Administrative Measures for Securities Investment Fund Management Companies

Order of the China Securities Regulatory Commission No. 84

September 20, 2012

The Administrative Measures for Securities Investment Fund Management Companies, which have been revised and adopted at the 19th office meeting of the chairman of the China Securities Regulatory Commission on June 19, 2012, are hereby promulgated, and shall come into effect as of November 1, 2012.

Chairman of the China Securities Regulatory Commission: Guo Shuqing

Administrative Measures for Securities Investment Fund Management Companies

Chapter I General Provisions

Article 1 The present Measures are formulated in accordance with the Law of the People's Republic of China on Securities Investment Funds, the Company Law of the People's Republic of China and other relevant laws and administrative regulations for the purposes of strengthening supervision over and administration of securities investment fund management companies, regulating the activities of securities investment fund management companies, and protecting the lawful rights and interests of fund share holders and relevant parties concerned.

Article 2 The "securities investment fund management company" (hereinafter referred to as the fund management company) as mentioned in the present Measures shall refer to the enterprise legal person, which is established within the territory of the People's Republic of China upon the approval of China Securities Regulatory Commission (hereinafter referred to as the CSRC) and undertakes securities investment fund management business and other business approved by the CSRC.

Article 3 A fund management company shall observe laws, administrative regulations and the provisions of the CSRC and self-regulatory rules of the Asset Management Association of China, be honest, faithful, prudent, diligent loyal, and responsible, and manage fund property for the benefit of fund share holders.

Article 4 The CSRC and its detached offices shall conduct supervision over and administration on fund management companies and their business activities in accordance with the Law of the People's Republic of China on Securities Investment Funds, Company Law of the People's Republic of China and other laws, administrative regulations and the provisions of the CSRC, and in light of the principle of prudent supervision as well.

Article 5 The Asset Management Association of China shall perform self-disciplinary regulation on fund management companies and their business activities according to laws, administrative regulations, and provisions of the CSRC and principle of self-discipline.

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 shall meet the requirements of the Law of the People's Republic of China on Securities Investment Funds and the provisions of the present Measures;
2. Having articles of association complying with the Law of the People's Republic of China on Securities Investment Funds, Company Law of the People's Republic of China and the provisions of the CSRC;
3. The registered capital shall not be less than RMB 100 million, and the shareholders shall actually pay the capital in currency, and the overseas shareholders shall make capital contribution in convertible currency;
4. Having 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, etc., and the appointed senior managers and business personnel are not less than 15 persons and shall have obtained fund practicing qualification;
5. Having a business place, safety and prevention facilities meeting the requirements and other facilities related to the business;
6. Having set up organizations and posts with reasonable division of work and clear functions;
7. Having such internal monitoring systems as supervision, audit and risk control, which meet the requirements of the CSRC; and
8. Other conditions as prescribed by the CSRC upon the approval of the State Council.

Article 7 Applying for establishment of a fund management company, a shareholder whose proportion of capital contribution or shares held accounts for more than 5% of the registered capital of the fund management company (hereinafter referred to as the proportion of capital contribution), shall satisfy the following requirement:.
1. The registered capital and net assets shall not be lower than RMB 100 million, and the quality of the assets is in good condition;
2. Have been running the company for over three consecutive fiscal years, and the corporate governance is sound with well-functioning internal monitoring systems;
3. Have no records of administrative sanction or criminal punishment due to acts of violation of law or breach of regulations in the past 3 years;
4. Have no acts of embezzling capitals of customers or other acts impairing interests of customers;
5. Not be under investigation by the regulatory institution due to acts in violation of laws and regulations or not being in rectification period; and
6. Have good public credit standing, having no record of bad conducts in administrative departments of financial regulation, taxation and industry and commerce, and such institutions as self-disciplinary management and commercial banks, etc.


Article 8 A main shareholder of a fund management company shall refer to the person who holds highest proportion but less than 25% of shares of the fund management company.
A main shareholder shall, in addition to meeting requirements specified in Article 7 hereof, satisfy the following requirements:
1. Engage in securities business, securities investment consulting, trust asset management and other financial asset management business.
2. The registered capital shall not be less than RMB 3 million;
3. Have better business achievements and the quality of the asset is in good conditions.


Article 9 In a Sino-foreign joint venture fund management company, the domestic shareholder who has the highest proportion of shares shall meet the requirements for main shareholders as prescribed in Article 8 of the present Measures. Other domestic shareholders who hold more than 5% of shares shall meet the requirements as prescribed in Article7of the present Measures.
The overseas shareholder in a Sino-foreign joint venture fund management company shall meet the following requirements:
1. Being a financial institution that is established according to the law of the country or district it is located, having been existing legally and having financial assets management experiences, steady and sound finance, good credit, and not having been subject to the punishment of any regulatory institution or judicial department in the past three years;
2. The country or district it is located has sound securities laws and regulatory systems, and its securities regulatory institution has signed the securities regulatory cooperation understanding memorandum with the CSRC or with other institutions recognized by the CSRC, and has been keeping effective regulatory cooperative relations;
3. The paid-in capital is not less than the equivalence of RMB 300 million of convertible currency; and
4. Other requirements as prescribed by the CSRC upon the approval of the State Council.
The preceding provisions shall be applicable to the investment institutions in Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan district.

Article 10 The proportion of shareholding by shareholders of a fund management company shall comply with the provisions of the CSRC. The proportion of capital contribution of or proportion of rights and interests owned by the foreign party of a Sino-foreign joint venture fund management company accumulatively (including those owned directly and indirectly) may not exceed those in the commitment made by the state securities industry for opening to the outside world.

Article 11 The number of one institution shared or multi-institution shared fund management companies controlled by the same actual controller may not exceed two, of which the number of share holding fund management companies may not exceed one.

Article 12 When applying for establishing a fund management company, an applicant shall submit materials of application for the establishment in accordance with the provisions of the CSRC.
The main shareholders shall organize and coordinate the relevant matters concerning the establishment of a fund management company, and bear the major responsibility for the truthfulness and completeness of the application materials.

Article 13 Where, during the application, there is any major change in the matters involved in the application materials, the applicant shall submit updated materials to the CSRC within 5 workdays from the date of occurrence of such change. If there is any alteration on shareholders, the application materials shall be re-submitted.

Article 14 The CSRC shall accept the application for establishing a fund management company in accordance with the Administrative Licensing Law of the People's Republic of China and the Law of the People's Republic of China on Securities Investment Funds, conduct examination and make decision.

Article 15 The CSRC may take the following measures to conduct examination on the application for establishing a fund management company:
1. Solicit opinions of the relevant institutions and departments on such aspects as the conditions of shareholders;
2. Conduct examination on the contents of the application documents by taking such ways as expert's appraisal and checking, etc.; or
3. Conduct on-site inspection on the preparation for the establishment of the fund management company within 5 months from the date of acceptance.

Article 16 In case the establishment of a fund management company has been approved by the CSRC, the applicant shall go through the registration formalities within 30 days from the date when receiving the document of approval, and he shall obtain the Certificate of Qualification for Fund Management from the CSRC upon the strength of the Business License of Enterprise Legal Person issued by the administrative department for industry and commerce.
A Sino-foreign joint venture fund management company shall also apply for obtaining the Certificate of Approval for Foreign Investment Enterprises in accordance with the provisions of laws and administrative regulations and open a foreign exchange capital account.
A fund management company shall make a public notice on its establishment in the newspapers and periodicals designated by the CSRC within 10 days from the date when it has completed the formalities for industry and commerce registration.

Chapter III Alteration and Dissolution of Fund Management Companies

Article 17 In case of altering any of the following major matters concerned, a fund management company shall report to the CSRC for approval:
1. Alteration of any shareholder with shareholding of more than 5% of shares of the company;
2. Alteration of shareholders with shareholding of less than 5% but inducing significant impact on the corporate governance;
3. Alteration of shareholding ratio of shareholders that exceeds more than 5%;
4. Amendment of material terms of articles of association; and
5. Other major matters prescribed by the CSRC.

Article 18 After a fund management company alters any shareholder, registered capital or proportion of shareholding of shareholders, the provisions of the CSRC on shareholder's conditions, proportion of shareholding of shareholders, amount and registered capital of shareholder shared fund management companies shall be complied with.

Article 19 A shareholder of a fund management company shall abide by the following provisions when disposing of his/its equity:
1. The shareholder shall be honest and in good faith when transferring equity, abide by the commitment he/it made in subscribing or assigning equity, and may not impair the lawful rights and interests of fund share holders;
2. When transferring equity, the shareholder shall observe the provisions of the Company Law of the People's Republic of China, and may not do harm to the lawful rights and interests of other shareholders by taking such improper means as falsely reporting the transfer price, etc.;
3. The shareholder and the transferee shall clarify the relevant matters concerned in the transfer period, so as to ensure that the lawful rights and interests of the fund management company and fund share holders will not be impaired. No shareholder or the transferee thereof may dispose of his/its equity by such forms as equity held on behalf of holders, share right custody, trust contract or secret agreement, etc.;
4. In case the relevant matters concerning the alteration of shareholders are not approved by the CSRC or the relevant legal procedures have not been performed, the transferor shall continue to perform shareholder's duties and bear the corresponding liabilities, and the transferee may not exercise shareholder's rights in any form; or
5. Other provisions as prescribed by laws, administrative regulations and the articles of associations of the company.

Article 20 A shareholder must pay the full capital in currency for the registered capital increased by a fund management company.

Article 21 In case a fund management company alters any major matters, it shall file an alteration application in accordance with the provisions of the CSRC within 60 days from the date when the board of directors or the shareholders' meeting (assembly) makes the resolution. If the alteration involves the transfer of equity 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 accept the application of a fund management company for alteration of major matters in accordance with the Administrative Licensing Law of the People's Republic of China and the Law of the People's Republic of China on Securities Investment Funds, then conduct examination and make a decision.

Article 23 The CSRC may conduct examination on the application of a fund management company for alteration of major matters concerned by taking such measures as talking to the relevant personnel, conducting expert's appraisal and checking, etc.
For the alteration of the main shareholders of a fund management company, alteration of a shareholder whose total shareholding exceeds 50%, or alteration of shareholders who have nominated most of the board numbers, the CSRC shall conduct examination by referring to the provisions of the present Measures for the establishment of a fund company.

Article 24 In case the alteration of major matters of a fund company involves the industry and commerce registration, the fund management company shall go through the alteration registration formalities at the administrative department for industry and commerce within 30 days from the date of receiving the document of approval.
If a fund management company is changed into a Sino-foreign joint venture fund management company, it shall also apply for obtaining the Certificate of Approval for Foreign Investment Enterprises in accordance with the relevant provisions and open a foreign exchange capital account.

Article 25 The election and changing of senior managers of a fund management company to other posts shall abide by the laws, administrative regulations and the provisions of the CSRC.

Article 26 In case the major alteration matters of a fund management company involve the alteration of the contents of Certificate of Qualification for Fund Management, the fund management company shall apply to the CSRC for renewal of the Certificate of Qualification for Fund Management.

Article 27 A fund management company shall issue a public notice on the major alteration matters in accordance with laws, administrative regulations and the provisions of the CSRC.

Article 28 The dissolution of a fund management company may not be conducted until the CSRC has cancelled its fund management qualification.
The dissolution of a fund management company shall be handled in accordance with the Company Law of the People's Republic of China and other laws and administrative regulations.

Chapter IV Establishment, Alteration and Revocation of the Branches and Subsidiaries of a Fund Management Company

Article 29 A fund management company may, in light of the needs of the professional management, establish subsidiaries, branch companies or branch institutions in other forms as prescribed by the CSRC.
The subsidiary may engage in asset management for designated clients, fund sales and other business approved by the CSRC.
A branch of a fund management company or branch institutions in other forms as prescribed by the CSRC may undertake the development of fund varieties, fund sales, and other business activities authorized by the fund management company.
The fund management company shall, in light of actual circumstances, set up prudently and improve reasonably the organizational model for business management, conduct the adequate assessment and argumentation when establishing subsidiaries and branches and perform the necessary internal decision-making procedures.

Article 30 A fund management company shall be the controlling shareholder of its subsidiary company, which shall comply with provisions in laws and regulations concerned when conducting relevant businesses. A necessary isolation wall system shall be established between the fund management company and its subsidiaries and among its subsidiaries so as to prevent possible risk transition and interest conflict.

Article 31 A fund management company shall meet the following requirements for establishing a subsidiary or branch:
1. Its corporate governance is sound with well-functioning internal monitoring system, stable business management, and stronger ability for continuous management;
2. The company has not been subject to administrative sanctions or criminal penalties due to activities in violation of laws and regulations in the past year;
3. The company is not under investigation by the regulatory institutions due to activities in violation of laws and regulations, or not being in the rectification period;
4. The subsidiary or branch to be established has a name, offices, business personnel, safety and prevention facilities and other facilities relating to the business as required;
5. The subsidiary or branch to be established has clear functions and sound management system; and
6. Other requirements as prescribed by the CSRC.

Article 32 A fund management company shall submit the application documents according to the provisions of the CSRC for establishing a subsidiary or branch within 60 days from the date when the board of directors or the shareholders' meeting (assembly) has made the resolution.

Article 33 The CSRC shall accept the application of a fund management company for establishing a subsidiary or branch in accordance with the Administrative Licensing Law of the People's Republic of China and the Law of the People's Republic of China on Securities Investment Funds, then conduct examination and make a decision.
The CSRC may conduct on-site inspection on the subsidiaries or branches to be established.

Article 34 In case a fund management company alters or revokes any branch, it shall report to the CSRC and the local detached office of the CSRC within 15 days from the date of alteration or revocation.
When establishing, altering or revoking the offices, the fund management company shall, within 15 days of such establishment, alteration or revocation, report to the CSRC and the local detached office of the CSRC.

Article 35 A fund management company shall go through the registration formalities for establishing branches at the administrative department for industry and commerce within 30 days from the date of receiving the document of approval.
A fund management company shall go through the relevant formalities for alteration or revocation of any branch according to the relevant provisions at the administrative department for industry and commerce.

Article 36 A fund management company shall issue a public notice on matters concerning the establishment, alteration or revocation of any subsidiary or branch in accordance with laws, administrative regulations and the provisions of the CSRC.

Chapter V Control and Management of Fund Management Companies

Article 37 A fund management company shall establish a management structure with sound organizations, clear division of functions, effective control and supervision, reasonable stimulation and restriction in accordance with the Company Law of the People's Republic of China and other laws, administrative regulations and the provisions of the CSRC, so as to keep the operation of the company up to the standard, and protect the interests of the fund share holders.
The basic principle of placing interests of fund share holders in priority shall be followed in corporate governance. If interests of the fund management company and its shareholders and employees conflict with interests of fund share holders, interests of fund share holders shall be ensured in priority.

Article 38 Shareholders of a fund management company shall perform their legal obligations, and may not contribute capital falsely, withdraw or withdraw in disguised form the capital contributed.
Any shareholder of a fund management company may not hold equities of the fund management company on behalf of other institutions or individuals, nor entrust other institutions or individuals to hold equities on behalf of it. Shareholders and the actual controller of the fund management company may not misappropriate or transfer assets of the fund management company in any form.
Main shareholders of the fund management company shall adhere to the philosophy of long-term investment and make a commitment in written form that it will hold equities of the fund management company for no less than 3 years.

Article 39 A fund management company shall clarify the scope of functions and procedures of the shareholders' meeting (assembly).
A fund management company shall establish a business separation system with shareholders and the critical information isolation system of customers. Shareholders and actual controllers of the fund management company shall exercise his/its power through shareholders' meeting (assembly) according to law, and may not exceed the boundary of shareholders' meeting(assembly) and the board of directors as to appointment and dismissal of directors, supervisors and senior managers or to directly interfere with the business management of the fund management company or the investment operation of fund property, nor may he/it require the fund management company to render cooperation for him in such business activities as securities underwriting and securities investment, etc. to impair the lawful rights and interests of fund share holders and other parties.
A shareholder of the fund management company or shareholders of associated relations singly or aggregately holding more than 50% shares and its or their controlled institutions may not operate public or public-like securities assets management businesses.

Article 40 The main shareholders of a fund management company shall, when the company is unable to carry out regular business operation, call in other shareholders and the relevant parties to handle the relevant matters concerned properly in light of the principle of being beneficial to the protection of the interests of fund share holders.

Article 41 A fund management company shall clarify the scope of functions and procedures of the board of directors. The board of directors shall be responsible for formulating the basic systems of the company in accordance with the provisions of laws, administrative regulations and articles of association of the company, making decisions on the relevant major matters concerned, and supervising over and giving rewards and punishments to the business management personnel. Meeting of the board of directors shall be convened and chaired by the chairman of the board. The board of directors and board chairman may not intervene in the operation and management personnel's specific operation acts by surpassing their authorities.
When assessing performance of operation and management personnel, the board of directors shall focus on long-term investment performance of the fund, corporate compliance and risk controlling and other indicators protecting interests of fund share holders instead of short-term fund management scale, earnings and growth.
The general manager of the fund management company shall be a member of the board of directors. Number of directors of associated relations with a shareholder of the fund management company or shareholders of associated relations singly or aggregately holding more than 50% shares may not exceed 1/3 of the total directors.

Article 42 A fund management company shall establish and improve its independent director system, the independent directors may not be less than 3 persons, and may not be less than one third of the number of the board of directors.
Independent directors shall be independent from the fund management company and its shareholders, be diligent and put forward objective and justified professional judgment for major issues of fund assets and corporate operation in accordance with law by taking maximizing interests of fund share holders as the starting point.

Article 43 When the board of directors of the fund management company discusses the following matters concerned, they shall be passed under the approval of more than two thirds of the independent directors:
1. A major related-party transaction of the company and in fund investment operation;
2. Auditing affairs of the company and the fund, hiring or altering an accountant firm;
3. Semi-annual report and annual report of the fund under the management of the company; and
4. Other matters prescribed by laws, administrative regulations and articles of association of the company.

Article 44 A fund management company shall establish and improve a supervisor system. The supervisor shall be appointed by the board of directors and shall be responsible to the board of directors, and make supervision over and audit on the legality and compliance of business operation of the company.
In case the supervisor finds out that there exists major risk in the company or any activity of the company in violation of laws and regulations, he shall notify the general manager and other relevant senior managers, and report to the board of directors, the CSRC and the detached office of the CSRC in the district where the company is located.

Article 45 A fund management company shall strengthen the role of the board of supervisors or executing supervisors for their supervision over the finance of the company and the performance of the board of directors, so as to protect the lawful rights and interests of shareholders.
The board of supervisors shall be composed of shareholder representatives and corporate employee representatives, and ratio of the employee representatives may not be less than 1/2 of the total supervisors. If no board of supervisors is established, there must be at least 1 employee representative in the executive supervisors.
The board of supervisors and chairman of the board and executive supervisors may not intervene in the operation and management personnel's specific operation acts by surpassing their authorities.

Article 46 The general manager of a fund management company shall be responsible for the business management of the company. The senior managers and other staff members of a fund management company shall perform their duties faithfully and diligently, and may not seek improper interests for any shareholder, themselves or others.

Article 47 During the period when the main shareholders of the fund management company are unable to operate normally or equities of the fund management company are subject to transfer, directors, supervisors, managers, shareholders and parties concerned of the fund management company shall perform duties in accordance with law and be diligent in properly carrying out the arrangement of risk prevention so as to ensure the company run normally and protect interests of fund share holders from being infringed upon.

Article 48 The fund management company shall uphold the philosophy of prudent operation, keeping scale of managed assets matching with its own personnel reservation, investment research and client service capability, information technology system's tolerance, risk management and internal monitoring level so as to actually protect long-term interests of fund share holders.

Article 49 A fund management company shall establish an internal monitoring system, which is scientific, reasonable, strictly controlled and operated with high efficiency in accordance with the provisions of the CSRC, establish a scientific and sound internal monitoring structure, keep the business operation legal and compliant, and keep the internal monitoring sound and effective.

Article 50 A fund management company shall establish and improve an investment management system consisting of such links as authorization, research, decision-making, execution and appraisal, and treat fairly the different fund properties and clients' assets under its management.

Article 51 A fund management company shall establish sound fund financial business accounting and fund asset appraisal systems, abide by strictly the relevant provisions of the state, and reflect the status of its fund properties timely, accurately and completely.

Article 52 A fund management company shall establish an information technology system in line with its corporate development strategy and business operation in accordance with requirements of relevant laws, regulations and industry regulatory, industrial technological standards and principles of safety, practicability and operability.

Article 53 A fund management company shall establish and improve the human resources management system, regulate the post responsibility, strengthen the employees training, establish the incentive and restraint mechanism accommodating with the development of the company, and interest binding mechanism of fund practitioners with holders of fund shares so as to provide the support of human resources for the operation, management and sustainable development of the company.

Article 54 A fund management company shall establish and improve its customer service standard, strengthen sales management, regulate fund publicity and introduction, and may not have unjustifiable sales and unfair competition activities.

Article 55 A fund management company shall maintain a sound finance status to meet needs of corporate operation, business development and risk prevention.
The fund management company shall establish and improve its finance management bylaws and strictly implement the State's financial and economical laws and regulations, listing relevant capital or assets in its appropriate accounting book.

Article 56 A fund management company may increase its registered capital accordingly in light of the principle of prudent management and upon the need of business development.
A fund management company shall draw risk reserves as required.

Article 57 A fund management company shall manage and use its own capital in accordance with the provisions of the CSRC.
A fund management company shall, when managing or using its own capital, maintain the regular business operation of the company, and may not impair the lawful rights and interests of the fund share holders.

Article 58 A fund management company shall establish a prediction scheme for emergency to properly cope with those emergencies that seriously impact interests of fund share holders, possibly give rise to systematic risks or seriously impact social steadiness.

Article 59 A fund management company may entrust, based on its own needs of development strategy, a well-qualified fund service institution to go through fund share registry, calculation, evaluation, development and maintenance of information technology system and other businesses on its behalf, however, responsibilities that the fund management company shall assume will not be exempted due to such entrustment.
If entrusting a fund service institution to handle partial businesses, the fund management company shall conduct a full assessment and argument, perform necessary internal decision-making procedures, prudently fix scope and contents of the entrusted businesses and the entrusted fund service institution, formulate risk management and emergency response bylaws for entrusted businesses and strengthen evaluation and constraint of the entrusted fund service institution so as to ensure confidentiality and safety of business information and protect lawful rights and interests of fund share holders and the company's trade secrets, etc.

Article 60 A fund management company shall, within 10 days upon conclusion of the entrustment agreement with a fund service institution, report CSRC and its local detached office the scope and contents of the entrusted businesses, basic information and business preparation status of the entrusted fund service institution and principal risks and risk prevention measures, etc. The fund management company shall disclose relevant information of entrusted business in its prospectus, fund contracts, annual fund report, semi-annual fund report, and the fund management company's annual report.
The fund service institution engaged in entrusted businesses shall be of sound governance structure, normal operation and good finance status, have professional teams, business premise, safety precaution facilities and technological facilities, etc. matching with handling entrusted businesses, and shall have perfect internal control, risk management, emergency response systems and business operating processes, etc. When developing relevant entrusted businesses, the fund service institution and its personnel shall be diligent, faithful and prudent in their duties, ensure the entrusted businesses run safe and effective, keep trade secrets, and may not release non-public information known from the entrusted businesses or use such information for soliciting interests and may not infringe upon lawful rights and interests of fund share holders.

Chapter VI Supervision and Administration

Article 61 In case any fund management company or any shareholder of a fund company hides the relevant conditions or provides false materials when applying for approval of relevant matters, the CSRC shall not accept the application. In case 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 operation, risk status, and the relevant business activities of any fund management company in accordance with the provisions of laws, administrative regulations and the provisions of the CSRC and in light of the principle of prudent supervision.

Article 63 The off-site inspection shall mainly be carried out by ways of checking and reviewing the materials submitted by a fund management company.
A fund management company shall submit the following materials to the CSRC and the detached office of the CSRC in the district where it is located:
1. Annual report of a fund management company audited by an accountant firm that has qualification of undertaking relevant securities business;
2. Annual appraisal report on the internal monitoring of a fund management company issued by an accountant firm that has qualification of undertaking relevant securities business;
3. Quarterly report and annual report of supervision and audit; and
4. Other materials as required by the CSRC in light of the principle of prudent supervision.

Article 64 A fund management company shall submit the annual report and annual appraisal report of the fund management company within 3 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 In case any of the following circumstances occurs to a fund management company, the company shall report to the CSRC and the detached office of the CSRC in the district where it is located within 5 days:
1. Alteration of shareholders with shareholding of less than 5% of shares of the company;
2. Alteration of shareholding ratio of not less than 5% held by shareholders;
3. Alteration of name or domicile;
4. Increase or reduction of registered capital with the same proportion held by shareholders;
5. Revision of the general provisions of the Articles of Association;
6. The company and its directors, senior managers, fund managers are subject to criminal or administrative penalties;
7. The company and its directors, senior managers, fund managers are under the investigation of regulatory institutions or judicial departments;
8. The financial status of the company has major adverse changes;
9. Suffered a major complaint due to negligence of the company;
10. Facing significant litigations; or
11. Other matters that have a great influence to the operation of the company.
In case of matters prescribed in Items (6) through (11) of the preceding paragraph occurring, the fund management company shall inform the same to the entire shareholders in the written form.
In case any of the emergencies as prescribed in Article 58 of the present Measures occurs to a fund management company, the company shall report immediately to the CSRC and the detached office of the CSRC in the district where it is located.

Article 66 If shareholders of a fund management company fall within any of the following circumstances, they shall report to the fund management company in a written form and report to CSRC and its local detached offices within 5 days:
1. Alteration of name or premise;
2. Alteration of controlling shareholders or actual controllers;
3. Main shareholders have been suffering loss for 3 consecutive years;
4. The equities held are subject to conservatory measures in litigation and other measures by judicial authorities;
5. The shareholders decide to dispose of their equities;
6. The shareholders are of acquisition, split-up or restructuring of major assets or debts;
7. The shareholders are filed for case and investigated by regulatory or judicial authorities;
8. The shareholders are subject to such regulatory measures as ordering to suspend business for rectification, appointing other institutions to manage them in trust or to take them over, or canceling them or entering into procedures of bankruptcy or liquidation; or
9. Other issues inducing major impact upon the company operation.

Article 67 In case the competent authority at the registration place or the district of main business activities of an overseas shareholder of a Sino-foreign joint venture fund management company requires record filing of overseas investment, the overseas shareholder shall, after having obtained the approval document of the CSRC according to law, submit the relevant record filing materials to the competent authority at its registration place or the district of main business activities, and submit the duplicate to the CSRC at the same time.

Article 68 The CSRC may take the following measures to conduct on-site inspections on fund management companies, and determine the objects, contents, and frequency of on-site inspections according to the routine supervision conditions:
1. Enter a fund management company and its subsidiaries and branches to conduct the inspections;
2. Require a fund management company to provide the relevant documents, minutes of meeting, statements, certificates, and other materials in relation to the inspection;
3. Inquire of the staff members of a fund management company and requiring them to provide explanations on the relevant matters inspected;
4. Refer to or reproducing the relevant documents or materials of a fund management company relating to the matters under inspection, and sealing up and keeping the documents or materials that are likely to be transferred, hidden or destroyed;
5. Check the information technology system of a fund management company; and
6. Other measures prescribed by the CSRC.

Article 69 When the CSRC conducts an on-site inspection on a fund management company, the inspectors shall not be less than two persons, and shall show their legal certificates. If the inspectors are less than two persons or fail to show their legal certificates, the fund management company shall have the right to refuse the inspection.
The CSRC may engage certified accountants, lawyers and other professionals to provide professional services for the inspection work.

Article 70 A fund management company and the relevant personnel shall cooperate with the CSRC on the inspections, no one may refuse or delay in providing the relevant materials for any reason, nor may any one provide false, inaccurate or incomplete materials.

Article 71 The CSRC shall issue the inspection conclusion to a fund management company under inspection after conducting an on-site inspection on the fund management company.

Article 72 The CSRC may, in light of need for regulation, establish risk control indicator monitoring system and regulatory comprehensive assessment system for fund management companies. If any risk control indicator or regulatory comprehensive assessment indicator dissatisfies the provisions, the CSRC may order companies to make correction within the specified time limit and may adopt such administrative regulatory measures as requiring companies to increase registered capitals, improve the withdrawing ratio of risk reserves, suspending partial or all businesses, etc.

Article 73 If any violation of these Measures falls within any of the following circumstances, the CSRC shall order the violator to make correction, impose warning and penalty below RMB 30,000 thereupon, and impose warning upon its managers kept liable and other directly responsible personnel, cancel their qualification for holding position or fund practice, and impose penalty below RMB 30,000 thereupon:
1. The violator holds over 5% equities of a fund management company without approval, or becomes a shareholder of the fund management company by providing false application materials;
2. The violator entrusts others to hold equities of a fund management company or is entrusted to hold equities of a fund management company on behalf of others;
3. Shareholders and their actual controllers of a fund management company misappropriate or transfer assets of the fund management company; or
4. Shareholders and their actual controllers of a fund management company force or incite the fund management company to provide cooperation to them or accept the company's cooperation, in such business activities as securities underwriting and investment of securities, to infringe upon lawful rights and interests of fund share holders and other parties concerned.

Article 74 If any violation of these Measures falls within any of the following circumstance, the CSRC shall order the violator to make correction and shall adopt such administrative regulatory measures over its shareholders, actual controller, directors, supervisors, senior managers kept liable and other directly responsible personnel as conducting a regulatory talk therewith, issuing a letter of warning, suspending their performance of duties, etc:
1. Shareholders or actual controllers of the fund management company appoint and dismiss the company's directors, supervisors and senior managers by overleaping the shareholders' meeting (assembly) and board of directors;
2. Shareholders or actual controllers of the fund management company directly intervene in the company's operation and management or investment and operation of fund properties by overleaping the shareholders' meeting (assembly) and board of directors;
3. The fund management company and its shareholders and actual controllers fail to perform obligations of reporting on schedule; or
4. Assessment of operation and management personnel by the fund management company's board of directors goes against provisions.

Article 75 If any fund management company falls within any of the following circumstances, the CSRC shall order it to make rectification within a specified time limit, and may suspend during its rectification period accepting and examining its application for raising fund products or other business application, and shall adopt such administrative regulatory measures over its directors, supervisors, senior managers kept liable and other directly responsible personnel as conducting a regulatory talk therewith, issuing a letter of warning, suspending their performance of duties, etc:
1. The corporate governance is not sound, which seriously impact independence, completeness and integrity of the company;
2. The corporate internal control system is not improved, relevant systems cannot be executed effectively, and therefore there exist major potential risks or larger risk events occurred;
3. It carries out a loose management of its subsidiaries and branches, or the hired fund service institution does not have basic qualifications, and therefore there exist major potential risks or larger risk events occurred; or
4. Material illegalities or irregularities occurred.
If the fund management company fails to complete rectification within the specified time limit, the CSRC may suspend approving its establishment of new subsidiaries or branches; restrict it from distributing bonus, from paying remunerations or providing welfares to those directors, supervisors and senior managers kept liable; order it to change those directors, supervisors and senior managers kept liable or to restrict their authorities. For extraordinarily serious circumstances, the CSRC may adopt such regulatory measures as appointing other institutions to manage it in trust, taking it over or canceling it, and imposing warning and penal below RMB 30,000 upon those directors, supervisors and senior managers kept liable and directly responsible personnel.

Article 76 If a fund management company's net assets are less than RMB 40 million or its cash, bank deposits, treasury bonds and other exercisable current assets are less than RMB 20 million and less than its last year's revenue expenditures, the CSRC may suspend accepting and examining its application for raising fund products or other business applications, and require it to improve financial liquidity within a specified time limit. If its financial status continues to deteriorate, the CSRC shall order it to suspend business for rectification.
The fund management company ordered to suspend business for rectification shall entrust, within the specified time limit, its managed fund assets to a fund management company recognized by the CSRC for management. If it fails to entrust within the specified time limit as required, the CSRC may appoint other institutions to manage its fund management businesses in trust.

Article 77 Where any fund service institution releases non-public information known from fiduciary businesses or uses such information for soliciting interests and infringes upon lawful rights and interests of fund share holders, it shall be ordered to make correction, imposed upon warning and penalty below RMB 30,000. And warning and a penalty below RMB 30,000 shall be imposed upon its directly responsible managers and other personnel kept directly liable.

Article 78 Where fund management companies, shareholders and actual controllers of fund management companies, and fund service institutions and their directly responsible managers and other personnel kept directly liable violate these Measures and other relevant provisions, administrative punishments, if appropriate in accordance with law, shall be imposed thereupon in accordance with provisions concerned; and they shall be transferred to judicial authorities for criminal responsibilities if suspected of any crime.

Chapter VII

Article 79 Sino-foreign joint venture fund management companies as mentioned in the present Measures shall include: fund management companies established by overseas shareholders and domestic shareholders jointly, and fund management companies altered from assignment or purchase of share rights of domestic fund management companies by overseas shareholders.

Article 80 The specific administrative measures for the establishment of subsidiaries by the fund management company shall be prescribed separately by the CSRC.

Article 81 The present Measures shall come into effect as of November 1, 2012. The Administrative Measures for Securities Investment Fund Management Companies (Order of the China Securities Regulatory Commission No.22) shall be repealed simultaneously.