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New Administrative Measures for Securities Investor Protection Funds Promulgated – May 2016

On 19 April 2016, the China Securities Regulatory Commission (“CSRC”), the Ministry of Finance (“MOFCOM”) and the People’s Bank of China (“PBC”) jointly issued the New Administrative Measures for the Securities Investor Protection Funds (the “Measures”), effective from 1 June 2016.

The Securities Investor Protection Funds is established in order to handle risks of securities companies, to protect the legitimate interests of investors and to promote the orderly and healthy development of securities markets, as investors are responsible for any loss from their securities investment activities. All securities companies registered in the Chinese customs territory shall contribute to the Fund at a rate of 0.5-5% of their operating turnover. The state-owned China Securities Investors Protection Fund Co., Ltd. is solely responsible for raising, managing and use of the fund.

The board of directors is the decision making body of the state-owned China Securities Investors Protection Fund Co., Ltd. The board of directors is composed of nine directors, four of which are managing directors. The procedure for the formation of the articles of association is specified, and the articles of association shall be drafted by the CSRC together with MOFCOM and the PBC.

For more details, see
http://www.csrc.gov.cn/pub/zjhpublic/G00306201/201604/t20160429_296707.htm.