Guiding Opinion on Supervisors of Qualified Foreign Institutional Investors

Updated: 2014-10-08

  Announcement of the China Securities Regulatory Commission

  (No.40 [2008])

  To direct the qualified foreign institutional investors to strengthen their compliance control and regulate the administration of supervisors of qualified foreign institutional investors, this Commission has formulated the Guiding Opinions on the Supervisors of Qualified Foreign Institutional Investors, which are hereby promulgated and shall come into force on October 20, 2008.

  October 17, 2008

  

  Guiding Opinions on the Supervisors of Qualified Foreign Institutional Investors

  Article 1 To direct the qualified foreign institutional investors (hereinafter referred to as the “QFIIs”) to strengthen the compliance control, and regulate the administration of supervisors of qualified foreign institutional investors, these Guiding Opinions are formulated according to the Measures for the Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors (hereinafter referred to as the “Administrative Measures” and other relevant laws and administrative regulations.

  Article 2 The term “supervisors of qualified foreign institutional investors” as mentioned in these Guiding Opinions (hereinafter referred to as the “supervisors”) refers to the personnel who meet the conditions set out in Article 4 of these Guiding Opinions and supervise the operation of the QFIIs in compliance with laws and regulations.

  Article 3 The QFIIs shall appoint personnel who meet the prescribed conditions as the supervisors according to these Guiding Opinions.

  A QFII shall create a compliance cultural atmosphere, improve its compliance control level, and ensure the performance of responsibilities of a supervisor.

  Article 4 A supervisor shall be familiar with the Administrative Measures and the relevant laws and regulations on the Chinese securities market, and have good professional ethics.

  Article 5 A QFII shall fill out the Form of Basic Information on a Supervisor (See Annex) within 10 working days after the appointment of a supervisor, and report it to the CSRC.

  Article 6 If a QFII plans to change a supervisor, it shall report it to the CSRC and propose a successor within 10 working days.

  Article 7 The responsibilities performed by a supervisor include but are not limited to:

  1. Reporting information on the compliance with laws and regulations in the operation of the QFII to the CSRC;

  2. Conducting compliance examination of customers;

  3. Reviewing and signing application documents and product and business reports submitted to the CSRC;

  4. Implementing routine supervision over the transactions of the QFII and attaching great importance to the abnormal transactions of the QFII, in conjunction with the relevant departments of the QFII;

  5. Conducting regular inspections and spot checks of the trading activities of the QFII;

  6. Supervising the disclosure of information on the domestic securities investment made by the QFII; and

  7. Organizing the relevant departments to conduct the QFII training on the relevant laws and regulations.

  Article 8 During the performance of responsibilities, a supervisor shall withdraw from a matter posing a conflict of interest for him, and meanwhile, the QFII shall make relevant arrangements to ensure the effective performance of the supervisory responsibilities.

  Article 9 A QFII shall submit a compliance report for the last year to the CSRC within 30 days after the end of the last year.

  Article 10 Where a supervisor finds any conduct violating a Chinese law or regulation in the investment operation of the QFII, he shall timely stop it, and report it to the CSRC within 10 working days.

  Article 11 A supervisor shall make an objective and fair judgment on the compliance with laws and regulations and compliance risk control in the operation of the QFII.

  Article 12 The CSRC shall conduct regular assessments of the performance of responsibilities by the supervisors and the regulatory compliance by the QFIIs.

  Article 13 The term “working days” as mentioned in these Guiding Opinions refers to the normal trading days of the Shanghai Stock Exchange and the Shenzhen Stock Exchange.

  Article 14 These Guiding Opinions shall come into force on the day determined upon promulgation.

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