Article 1 To meet the demand of opening the securities market, to strengthen and improve the supervision and administration of foreign-shared fund management companies and to clarify the preconditions and procedures for the establishment of foreign-shared fund management companies, the Rules is therefore formulated in accordance with relevant provisions of the Company Law and the Interim Measures for the Administration of Securities Investment Fund (hereinafter referred to as the Interim Measures).

Article 2 The foreign-shared fund management companies as referred to in the Rules shall include domestic fund management companies whose shares are transferred to or purchased by foreign shareholders or those that are co-funded by foreign and domestic shareholders.

Article 3 The China Securities Regulatory Commission (hereinafter referred to as the CSRC) shall be responsible for the examination, approval, supervision and administration of foreign-shared fund management companies.

Article 4 The organizational structure of a foreign-shared fund management company shall be that of limited liability. The name, registered capital, founding and functions of the departments of a foreign-shared fund management company shall be compliant with relevant provisions of the Company Law, the Interim Measures and the CSRC.

Article 5 Foreign-shared fund management companies shall meet the requirements as provided for in the Interim Measures and those of the CSRC.

Article 6 The foreign shareholders of a foreign-shared fund management company shall possess the following qualifications:

1) Financial institutions established in accordance with the laws of their home countries and continuing to exist legitimately without severe punishment by securities regulatory bodies or judicial organs within the past 3 years;

2) Their home countries shall have a sound legal and regulatory system on securities, and the securities regulatory bodies shall have signed the memorandum of understanding on securities regulation with CSRC and have maintained effective cooperation with the latter;

3) The actual realized capital shall be free convertible currency equivalent of no less than RMB 300,000,000 yuan;

4) Other prudential conditions as provided for by the CSRC.

Article 7 The domestic shareholders of a foreign-shared fund management company shall have the qualifications as shareholders of fund management companies as provided for by the CSRC.

Article 8 The shares held by foreign shareholders or the equity possessed by them (both directly and indirectly) in a foreign-shared fund management company may not exceed one third of the total in the aggregate, and the percentage may not exceed 49% within 3 years after China’s accession to the WTO. Foreign shareholders shall invest with free convertible currencies.

Article 9 The board chairman, general manager, and deputy general manager of a foreign-shared fund management company shall possess the qualifications as senior management of securities companies as provided for by the CSRC.

Article 10 The domestic and foreign applicants of a foreign-shared fund management company shall submit the application materials to the CSRC in compliance with the contents and format prescribed by the CSRC. The application materials submitted by the domestic and foreign applicants to the CSRC must be in Chinese. Documents and materials in foreign languages provided by the foreign shareholders and the securities bodies of their home countries shall be accompanied by their Chinese versions consistent with the original contents.

Article 11 The establishment of a foreign-shared fund management company by foreign shareholders and domestic shareholders shall follow two phases, namely the preparation and the commencement of business.

Article 12 The CSRC shall decide on whether to approve the application for establishment preparation or otherwise within 60 working days upon formal acceptance of the application. If the approval is granted, the reply document should be issued. If the approval is not granted, the applicant should be notified in writing of the reasons.

Article 13 As for foreign-shared fund management companies that have already obtained the approval documents for preparation from the CSRC but are yet to open to business, if there are substantial changes in the basic conditions of their foreign shareholders, or their foreign shareholders have been punished or tightly controlled and supervised by the regulatory bodies of relevant countries and regions for violation of related rules and regulations, then these foreign shareholders shall motion for a founders’ meeting within the company without delay and shall clarify the situation. If the foreign shareholders no longer meet the requirements of the Rules, the founders’ meeting shall reach a treatment decision and the preparatory group of the company shall report to the CSRC and complete relevant formalities as required.

Article 14 The domestic and foreign applicants shall, after the preparation for establishment of the fund management company has been accomplished, submit the application materials for business operation to the CSRC. The CSRC shall decide on whether to approve, postpone the approval or disapprove the business operation within 30 working days upon formal acceptance of the application. If the approval is granted, the approval documents shall be issued; if the approval is a deferred one or not granted, the applicant shall be notified in writing of the reasons.

Article 15 When the shares of a foreign-shared fund management company are transferred to or purchased by foreign shareholders, the fund management company shall submit the application materials to the CSRC. The CSRC shall decide on whether to grant the approval within 60 working days upon formal acceptance of the application. If the approval is granted, the reply documents shall be issued; if the approval is not granted, the applicant shall be notified in writing of the reasons. With regard to the review of applications involving new shareholders and the change of the largest shareholders who have the highest proportion of capital contribution and nominate the most directors, the CSRC shall follow the procedures for reviewing preparation applications of fund management companies.

Article 16 As for some foreign shareholders of a foreign-shared fund management company, the authorities in where the company is registered or its main business activities take place may require for records of overseas foreign investment. If these foreign shareholders, after legitimately obtaining the approval documents from the CSRC, should need to submit the relevant materials to the above-mentioned authorities for record-keeping purpose, they shall also submit copies of those materials to the CSRC.

Article 17 The shareholders of a foreign-shared fund management company shall, within 30 working days after obtaining the approval documents from the CSRC, apply to competent administrations for industry and commerce for alteration or establishment.

Article 18 The Rules is applicable to investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Area holding shares of domestically-funded fund management companies.

Article 19 As for the establishment, alteration, termination, business activities, supervision and administration of foreign-shared fund management companies, other relevant provisions of the CSRC shall be applicable if there are no corresponding provisions in the Rules.

Article 20 The Rules shall enter into force as of July 1, 2002.

Promulgated by The China Securities Regulatory Commission on 2002-6-1