合格境外机构投资者境内证券投资管理暂行办法

颁布日期：20021105 　实施日期：20021201 　颁布单位：中国证券监督管理委员会、 中国人民银行

China Securities Regulatory Commission

People's Bank of China

Decree No. 12

The “Provisional Measures on Administration of Domestic Securities Investments of Qualified Foreign Institutional Investors （QFII）”， which will come into effect from 1 December 2002， is hereby promulgated.

CSRC Chairman： Zhou Xiaochuan

PBOC Governor： Dai Xianglong

Provisional Measures on Administration of Domestic Securities Investments of Qualified Foreign Institutional Investors （QFII）

Chapter 1. General Provisions

Article 1. Based upon China's relevant laws and administrative regulations， this Regulation was promulgated for the purpose of governing Qualified Foreign Institutional Investors' investments in China's securities market and promoting developments of China's securities market.

Article 2. Qualified Foreign Institutional Investors （hereinafter referred to as “QFII” which can be a single or a plural， as the case may be） are defined in this Regulation as overseas fund management institutions， insurance companies， securities companies and other assets management institutions which have been approved by China Securities Regulatory Commission （hereinafter referred to as “CSRC”） to invest in China's securities market and granted investment quota by State Administration of Foreign Exchange （hereinafter referred to as “SAFE”）。

Article 3. QFII should mandate domestic commercial banks as custodians and domestic securities companies as brokers for their domestic securities trading.

Article 4. QFII should comply with laws， regulations and other relevant rules in China.

Article 5. CSRC and SAFE shall， in accordance with the laws， supervise and govern the securities investing activities undertaken by QFII within the jurisdiction of China. Chapter 2. Qualifications， Criteria and Approval Procedures

Article 6. A QFII applicant should fall within the following criteria：

（1） The applicant should be in sound financial and credit status， should meet the requirements set by CSRC on assets size and other factors； and its risk control indicators should meet the requirements set by laws and securities authorities under its home jurisdiction；

（2） Employees of the applicant should meet the requirements on professional qualifications set by its home country/region；

（3） The applicant should have sound management structure and internal control system， should conduct business in accordance with the relevant regulations and should not have received any substantial penalties by regulators in its home country/region over the last three years prior to application；

（4） The home country/region of the applicant should have sound legal and regulatory system， and its securities regulator has signed Memorandum of Understanding with CSRC and has maintained an efficient regulatory and co-operative relationship；

（5） Other criteria as stipulated by CSRC based on prudent regulatory principles.

Article 7. The criteria of assets scale and other factors as referred to in the aforesaid article are：

For fund management institutions： Having operated fund business for over 5 years with the most recent accounting year managing assets of not less than US$10 billion；

For insurance companies： Having operated insurance business for over 30 years withpaid-in capital of not less than US$1 billion and managing securities assets of not less than US$10 billion in the most recent accounting year；

For securities companies： Having operated securities business for over 30 years withpaid-in capital of not less than US$1 billion and managing securities assets of not less than US$10 billion in the most recent accounting year；

For commercial banks： Ranking among the top 100 of the world in the total assets forthe most recent accounting year and managing securities assets of not less than US$10 billion.

CSRC may adjust the aforesaid requirements subject to the developments of securities market.

Article 8. To apply for QFII qualification and investment quota， an applicant should submit the following documents to CSRC and SAFE respectively through its custodian：

1. Application Forms （including basic information on the applicant， investment quota applied for and investment plan， etc.）；

2. Documents to verify that the applicant meets requirements set in Article 6；

3. Draft Custody Agreement signed with its expected custodian；

4. Audited financial reports for the most recent 3 years；

5. Statement on sources of the funds， and Letter of Undertaking promising not to withdraw funds during the approved period；

6. Letter of authorisation by the applicant；

7. Other documents as required by CSRC and SAFE.

All the aforesaid documents， if written in languages other than Chinese， must be accompanied by their Chinese translations or Chinese extracts.

Article 9. The CSRC shall， within 15 working days from the date the full set of application documents are received， determine whether to grant approval or not. Securities Investment Licences will be issued to those applicants whose applications have been approved whereas written notices will be given to those applicants whose applications have been rejected.

Article 10. Applicants shall apply to the SAFE through their custodians for investment quotas after obtaining the Securities Investment Licences.

SAFE shall， within 15 working days from the date full set of application documents are received， determine whether to grant approval or not. Applicants whose applications have been approved will be notified in writing their permitted investment quotas and Foreign Exchange Registration Certificates will be issued. Written notices will be given to those applicants whose applications have been rejected.

The Securities Investment Licence will automatically become void if an applicant is unable to obtain the Foreign Exchange Registration Certificate within one year after the Securities Investment Licence is granted.

Article 11. In order to encourage medium and long-term investments， preference will be given to the institutions managing closed-end Chinese funds subject to the requirements of Article 6 or pension funds， insurance funds and mutual funds with good investment records in other markets. Chapter 3. Custody， Registration and Settlement

Article 12. A custodian should meet the following requirements：

（1） Has a specific fund custody department；

（2） With paid-in capital of no less than RMB 8 billion；

（3） Has sufficient professionals who are familiar with custody business；

（4） Can manage the entire assets of the fund safely；

（5） Has qualifications to conduct foreign exchange and RMB business；

（6） No material breach of foreign exchange regulations for the recent three years.

Domestic branches of foreign-invested commercial banks with more than three years of continual operation are eligible to apply for the custodian qualification. Their paid-in capital eligibility shall be based on their overseas headquarters' capital.

Article 13. Approvals from CSRC， People's Bank of China （hereinafter referred to as “PBOC”） and SAFE are required for custodian status.

Article 14. Domestic commercial banks should submit the following documents to CSRC， PBOC and SAFE to apply for custodian status：

1. Application Forms；

2. Copy of its financial business licence；

3. Management system in relation to its custody business；

4. Documents verifying that it has efficient information and technology system；

5. Other documents as required by CSRC， PBOC and SAFE.

CSRC， together with PBOC and SAFE， will review application documents and decide whether to approve the applications or not.

Article 15. A custodian shall perform the following duties：

1. Safekeeping all the assets that QFII put under its custody；

2. Conducting all QFII related foreign exchange settlement， sales， receipt， payment and RMB settlement businesses；

3. Supervising investment activities of QFII， and reporting to CSRC and SAFE in case QFII investment orders are found to have violated laws or regulations；

4. Reporting to SAFE about foreign exchange remittance and repatriation of QFII， in two working days after QFII remits/repatriates its principal/proceeds ；

5. Reporting to CSRC and SAFE about the status of QFII's RMB special account， in five working days after the end of each month；

6. Compiling an annual financial report on QFII's domestic securities investment activities in the previous year and sending it to CSRC and SAFE in three months after the end of each accounting year；

7. Keep the records and other related materials on QFII's fund remittance， repatriation， conversion， receipt and payment for no less than 15 years；

8. Other responsibilities as defined by CSRC， PBOC and SAFE based on prudentsupervision principles.

Article 16. A custodian should strictly separate its own assets from those under its custody.

A custodian should set up different accounts for different QFII， and manage those accounts separately.

Each QFII can only mandate one custodian.

Article 17. QFII should mandate its custodian to apply for a securities account on its behalf with securities registration and settlement institution. When applying for a securities account on behalf of the QFII， a custodian should bring the QFII' mandate and its Securities Investment Licence and other valid documents， and file with CSRC the relevant situation within five working days after opening a securities account.

QFII should mandate its custodian to open a RMB settlement account on its behalf with securities registration and settlement institution. The custodian shall be responsible for the settlement of QFII's domestic securities investment， and shall file with CSRC and SAFE the relevant situation within five working days after opening a RMB settlement account.

Chapter 4 Investment Operations

Article 18. Subject to the approved investment quota， QFII can invest on the following RMB financial instruments：

1. Shares listed in China's stock exchanges （excluding B shares）；

2. Treasuries listed in China's stock exchanges；

3. Convertible bonds and enterprise bonds listed in China's stock exchanges；

4. Other financial instruments as approved by CSRC.

Article 19. QFII may mandate domestically registered securities companies to manage their domestic securities investments.

Each QFII can only mandate one investment institution.

Article 20. For domestic securities investments， QFII should observe the following requirements：

1. Shares held by each QFII in one listed company should not exceed 10% of total outstanding shares of the company；2. Total shares held by all QFII in one listed company should not exceed 20% of total outstanding shares of the company.

CSRC may adjust the above percentages based on the developments of securities market.

Article 21. QFII's domestic securities investment activities should comply with the requirements as set out in the Guidance for Foreign Investments in Various Industries.

Article 22. Securities firms should preserve the trading and transaction records of QFII for at least 15 years. Chapter 5 Fund Management

Article 23. Upon the approval of SAFE， a QFII should open a RMB special account with its custodian.

Within five working days after the opening of the RMB special account， the custodian should report to CSRC and SAFE for filing.

Article 24. Revenue articles in the RMB special account shall include： settlement of funds （foreign exchange funds from overseas， and accumulated settlement of foreign exchange should not exceed the approved investment quota）， proceeds from the disposal of securities， cash dividends， interests from current deposits and bonds. Expense articles in the RMB special account shall include： cost of purchasing securities （including stamp tax and commission charges）， domestic custodian fee and management fee， and payment for purchasing foreign exchange （to be used to repatriate principals and proceeds）。

The capital of special RMB account shall not be used for money lending or guarantee.

Article 25. Within three months after receiving Securities Investment Licence from CSRC， QFII should remit principals from outside into China and directly transfer them into RMB special accounts after full settlement of foreign exchange. The currency of the principals from QFII should be exchangeable currency approved by SAFE and the amount of the principal should not exceed the approved quota.

If QFII has not fully remitted the principals within three months after receiving Foreign Exchange Registration Certificate， the actual amount remitted will be deemed as the approved quota； thereafter the difference between approved quota and the actual amount shall not be remitted inward prior to the obtaining of a newly approved investment quota.

Article 26. In the case that a QFII is a closed-end Chinese fund management company， it can mandate its custodian， with the submission of required documents to SAFE to apply for purchase of foreign exchange for the repatriation of principals by stages and by batches three years after its remittance of the principals. The amount of each batch of principal repatriation should not exceed 20% of the total principals， and the interval between two repatriations should not be shorter than one month.

Other types of QFII can mandate their custodians， with the submission of required documents， to apply to SAFE to repatriate the principals by stages and by batches one years after their remittance of the principals. The amount of each batch of principal repatriation should not exceed 20% of the total principals， and the interval between two repatriations should not be shorter than three months.

The overseas receivers of the above-mentioned repatriation should be the QFII themselves.

Article 27. QFII whose principal of approved investment quota is remitted to China for less than one year but over three months， after the submission of transfer application form transfer contract and upon approval of CSRC and SAFE， may transfer the approved investment quota to other QFII or other applicants who have fulfilled the requirements of Article 6.

After getting Securities Investment Licence from CSRC and investment quota from SAFE， the transferee can remit the difference as its principals if the value of the transferred assets is lower than the investment quota approved by SAFE.

Article 28. If QFII intends to remit principals inwards again after it partially or fully repatriates its principals， it should re-apply for investment quota.

Article 29. If QFII needs to purchase foreign exchange to repatriate their post-tax profits of the previous accounting year which have been audited by Chinese CPA， the QFII should mandate its custodian to apply to SAFE fifteen days prior to repatriation， together with the following documents：

1. Repatriation Application Form；

2. Financial reports of the accounting year in which the profits are generated；

3. Auditor's report issued by Chinese CPA；

4. Profits distribution resolutions or other effective legal documents；

5. Tax payment certificates；

6. Other documents as required by SAFE.

The overseas receivers of the above-mentioned repatriation should be the QFII themselves.

Article 30. SAFE may adjust the timeframe required for QFII to repatriate its principal and proceeds， subject to the needs of China's foreign exchange balance. Chapter 6 Regulatory Issues

Article 31. CSRC and SAFE should annually review QFII's Securities Investment Licence and Foreign Exchange Registration Certificate.

Article 32. CSRC， PBOC and SAFE may require QFII， custodians， securities companies， stock exchanges， and securities registration and settlement institutions to provide information on QFII's domestic investment activities， and may conduct on-site inspections if necessary.

Article 33. Stock exchanges and securities registration and settlement institutions may enact new operation rules or revise previous operation rules on QFII's domestic securities investments， the implementation of which will be effective upon approval of the CSRC.

Article 34. In the event of any of the followings， QFII should file with CSRC， PBOC and SAFE in five working days：

1. Change of custodians；

2. Change of legal representatives；

3. Change of controlling shareholders；

4. Adjustment of registered capital；

5. Litigations and other material events；

6. Being imposed substantial penalties overseas；

7. Other circumstances as stipulated by CSRC and SAFE.

Article 35. . In the event of any of the followings， QFII should re-apply for its Securities Investment Licence：

1. Change of business name；

2. Acquired by or merged with other institution（s）；

3. Other circumstances as stipulated by CSRC and SAFE.

Article 36. In the event of any of the followings， QFII should surrender its Securities Investment Licence and Foreign Exchange Registration Certificate to CSRC and SAFE respectively：

1. Having repatriated all its principals；

2. Having transferred its investment quota；

3. Dispersion of authorised entities， entering into bankruptcy procedures， or assets being taken over by receivers；

4. Other circumstances as stipulated by CSRC and SAFE.

If QFII fail to pass the annual review on Securities Investment Licences and Foreign Exchange Registration Certificates， as mentioned in Article 31， the Licences/Certificates will automatically be invalid. And the QFII should return these Licences/Certificates as required by the aforesaid Article.

Article 37. In accordance with their respective authorities， CSRC， PBOC and SAFE will give warnings or penalties to QFII， custodians and securities companies， etc. who violate this Regulation. The same breach， however， should not be subject to two administrative penalties or more. Chapter 7 Supplementary Provisions

Article 38. This Regulation is also applicable to institutional investors from Hong Kong Special Administrative Region， Macao Special Administrative Region and Taiwan Region， who conduct securities investment businesses in Mainland China.

Article 39. This Regulation will come into effect from 1 December 2002.