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Order of the China Securities Regulatory Commission
No.52

The Decision on Revising the Rules for the Setting up of Foreign-shared Securities Companies, which was thought carefully and taken at the 218th chairmen's executive meeting of the China Securities Regulatory Commission on November 29, 2007, is hereby issued and shall put into effect from January 1, 2008.

Chairman: Shang Fulin
December 28, 2007
Decision on Amending the Rules for the Setting up of Foreign-shared Securities Companies
I.
Article 2 shall be revised as: The "foreign-shared securities companies" as mentioned in these Rules concerns:
1.
The securities companies that are jointly contributed and set up by the foreign and domestic shareholders; and
2.
The securities companieswhich are changed from domestic-invested securities companies by foreign shareholders through the acceptance or purchase of shares.
II.
Article 4 shall be revised as: "The name, configuration of organization, registered capital, formation and obligations of the departments of a foreign-shared securities company shall conform to the relevant provisions of the Company Law, the Securities Law and the CSRC."
III.
Article 5 shall be revised as: "The following businesses may be embarked upon by a foreign-shared securities company:
1.
Underwriting and recommendation of stocks (covering RMB common stocks and foreign capital stocks) and bonds (covering government bonds and corporate bonds);
2.
Brokerage of foreign capital stocks;
3.
Brokerage and proprietary trading of bonds (covering government and corporate bonds); and
4.
Other businessesconfirmed by the CSRC."
IV.
Item (1) of Article 6 shall be revised as: "The registered capital complied with the provisions of the Securities Law", Item (3) shall be revised as: "The numbers of persons who have acquired the qualification for securities dealing in accordance with the provisions of the CSRC should be 30 or more, and there are necessary professionals for accounting, legal affairs, and computing", and Item (5) shall be revised as: "Having the business premises that satisfy the demands and the qualified business facilities."
V.
Article 7 shall be revised as: "The following conditions shall be meet foreign shareholders of a foreign-shared securities company :
1.
Their home countries or regions have a healthy legal and regulatory system of securities, and the securities regulatory organizations have concluded the memorandum of comprehending on securities regulation and maintained an effective cooperative relation with the CSRC or the institution received by the CSRC;
2.
They have been legally shaped ed in their home countries or regions, at least one of them is an institution that has the legal financial business qualification; and within three years after the equity participation, they shall not convey their equities in the foreign-shared securities company
3.
They have embarked upon the financial business for five years or more, and haven't been inflicted great punishment by the securities regulatory organization, the administrative or justice department of their respective home countries or regions in last three years;
4.
All of their financial indicators are in accord with the legal provisions of their respective home countries or regions and the requirements of their respective securities regulatory organizations in last three years;
5.
They have a healthy internal control system;
6.
They have a good fame and business performance; and
7.
Other prudential conditions as offered for by the CSRC."
VI.
Paragraph 2 of Article 8 shall be revised as: "One at least shall be a domestic-funded securities company among the domestic shareholders of a foreign-shared securities company,. But the foreign-shared securities company altered from a domestic-funded securities company shall be an exclusion."
VII.
Paragraph 1 of Article 10 shall be revised as: "The proportion of the shares held by foreign shareholders or the equities owned by foreign shareholders accumulatively (both directly held and indirectly controlled) in a foreign-shared securities company shall not surpassed one third of the total access."
VIII.
Article 11 shall be revised as: "The qualification requirements as given for by the CSRC shall be owned by the directors, supervisors and senior managers of a foreign-shared securities company. the."
IX.
Item (3) of Article 12 shall be revised as: "Explanatory documents on the ability of main senior managers to be appointed by the foreign-shared securities company", Item (4) shall be revised as: "Copies of business licenses, registration certificates, or securities business qualification certificates of the shareholders", Item (5) shall be revised as: "Audited financial statements of the foreign and domestic shareholders for the three years before the application", Item (6) shall be revised as: "Whether these shareholders have met the conditions as provided for in Items (2) up to (4) of Article 7 of these Rules, explanatory letters promulgated by the securities regulatory organizations of the home countries or regions of the foreign shareholders or the foreign institutions accepted by the CSRC ", Article (7) shall be revised as: "Legal opinions promulgated by the law firms within the territory of China", and Item (7) of Article 12 as Item (8) shall be followed: "Other documents demanded by the CSRC."
X.
Articles 13 and 20 shall be respectively revised as: "The CSRC shall, in accordance with the relevant laws, administrative regulations and these Rules, check the application documents as provided for in the previous article, make the decision on whether to approve the application within the specified time limit, and inform the applicant in written form. For those not approved, reasons shall be defined in written form."
XI.
Article 14 shall be revised as: "The shareholders shall contribute the capital in full amount or offer the cooperative conditions coincided, elect directors and supervisors, appoint senior officers, and have application in the administration for industry and commerce for registration of establishment and obtain the business license within six months from the day on which the CSRC promulgated the document of approval."
XII.
Item (4) of Article 15 shall be revised as: "Name list of the directors, supervisors, senior officers and principal business operators, and the copies of their post holding qualification certificates and their securities business qualification certificates", Item (6) shall be revised as: "Explanatory documents about the business premises and business facilities", and Item (6) of Article 15 as Item (7) shall add an item r: "Other documents required by the CSRC."
XIII.
Item (5) of Article 19 shall be revised as: "Name list and resumes of the persons appointed by the foreign investors to take position in that securities company, and their corresponding business qualification certificates and position qualification certificates", Item (6) shall be revised as: "Copies of business licenses or registration certificates and securities business qualification certificates of the foreign shareholders", Item (7) shall be revised as: "Audited financial statements of the foreign shareholders for the three years before the application", Item (8) shall be revised as: "Whether these shareholders have met the conditions as provided for in Items (2) up to (4) of Article 7 of these Rules, explanatory letters promulgated by the securities regulatory organizations of the home countries or regions of the foreign shareholders or the foreign institutions accepted by the CSRC on", Item (10) shall be revised as: "Legal opinions promulgated by the law firms within the territory of China", and an item shall be added after Item (10) of Article 15 as Item (11): "Other documents required by the CSRC."
XIV.
Item (6) of Article 22 shall be revised as: "Legal opinions and verification report on the aforesaid business settlements promulgated by the law firm resided in the territory of China and the accounting firm qualified for securities-related businesses", and an item shall be added after Item (6) of Article 22 as Item (7): "Other documents required by the CSRC."
XV.
An article shall be added after Article 24 as Article 25: "Foreign investors may hold the shares of a listed domestic-funded securities company through buying securities from the stock exchanges or setting up a strategically cooperative relation with the listed domestic-funded securities company upon acquiring an approval from the CSRC; the approved business scope of that listed domestic-funded securities company shall not be altered. With the premise which the controlling shareholder is a domestic one, the listed domestic-funded securities company shall not be limited by the proportion that at least one domestic shareholder holds one third or more of the total shares.

The investor shall conform to the conditions provided for in Article 7 of these Rules, and comply with Article 129 of the Securities Law, if a foreign investor holds 5% or more of the shares of a listed domestic-funded securities company by buying securities from the stock exchanges or holding shares jointly with others by entering agreements or any other arrangements,.

The proportion of the shares of a listed domestic-funded securities company held (including both directly held and indirectly controlled) by a single foreign investor shall not surpass 20%; and the proportion of the shares of a listed domestic-funded securities company held (converting both directly held and indirectly controlled) by all the foreign investors shall not surpass 25%."

XVI.
The original Article 25 shall be altered into Article 26, and Paragraph 1 shall be revised as: "In accordance with these Rules shall be in Chinese, the application documents submitted to the CSRC and the materials reported to the CSRC. The Chinese versions that are consistent with the original documents shall be attached, if the documents and materials of the foreign shareholders and those promulgated by the securities regulatory organizations of their home countries or regions or the foreign institutions received by the CSRC are in foreign languages."

This Decision shall put into effect as of January 1, 2008.

In accordance with this Decision, the Rules for the Setting up of Foreign-share Securities Companies shall be correspondingly revised , and be re-promulgated.

China Securities Regulatory Commission
December 28, 2007