Administrative Measures for the Operation of the Securities Investment Funds
Administrative Measures for the Operation of the Securities Investment Funds
Administrative Measures for the Operation of the Securities Investment Funds
Order of the China Securities Regulatory Commission [2004] No. 21
June 29, 2004
The Administrative Measures for the Operation of the Securities Investment Funds, which were deliberated and adopted during the 93rd executive meeting of the chairman of the China Securities Regulatory Commission, are hereby promulgated, and they shall take effect on July 1, 2004.
Chairman: Shang Fulin
Attached: Administrative Measures for the Operation of the Securities Investment Funds
Chapter I General Provisions
Article 1 The present Measures are hereby formulated, in accordance with the Law of the People's Republic of China on Securities Investment Funds, and other relevant laws and administrative regulations, to regulate the operation of the securities investment funds, protect the legal rights and interests of investors and promote the healthy development of the securities investment funds market.
Article 2 The present Measures shall apply to activities involved with raising the securities investment funds (hereinafter referred to as the fund), the purchases and redemption of fund shares, investments of fund property, distribution of fund returns, convening of fund shareholders' meetings, and other fund-operation activities.
Article 3 Anyone who undertakes fund-operation activities shall observe the laws, administrative regulations and provisions of the China Securities Regulatory Commission (hereinafter referred to as CSRC), and follow the principles of voluntariness, fairness and good faith, and may not harm State interests and/or public interests.
Article 4 CSRC and its detached offices shall supervise and administer fund-operation activities, in accordance with laws, administrative regulations and the provisions of the present Measures, as well as the principle of prudent supervision.
Article 5 Fund-industry associations shall conduct self-disciplinary management on fund-operation activities, in accordance with the laws, administrative regulations and provisions of CSRC, and the self-disciplinary rules.
Chapter II Fund Raise
Article 6 A fund manager or fund custodian, who is to be appointed, shall meet the following requirements when applying to raise a fund:
1. The fund manager, to be appointed, shall be a fund-management company established, in accordance with the law; the fund custodian, to be appointed, shall be a commercial bank that has the qualification of fund trusteeship;
2. Have fund managers and other business personnel who conform to the provisions of the CSRC, and who fit in with the fund to be raised under management and trusteeship;
3. Have sound business-process systems of investment and management, sales, registration and evaluation of funds, and have no circumstances of influencing the ordinary operation of a fund, or damaging or may damage the legal rights and interests of fund shareholders in the behavior criterion;
4. Have no record of administrative punishment or criminal punishment for acts in violation of laws and regulations in the previous year;
5. Not be under investigation, for acts in violation of laws and regulations, by supervision organs, and not be under rectification and correction;
6. Have no significant alteration on matters that have resulted in, or are likely to result in, bad influence on fund operation, or litigation, arbitration or other significant matters concerned;
7. Have no significant management risks, such as unsound corporate governance, chaos of business management, being incapable of effective implementation of internal-control and risk-control systems, deterioration of financial status, etc.;
8. When the fund contract of the fund, which is approved before a fund manager is to assume the post, has taken effect, or the time limit for raising the fund has expired, and the fund-raising cannot meet the requirements as prescribed in Article 12 of the present Measures, it has been six months since the date when the money paid by all the investors and interest have been returned; and
9. Other conditions as prescribed by CSRC, in accordance with the principle of prudent supervision.
Article 7 The following requirements - for the fund to be raised - shall be met when applying to raise the fund:
1. Have a clear and legal investment direction;
2. Have specific ways to operate the fund;
3. Conform to the provisions on the types of fund, as prescribed by CSRC;
4. Not be a duplicate of a fund that has been managed by any fund manager to be appointed;
5. The fund contract, prospectus and other draft of legal documents correspond with laws, administrative regulations and the provisions of CSRC;
6. The fund name shows the type of fund and its investment character, and does not have contents that will damage the State's interests, public's interests, cheat or mislead the investors or infringe upon the legal rights and interests of others; and
7. Other conditions as prescribed by CSRC, in accordance with the principle of prudent supervision.
Article 8 A fund manager shall submit application documents, in accordance with the Law of the People's Republic of China on Securities Investment Funds and the provisions of the CSRC, when applying to raise a fund.
If, during the period of application, there is any significant alteration on matters involved in the application documents, the fund manager shall submit renewal documents to CSRC within 5 working days from the date of alteration.
Article 9 CSRC shall accept an application to raise a fund, conduct an examination and issue a decision, in accordance with the Administrative Licensing Law of the People's Republic of China and Article 39 of the Law of the People's Republic of China on Securities Investment Funds.
Article 10 CSRC may organize an expert examination committee to conduct an examination into an application to raise a fund, in accordance with the principle of prudent supervision.
Article 11 The term for raising the fund may not exceed three months from the date of issuance and sale of fund shares.
Article 12 In the event the term for raising the fund expires, and in the event the total amount of fund shares raised meets the requirements of Article 44 of the Law of the People's Republic of China on Securities Investment Funds, and if the following conditions have been fulfilled, a fund manager shall go through the formalities for capital verification and fund archiving, in accordance with regulations:
1.
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