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Rules on the Establishment
of Foreign-shared Fund Management
Companies
Decree of the China Securities Regulatory Commission No.9
June 1, 2002
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. |
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