment limit within a year from the day of obtaining the securities investment business license.

SAFE shall, within 20 working days from the date the full set of application documents are received, conduct examination and verification of application materials, seek comments from the CSRC, and make a decision of whether or not to approve. Those approved ones will be granted written reply and foreign exchange registration certificate. Those that are rejected will be notified in writing.

Article 10. To encourage medium and long term investment, preference shall be given to pension fund, insurance fund, mutual fund, charity fund and other long term fund management institutions that conform to the provisions of this set of measures.

Chapter III : Custody, Registration and Settlement

Article 11. A custodian shall meet the following requirements:

1. have a specific fund custody department ;

2. with paid in capital of not less than RMB8 billion;

3. have a sufficient number of professionals familiar with custody business;

4. can manage the entire assets of the fund safely,

5. have capacity to clear and settle safely and efficiently,

6. qualified as a designated bank for foreign exchange and RMB business,

7. have no record of major violation of foreign exchange regulations within the last three years.

Domestic branches of foreign commercial banks with more than 3 years of continued operations are eligible to apply for the custodian qualifications. The paid in capital eligibility shall be based on its foreign headquarters' capital.

Article 12. Applications for custodian qualifications shall be reviewed and approved by the CSRC and SAFE. The CSRC shall issue the license of custodian qualifications together with SAFE within 30 working days upon receiving the complete set of application documents.

Article 13. Custodians shall perform the following duties:

1. keep the entire assets which are under the custody of the QFII,

2 .on behalf of the QFII operate settlement, sales, receipt, and payment of foreign exchange and business settlement in RMB,

3. supervise investment operations of QFII and report without delay to the CSRC and SAFE in cases where their investment orders are found to have violated laws and regulations,

4. report to the SAFE the remittance (in or out), settlement and sales of foreign exchange of QFII within 2 working days, upon QFII remitting principal or revenues (either in or out),

5. report to the SAFE within 8 working days after the end of each month information regarding the income and expenditure and assets allocation of the foreign exchange account and specific RMB account of the QFII, and report to the CSRC the investment and trading of securities account,

6. prepare annual financial reports with regard to the domestic securities investment of the QFII in the previous year within three months after the end of each fiscal year and submit the reports to the CSRC and SAFE,

7. maintain information in relation to remittance (in and out), conversion, receipt, payment of capital and record on capital transaction of QFII for at least 20 years,

8. declare statistics with regard to international balance of payment according to the regulations of the state foreign exchange,

9. other duties specified by the CSRC and SAFE according to the principles of prudent regulation.

Article 14. A custodian must strictly separate its own assets from the assets under its custody. A custodian shall open accounts for various QFII and the accounts of assets under its custody shall be separately managed.

Article 15. Each QFII can only entrust one custodian, and may change its custodian.

Article 16. QFII may apply to open securities accounts with securities registration and settlement institutions. The securities account shall be opened with real names or with the name of the nominal holder of the account.

The nominal holder of the account shall communicate with the CSRC and securities exchange within 8 working days after the end of each quarter with regard to the name, place of registration, assets allocation, securities investment of the fund or actual investment for whom he acts as an agent.

Article 17. QFII shall entrust institutions that have obtained qualifications of participating in settlement as securities registration and settlement institutions to conduct capital settlement. The institution shall file a record with the SAFE within 5 working days from the day of opening the RMB settlement account with regard to the account opening.

Chapter IV : Investment

Article 18. QFII may invest in RMB financial instruments as approved by CSRC within the investment quota approved.

Article 19. QFII may entrust securities firms and other investment management institutions legally set up in China to conduct investment in domestic securities.

Article 20. Investment made by QFII in domestic stocks shall abide by restrictions imposed by the CSRC in terms of percentage of shares held and other related regulations of the State.

Article 21. When performing its duties of information disclosure, QFIIs shall consolidate shares listed at home and abroad of the same publicly listed companies, and abide by the related laws and regulations on information disclosure.

Article 22. Securities companies and other institutions shall keep the record of custodianship, trading, etc of QFIIs for at least 20 years.

Article 23. Domestic securities investment made by QFIIs shall follow the related regulations of securities exchanges and securities registration and settlement institutions.

Chapter V : Fund Management

Article 24. Upon approval by the SAFE, QFIIs shall open foreign exchange accounts and a specific RMB account through the custodian.

Article 25. Scope of income and expenditure of foreign exchange accounts and specific RMB accounts of QFII shall conform to the related regulations of the SAFE.

Article 26. QFIIs shall remit in principal capital within the timeframe specified by the SAFE and the capital remitted in shall be in convertible currencies approved by the SAFE and the investment quota approved shall be the benchmark to follow.

In cases where QFIIs fail to pay in the principal capital within the timeframe specified by the SAFE, they shall provide written explanations to the CSRC and SAFE, and the actual amount of paid in capital will be the quota of investment. The balance between the approval quota and the actual paid in capital shall not be remitted in before being approved by the SAFE.

Article 27. QFII may apply to the SAFE for remitting out capital before the expiration of the framework stipulated by the SAFE, unless otherwise specified.

Article 28. SAFE may, in view of the economic and financial conditions of the country, demand and supply in the foreign exchange market, and conditions of international balance of payment, make adjustments to the time of remitting in or out of principal capital, amount of money remitted in or out and duration of capital remittance according to the arrangement of the People's Bank of China.

Chapter VI : Supervision and Administration

Article 29. CSRC and SAFE may, according to laws, request QFIIs, custodians, securities companies and other institutions to provide related information of the QFII and conduct necessary inquiries or inspection.

Article 30. QFIIs under any of the following circumstances shall file a record with the CSRC and SAFE within 5 working days upon the occurrence:

1. change of custodians,

2. change of legal representative,

3. change of controlling shareholders,

4. adjustment of registered capital,

5. litigation and other significant events,

6. under injunction outside China,

7. other circumstances as stipulated by the CSRC and SAFE.

Article 31. QFIIs under any of the following circumstances shall apply to renew their securities investment license:

1. change of business name,

2. acquisition by other companies,

3. other circumstances as stipulated by the CSRC and SAFE.

During the period when applications for renewing securities investment license have been filed, QFIIs may continue to engage in securities trading, unless suspended by the CSRC according to the principles of prudent regulation.

Article 32. QFIIs under any of the following conditions shall surrender the securities investment license and foreign exchange registration certificate to the CSRC and SAFE respectively :

1.failure to submit applications to the SAFE for investment quota within a year starting from the day of receipt of the securities investment license,

2. institutions being dissolved, entering into bankruptcy procedure, or taken over,

3. QFII applying for licenses anew,

4. QFIIs found to have committed major law breaking acts or other circumstances identified by the CSRC and SAFE of China.

Article 33. In cases where securities accounts managed by QFIIs are found to be involved in major law breaking or rule breaking acts, the CSRC may, according to law, adopt measures aimed to restrict the trading of related securities accounts, and the SAFE may take measures to restrict the remitting in or out of the capital.

Article 34. Custodians found to have been involved in serious illegal or rule breaking activities will have their custodian qualifications cancelled by the CSRC and SAFE jointly according to law.

Article 35. In cases where QFII, custodians, securities firms violate the provisions of this set of measures, the CSRC and SAFE shall impose on them administrative sanctions accordingly in line with related laws and regulations.

Chapter VII : Supplementary Articles

Article 36. This set of measures shall be applicable to the securities investment made by institutional investors from Hong Kong SAR, Macao SAR, and Taiwan region in Mainland China.

Article 37. This set of measures shall take effect on 1 September 2006 and the Provisional Measures on the Administration of the Domestic Securities Investment of Qualified Foreign Institutional Investors jointly released by CSRC and People's Bank of China on 5 November 2002 will be abolished at the same time.

Order of China Securities Regulatory Commission, People’s Bank of China and State Administration of Foreign Exchange
(No. 36)

The Measures for the Administration of Securities Investment within the Territory of China by Qualified Foreign Institutional Investors, which were deliberated and adopted at the 170th chairman’s executive meeting of China Securities Regulatory Commission, the 4th governor’s meeting of People’s Bank of China and the 5th director general’s executive meeting of State Administration of Foreign Exchange, are hereby promulgated, and shall come into force as of September 1st, 2006.

China Securities Regulatory Commission President: Shang Fulin
People’s Bank of China Governor: Zhou Xiaochuan
State Administration of Foreign Exchange Director General: Hu Xiaolian
August 24th, 2006

Measures for the Administration of Securities Investment within the Borders of China by Qualified Foreign Institutional Investors

Chapter I General Rules

Article 1 For the purpose of regulating the investment behaviors of qualified foreign institutional investors in China’s securities market and promoting the development of China’s securities market, these Measures are formulated in accordance with relevant laws and administrative regulations.

Article 2 The term of qualified foreign institutional investors (hereinafter referred to as QFII) as mentioned in these Measures refers to the foreign fund management institutions, insurance companies, securities companies and other assets management institutions that invest in China’s securities market in accordance with the provisions of these Measures after being approved by China Securities Regulatory Commission (hereinafter referred to as CSRC) and granted an investment quota by State Administration of Foreign Exchange (hereinafter referred to as SAFE).

Article 3 A QFII shall entrust an domestic commercial bank as its trustee to manage its assets, and entrust a domestic securities company to handle its domestic securities transaction activities.

Article 4 A QFII shall comply with the laws, regulations and other relevant provisions of China.

Article 5 The CSRC shall, according to law, regulate the domestic securities investment activities conducted by a QFII; and the SAFE shall, according to law, exercise foreign exchange administration over such issues as the investment quota and capital remitted inward and outward as involved in the domestic securities investment activities conducted by a QFII.

Chapter II Qualification Conditions and Procedure of Examination and Approval

Article 6 A QFII applicant shall satisfy the following conditions:
(1) The applicant shall be in a sound financial and credit status, and shall meet the conditions set by the CSRC on assets scale and other factors;
(2) The employees of the applicant shall satisfy relevant professional requirements of the country or region where the applicant is located;
(3) The applicant shall be equipped with sound governance structure and perfect inner control system, conduct business in accordance with the relevant regulations, and have not been subject to any substantial penalties by the supervisory organ of the country or region where it is located;
(4) The country or region where the applicant is located should have a sound legal and regulatory system, and its securities supervisory organ has signed a memorandum of cooperation an understanding with the CSRC and has maintained an efficient regulatory and co-operative relationship;
(5) Other conditions set by the CSRC in accordance with the principle of prudent supervision.

Article 7 To apply for the QFII qualification and an investment quota, an applicant may file the required documents with the CSRC and the SAFE respectively through its trustee.

Article 8 The CSRC shall, within 20 workdays since the receipt of full set of application documents, examine and verify the application documents and decide whether to grant approval or not on the basis of the opinion of the SAFE. Where it is decided to approve the application, the CSRC shall issue a securities investment license; where it is decided to disapprove, the CSRC shall send a written notice to the applicant.

Article 9 An applicant shall, within 1 year since the obtain of a Securities Investment License, apply to the SAFE through the trustee for investment quota.

The SAFE shall, within 20 workdays since the receipt of a full set of application documents, examine and verify the application documents and decide whether to grant approval or not on the basis of the opinion of the CSRC. Where it is decided to approve the application, the SAFE shall give a written reply and issue a foreign exchange certificate; where it is decided to disapprove, the SAFE shall send a written notice to the applicant.

Article 10 In order to encourage middle and long-term investments, preference shall be given to the pension funds, insurance funds, common funds, charity funds and other long-term capital management institutions.

Chapter III Custody, Registration and Settlement

Article 11 A trustee shall satisfy the following conditions:
(1) It shall establish a special assets custody department;
(2) The paid-in capital shall not be less than RMB 8 billion;
(3) There shall be adequate full-time staff that are familiar with the custody business;
(4) It shall be able to manage the assets of the QFIIs in a safe way;
(5) It shall be able to make settlement and delivery in a safe and highly efficient way;
(6) It shall have obtained the qualification of a designated foreign exchange bank and the qualification of engaging in the RMB business;
(7) There shall be no record of serious violation of regulations on foreign exchange management in the recent three years.

Domestic branches of the foreign-funded commercial banks that have conducted business for three consecutive years within China are eligible to apply for the trustee qualification, and the amount of their paid-in capital shall be calculated on the basis of that of the overseas headquarters.

Article 12 The qualification of trustee may be obtained upon the examination and approval of the CSRC and the SAFE. The CSRC shall, within 30 workdays since the receipt of a full set of application documents, deliberate with the SAFE and decide whether to grant permit or not.

Article 13 A trustee shall perform the following duties:
(1) Safekeeping all the assets entrusted by the QFIIs;
(2) Handling such businesses as the settlement, sales, receipt and payment of foreign exchange, and the settlement of RMB capital for the QFIIs;
(3) Supervising the investment activities conducted by the QFIIs, and reporting to the CSRC and the SAFE immediately after finding any investment instruction that violates any of the laws or regulations;
(4) Reporting to SAFE about the inward and outward remittance of capital and the settlement and sales of foreign exchange of QFII within two workdays after QFII remits inward/outward its principal or proceeds;
(5) Within 8 workdays after the end of each month, reporting the revenues and expenditures of both the foreign exchange account and special RMB account, together with the assets arrangement of the QFIIs to the SAFE; reporting the investments and trades conducted under securities account to the CSRC;
(6) Within 3 months upon the end of each accounting year, compiling an annual financial report on the domestic securities investment activities by the QFIIs in the previous year, and submit it to the CSRC and the SAFE;
(7) Keeping the records and other related materials on the QFIIs’ inward and outward remittances, conversion, receipt, payment and capital flow for at least 20 years;
(8) Making international balance of payments statistics reports pursuant to the relevant provisions of the state on foreign exchange administration;
(9) Other duties prescribed by the CSRC and the SAFE in accordance with the principle of prudent supervision.

Article 14 A trustee shall strictly separate its own assets from those under its custody, and set up different accounts for the assets under its custody for separate management.

Article 15 Each QFII may only entrust one trustee and may change the trustee.

Article 16 A QFII may apply to a securities registration and settlement institution for opening a securities account, which may be a real name account or a nominal holder account.

The nominal holder shall, within 8 workdays upon the end of each season, report the name, registration place, assets arrangement and securities investment status of the actual investor or funds it represents to the CSRC and stock exchanges.

Article 17 A QFII shall entrust the securities depository and clearing institution that has obtained the qualification of a clearing participant to conduct capital settlement. This institution shall, within five workdays after opening a RMB settlement account, report the opening to the SAFE for record.

Chapter IV Investment Operations

Article 18 A QFII may, within the approved investment quota, invest in the financial instruments of RMB approved by the CSRC.

Article 19 A QFII may entrust securities companies and other investment management institutions established within China to manage its domestic securities investments.

Article 20 A QFII shall, in making any domestic stock investment, comply with the limits on proportion of shares stipulated by the CSRC and other relevant provisions of the state.

Article 21 A QFII shall, in performing its obligation of information disclosure, make the domestic and overseas listed stocks of the same listed company pooled together for calculation, and shall abide by the relevant laws and regulations on information disclosure.

Article 22 Securities companies and other relevant institutions shall keep the entrustment record, transaction record and other materials of QFII for at least 20 years.

Article 23 A QFII shall, in conducting domestic securities investment activities, abide by relevant provisions stipulated by the stock exchanges or securities depository and clearing institutions.

Chapter V Funds Management

Article 24 A QFII shall, upon the approval of the SAFE, open a foreign exchange account and a special RMB account at the place of the trustee.

Article 25 The division of the revenue and expenditure boundaries of the foreign exchange account and the special RMB account of a QFII shall be in line with the relevant provisions as stipulated by the SAFE.

Article 26 A QFII shall remit the principal into China within the time limit set by the SAFE, the currency of the principal from the QFII shall be an exchangeable currency as approved by the SAFE and the amount of the principal shall not exceed the approved quota.

A QFII that fails to remit principal into China within the time limit set by the SAFE shall make a written explanation to the CSRC and the SAFE, and the actual amount remitted shall be deemed as the approved quota; and the difference between the approved quota and the actual amount shall not be remitted inward before being approved by the SAFE.

Article 27 A QFII may apply to the SAFE for remitting capital outward since the date of expiration of the time limit set by the SAFE, unless the SAFE has stipulated otherwise.

Article 28 The SAFE may, by considering the economic and financial situation of China, the supply demand situation of foreign exchange market and the international balance of payments, make adjustments on the time, amount and time limit of the remittance of principal by a QFII.

Chapter VI Supervision and Administration

Article 29 The CSRC and the SAFE may, according to law, require the QFIIs, trustees, securities companies and other institutions to provide relevant information about the QFIIs, and may make necessary inquiries and examinations.

Article 30 Where, under any of the following circumstances, a QFII shall, within 5 workdays after the occurrence, report to the CSRC and the SAFE for record:
(1) Change of trustees;
(2) Change of legal representatives;
(3) Change of the controlling shareholders;
(4) Adjustment of the registered capital;
(5) Being involved in any important litigations and other material events;
(6) Being imposed a substantial penalty overseas;
(7) Other circumstances specified by the CSRC and the SAFE.

Article 31 Where, under any of the following circumstances, a QFII shall re-apply for a Securities Investment License:
(1) Change of business name;
(2) Acquired by or merged with other institution(s);
(3) Other circumstances specified by the CSRC and the SAFE.

During the period of re-applying for a Securities Investment License, a QFII may continue its securities transactions, with the exemption of those that shall be suspended by the CSRC in accordance with the principle of prudent supervision.

Article 32 Where, under any of the following circumstances, a QFII shall surrender its securities investment license and foreign exchange certificate to the CSRC and the SAFE respectively.
(1) The applicant did not apply to the SAFE for an investment quota within 1 year after obtaining a securities investment license;
(2) The institution is dismissed, has entered the bankruptcy procedure or has been taken over by the administrator;
(3) QFII intends to re-apply for a license;
(4) QFII has committed any serious illegal act, and other circumstances determined by the CSRC and the SAFE.

Article 33 Where there exists any serious violation of any law or regulation with respect to the securities accounts managed by a QFII, the CSRC shall restrict its transactions under relevant securities accounts or adopt other measures according to law; the SAFE may restrict its remittance of capital or adopt other measures according to law.

Article 34 Where a trustee has seriously violated any law or regulation, the CSRC and the SAFE shall make a joint decision to cancel its qualification of trustee.

Article 35 Where a QFII, trustee, or securities company violates the present Measures, the CSRC and the SAFE shall impose corresponding administrative penalties according to law.

Chapter VII Supplementary Rules

Article 36 The present Measures are also applicable to the institutional investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Region, which conduct securities investment businesses in China’s Mainland.

Article 37 The present Measures shall come into force as of September 1st, 2006, the Interim Measures for the Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors as jointly issued by the CSRC and People’s Bank of China on November 5th, 2002, shall be simultaneously abolished.


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