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Standing Committee of the National People’s Congress
Order of the President of the People’s Republic of China
No.9
The Law of the People’s Republic of China on Securities Investment Fund, which was adopted at the fifth meeting of the Standing Committee
of the Tenth National People’s Congress on October 28, 2003, is hereby promulgated and shall take effect as of June 1, 2004.
Hu Jintao, the President of the People’s Republic of China
October 28, 2003
Law of the People’s Republic of China on Securities Investment Fund ContentsChapter I General Provisions
Chapter II Fund Managers
Chapter III Fund Trustees
Chapter IV Raising of Fund
Chapter V Trading of Fund Shares
Chapter VI Subscription to and Redemption of Fund Shares
Chapter VII Fund Operations and Information Disclosure
Chapter VIII Alteration and Termination of the Fund Contract and Liquidation of Fund Property
Chapter IX Rights of the Fund Share Holders and the Exercise thereof
Chapter X Supervision and Administration
Chapter XI Legal LiabilitiesChapter XII Supplementary Provisions
Chapter I General Provisions
Article 1
The present Law is enacted with a view to regulating the activities concerning securities investment fund, to protect the legitimate
rights and interests of the investors and other relevant parties, and to promote the healthy development of securities investment
fund and securities market.
Article 2
The present Law shall apply to the securities investment activities conducted through the method of portfolio and through public offering
of fund shares to raise securities investment fund (hereinafter referred to as fund), which is managed by fund managers and entrusted
to fund trustees for the benefits of the fund share holders; the matters not covered by the present Law shall be governed by the
Trust Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, and other relevant laws and administrative
regulations.
Article 3
The rights and obligations of the fund managers, fund trustees and fund share holders shall be stipulated in the fund contracts in
accordance with the present Law.
The fund managers and fund trustees shall perform the duties of trusteeship in accordance with the present Law and the fund contract.
A holder of fund shares shall enjoy the benefits and bear the risks to the extent of the fund shares it holds.
Article 4
Those engaging in the activities involving securities investment fund shall adhere to the principles of free will, fairness and good
faith, and may not impair the state and public interests.
Article 5
A fund contract shall stipulate the operation method of the fund. A fund can be operated in a closed, open, or any other way.
A fund operated in a closed way (hereinafter referred to as closed fund) refers to the fund of which the ratified total fund shares
remains fixed during the valid term of the fund contract and of which the fund shares can be traded on the securities exchanges established
according to law, but can not be redeemed by the fund share holders through application.
A fund operated in an open way (hereinafter referred to as open fund) refers to the fund of which the total fund shares are unfixed
and of which the fund shares may be subscribed to or redeemed at the time and place stipulated in the fund contract.
The methods of offering, trading, subscription and redemption of the fund shares of other funds operated through other methods shall
be separately formulated by the State Council.
Article 6
Fund property shall be independent from the property owned by the fund manager and fund trustee. The fund manager and fund trustee
may not attribute any of the fund property into their own property.
The property and benefits obtained by the fund manager and fund trustee as a result of the management, utilization or any other use
of the fund shall be included into the fund property.
Where the fund manager or fund trustee goes into liquidation as a result of dissolution, cancellation, or declared bankruptcy according
to law, the fund property shall not be taken as their liquidation property.
Article 7
The credit rights of fund property may not be set off against the debts of the property owned by the fund manager and fund trustee;
and the credit rights and debts of different fund properties may not be set off against each other.
Article 8
The debts not arising out of the fund property may not be enforced against such fund property.
Article 9
The fund manager and fund trustee shall, in managing and utilizing the fund property, devote themselves to their duties and perform
the obligations of good faith, prudence and diligence.
Fund practitioners shall have obtained the qualifications for practice relating to funds, and shall abide by the laws, administrative
regulations, professional ethics, and code of conduct.
Article 10
Fund managers, fund trustees and fund share offering institutions may establish trade associations to strengthen self-regulation,
coordinate trade relationship, provide trade services, and promote the development of the trade.
Article 11
The securities regulatory department under the State Council shall supervise and regulate the activities concerning securities investment
fund according to law.
Chapter II Fund Managers
Article 12
Fund managers shall be assumed by the fund management companies established according to law.
To be a fund manager, the ratification of the securities regulatory department under the State Council is required.
Article 13
For establishment of a fund management company, the following conditions shall be satisfied and the approval of the securities regulatory
department under the State Council is required:
1)
Having the articles of association which are in conformity with the present Law and the Company Law of the People’s Republic of China;
2)
Having a registered capital of no less than 100 million RMB and all of the capital being paid-in monetary capital;
3)
Principal shareholders having good business performance and public reputation in the securities business, securities investment consultation,
trust assets management or other financial assets management, having no record of violation of law within the last 3 years, and having
a registered capital of no less than 300 million RMB;
4)
The number of persons with fund practice qualification reaching the statutory requirement;
5)
Having business sites, security facilities and other facilities relating to fund management business that comply with the requirements;
6)
Having sound internal auditing and monitoring system and risk control system;
7)
Other conditions provided for by laws and administrative regulations and those provided for by the securities regulatory department
under the State Council and approved by the State Council.
Article 14
The securities regulatory department under the State Council shall, within 6 months from accepting the application for establishment
of a fund management company, make the examination pursuant to the conditions specified in Article 13 hereof and the principle of
prudent regulation, make the decision whether to grant the approval or not, and notify the applicant, and shall explain the reasons
if no approval is granted.
Where a fund management company is to establish any branch, modify its articles of association, or alter any other major matters,
it shall apply to the securities regulatory department under the State Council for approval. The securities regulatory department
under the State Council shall, within 60 days from the day of accepting the application, make the decision whether to grant approval
or not, and notify the applicant, and shall explain the reasons if no approval is granted.
Article 15
None of the following personnel may be a securities practitioner of a fund manager:
1)
Those being given criminal penalties for the crime of bribery and embezzlement, malfeasance, or encroachment of property, or the crime
of undermining the socialist market economic order;
2)
The directors, supervisors, factory directors, mangers and other senior executives who are personally liable for the bankruptcy and
liquidation due to poor management or the revocation of business license due to violation of law of the companies and enterprises
in which they hold office, provided that it has been less than 5 years since the day of the end of the bankruptcy liquidation or
of the revocation of business license;
3)
Those with large amount of outstanding personal debts;
4)
The practitioners of fund managers, fund trustees, securities exchanges, securities companies, securities registration and settlement
institutions, futures exchanges, futures brokerage companies and other institutions, and the state functionaries that have been dismissed
due to violations of law;
5)
The lawyers, certified accountants, practitioners of assets evaluation institutions and assets verification institutions, and practitioners
of investment consultation institutions whose practice licenses have been revoked or who have been disqualified due to violations
of law;
6)
Other personnel that may not engage in the fund business as provided for by any law or administrative regulation.
Article 16
The managers and other senior managerial personnel of a fund manager shall be familiar with the laws and administrative regulations
concerning securities investment, have the qualification for fund practice, and have worked in the field relevant to the position
they hold for more than 3 years.
Article 17
The selection or change of the managers and other senior managerial personnel of a fund manager shall be submitted to the securities
regulatory department under the State Council for examination in accordance with the conditions for holding such office provided
for by the present Law and other relevant laws and administrative regulations.
Article 18
The directors, supervisors, managers and other practitioners of a fund manager may not hold any position in the fund trustee or other
fund managers, and may not conduct any securities transactions and other activities that impair the fund property and the interests
of the fund share holders.
Article 19
A fund manager shall perform the following duties:
1)
Raising the fund according to law and handling or entrusting other institutions recognized by the securities regulatory department
under the State Council to handle the offering, subscription, redemption and registration of fund shares;
2)
Making fund records;
3)
Applying separate management and separate account books to different fund properties it manages to make securities investment;
4)
Determining the scheme on distribution of fund proceeds according to the stipulations of the fund contract and distributing profits
to the holders of fund shares in good time;
5)
Making fund accounting and preparing the fund financial accounting report;
6)
Preparing midterm and annual fund reports;
7)
Calculating and publicizing the net value of the fund assets and determining the prices for subscription and redemption of the fund
shares;
8)
Handling the relevant information disclosures related to the management of the fund property;
9)
Convening the fund share holders’ meeting;
10)
Keeping the records, account books, statements and other relevant materials of the fund property management;
11)
Exercising litigation rights or carrying out other legal action in the name of the fund manager for the interests of the fund share
holders;
12)
Other duties provided for by the securities regulatory department under the State Council.
Article 20
A fund manager may not conduct any of the following acts:
1)
Mixing its own property or the property of others with the fund property to make securities investment;
2)
Treating different fund properties it manages unfairly;
3)
Seeking benefits for any third party other than the fund share holders by using the fund property;
4)
Unlawfully promising the fund share holders to make benefits or bear losses;
5)
Any other acts prohibited by the securities regulatory department under the State Council in accordance with the relevant provisions
of the laws and administrative regulations.
Article 21
With respect to a fund manager under any of the following circumstances, the securities regulatory department under the State Council
shall, according to its powers, order that fund manager to make rectification or disqualify it as a fund manager:
1)
Having committed any serious violations of laws or rules;
2)
No longer meeting the conditions provided for in Article 13 hereof;
3)
Other circumstances provided for by laws and administrative regulations.
Article 22
Under any of the following circumstances, the duties of a fund manager shall terminate:
1)
Being disqualified for fund management;
2)
Being dismissed by the fund share holders’ meeting;
3)
Being dissolved, or cancelled, or declared bankruptcy according to law;
4)
Other circumstances stipulated in the fund contract.
Article 23
Where the duties of a fund manager terminate, the fund share holders’ meeting shall appoint a new fund manager within 6 months; before
the appointment of the new fund manager, the securities regulatory department under the State Council shall designate a temporary
fund manager.
A fund manager shall, upon termination of its duties, keep in good conditions the materials of fund management and process the formalities
for handover of the business in good time, the new fund manger or temporary fund manager shall take over the business in good time.
Article 24
A fund manager shall, upon termination of its duties, retain an accounting firm to audit the fund property, publicize the auditing
results and put on record with the securities regulatory department under the State Council.
Chapter III Fund Trustees
Article 25
Fund trustee shall be assumed by a commercial bank which was established according to law and has obtained the qualification for fund
trust.
Article 26
To apply for the qualification for fund trust, a commercial bank shall satisfy the following conditions and be ratified by the securities
regulatory department and the banking regulatory department under the State Council:
1)
Its net assets and capital adequacy complying with the relevant provisions;
2)
Having set up a specialized department of fund trust;
3)
The number of the full-time personnel with fund practice qualification reaching the statutory requirement;
4)
Having the conditions for safe keeping of the fund property;
5)
Having safe and high efficient clearing and settlement system;
6)
Having business sites, security facilities and other facilities relating to fund trust business that meet the requirement;
7)
Having sound internal auditing and monitoring system and risk control system;
8)
Satisfying other conditions provided for by laws and administrative regulations and the conditions provided for by the securities
and banking regulatory departments under the State Council and approved by the State Council.
Article 27
Articles 15 and 18 shall apply to the practitioners of the specialized fund trust department of a fund trustee.
Articles 16 and 17 shall apply to the managers and other senior managerial personnel of the specialized fund trust department of a
fund trustee.
Article 28
A fund trustee and a fund manager may not be the same party, and may not make capital contribution to or hold the shares of each other.
Article 29
A fund trustee shall perform the following duties:
1)
Keeping the fund property safely;
2)
Opening capital accounts and securities accounts of the fund property pursuant to the provisions;
3)
Setting up separate accounts for different fund properties under its trust and ensuring the completeness and independence of the fund
properties;
4)
Keeping the records, account books, statements and other relevant materials of the fund trust business;
5)
Handling the clearing and settlement at the investment orders of the fund manager pursuant to the stipulations of the fund contract;
6)
Handling the information disclosures relating to the fund trust business activities;
7)
Presenting opinions on the fund financial accounting report and the midterm and annual fund reports;
8)
Checking and examining the net value of the fund assets and the subscription and redemption prices of the fund shares calculated by
the fund manager;
9)
Convening the fund share holders’ meeting pursuant to the provisions;
10)
Supervising the investment operations of the fund manager pursuant to the provisions;
11)
Other duties provided for by the securities regulatory department under the State Council.
Article 30
Where a fund trustee finds out that any investment order of a fund manager is in violation of any of the laws, administrative regulations
or other relevant provisions, or the stipulations of the fund contract, it shall refuse to execute such order, notify the fund manager
immediately and report to the securities regulatory department under the State Council in good time.
Where a fund trustee finds out that any investment order of a fund manager which has taken effect according to the transaction procedures
is in violation of the laws, administrative regulations or other relevant provisions, or the stipulations of the fund contract, it
shall notify the fund manager immediately and report to the securities regulatory department under the State Council in good time.
Article 31
The provisions of Article 20 hereof shall apply to fund trustees.
Article 32
With respect to a fund trustee under any of the following circumstances, the securities and banking regulatory departments under the
State Council shall, according to their powers, order it to make rectification or disqualify it as a fund trustee:
1)
Having committed any serious violation of laws and rules;
2)
No longer meeting the conditions provided for in Article 26 hereof;
3)
Other circumstances provided for by laws and administrative regulations.
Article 33
The duties of a fund trustee shall be terminated under any of the following circumstances:
1)
Being disqualified as a fund trustee;
2)
Being dismissed by the fund share holders’ meeting;
3)
Being dissolved, cancelled, or declared bankruptcy according to law; or
4)
Other circumstances stipulated in the fund contract.
Article 34
Upon termination of the duties of a fund trustee, the fund share holders’ meeting shall appoint a new fund trustee within 6 months;
and before the appointment of the new fund trustee, the securities regulatory department under the State Council shall designate
a temporary fund trustee.
A fund trustee shall, upon termination of its duties, keep in good conditions the fund property and fund trust business materials
and process the formalities for handover of the property and business in good time, the new fund trustee or temporary fund trustee
shall take over the property and business in good time.
Article 35
A fund trustee shall, upon termination of its duties, retain an accounting firm to audit its fund property pursuant to the provisions,
publicize the auditing results, and report to the securities regulatory department under the State Council for archival purposes
at the same time.
Chapter IV Raising of Fund
Article 36
A fund manager shall, when offering fund shares and raising fund pursuant hereto, submit the following documents to and get ratification
from the securities regulatory department under the State Council:
1)
An application report;
2)
A draft fund contract;
3)
A draft fund trust agreement;
4)
A draft prospectus;
5)
Qualification certificates of the fund manager and fund trustee;
6)
Financial accounting reports, which have been audited by accounting firms, of the fund managers and fund trustees of the last 3 years
or since their establishment;
7)
Letters of legal opinion issued by law firms; and
8)
Other documents to be submitted as provided for by the securities regulatory department under the State Council.
Article 37
A fund contract shall include the following contents:
1)
Purpose for raising the fund and the name of the fund;
2)
Names and domiciles of the fund manager and fund trustee;
3)
Method of fund operation;
4)
Total fund shares and the valid term of the fund contract in the case of a closed fund, or the minimum total shares to be raised in
the case of an open fund;
5)
Principles for determining the date of offering of fund shares, the prices and expenses;
6)
Rights and obligations of the fund share holders, fund manager and fund trustee;
7)
Procedures and rules for the convening of, and deliberation and voting on the fund share holders’ meeting;
8)
The procedures, time and place of the offering, trading, subscription and redemption of fund shares, the calculation method of expenses,
and the time and method of payment of redemption price;
9)
Principles for the distribution of fund proceeds and the method of execution of such principles;
10)
Methods of drawing and paying and proportions of the administrative fees and trust fees as the remuneration of the fund manager and
fund trustee;
11)
Methods of drawing and paying other expenses relating to the management and utilization of fund property;
12)
Directions of and restrictions on investment of fund property;
13)
Calculation method and publicizing method of the net value the fund assets;
14)
Methods of handling where the fund raised fails to meet the statutory requirements;
15)
Causes and procedures for avoidance and termination of the fund contract, as well as the liquidation method of the fund property;
16)
Dispute settlement methods;
17)
Other matters agreed upon by the parties.
Article 38
The prospectus of a fund shall include the following contents:
1)
Name of the ratification document for the application for fund raising and the date of ratification;
2)
Basic information of the fund manager and fund trustee;
3)
Summary of the fund contract and fund trust agreement;
4)
Date of offering, prices, expenses, and period of offering of the fund shares;
5)
Method of offering the fund shares and the names of the offering institution and registration institution;
6)
Names and domiciles of the law firms issuing letters of legal opinion and the accounting firms auditing the fund property;
7)
Methods of drawing and paying and proportions of the remuneration of the fund manager and fund trustee and other relevant expenses;
8)
Contents of risk warning; and
9)
Other contents provided for by the securities regulatory department under the State Council.
Article 39
The securities regulatory department under the State Council shall, within 6 months from the day of accepting an application for fund
raising, make the examination pursuant to the laws and administrative regulations, the provisions of the securities regulatory department
under the State Council, and the principle of prudence, make the decision to grant ratification or not and notify the applicant;
and shall explain the reasons if ratification is not granted.
Article 40
Fund shares may be offered only after the application for fund raising has been ratified.
Article 41
The offering of fund shares shall be the responsibility of the fund manager; and the fund manager may entrust another agency recognized
by the securities regulatory department under the State Council to handle the offering on its behalf.
Article 42
A fund manager shall publicize the prospectus, fund contract and other relevant documents 3 days prior to the offering of the fund
shares.
The documents specified in the preceding paragraph shall be true, accurate and complete.
Publicity and promotion of the fund raising shall be in conformity with the relevant laws and administrative regulations and shall
not involve any acts specified in Article 64 hereof.
Article 43
A fund manager shall start raising fund within 6 months from the day of receiving the ratification document. If the fund raising starts
after that 6 months and no substantial alterations have happened to the ratified matters, the fund manager shall report to the securities
regulatory department under the State Council for archival purposes; and if there is any substantial alteration, it shall file a
new application with the securities regulatory department under the State Council.
The fund raising shall be finished within the fund raising period ratified by the securities regulatory department under the State
Council. The fund raising period shall be calculated starting from the day of offering the fund shares.
Article 44
Upon expiration of the fund raising period, in the case of a closed fund, if the total amount of fund shares raised reaches 80% or
more of the ratified scale, or in the case of an open fund, if the total amount of fund shares raised reaches the minimum amount
ratified, and if the number of the fund share holders meets the provisions of the securities regulatory department under the State
Council, the fund manager shall, within 10 days from the expiration of the fund raising period, retain a statutory capital verification
agency to make capital verification, and shall, within 10 days from receiving the capital verification report, submit the report
to the securities regulatory department under the State Council, put on record the fund and make a public announcement.
Article 45
The capital raised during the fund raising period shall be deposited in a special account, and nobody may use such capital before
the end of the fund raising.
Article 46
The fund contract is concluded when an investor pays for the fund shares it subscribes to; and the fund contract takes effect after
the fund manager put on record the fund with the securities regulatory department under the State Council pursuant to Article 44
hereof.
Upon the expiration of the fund raising period, if the conditions specified in Article 44 are not satisfied, the fund manager shall
assume the following liabilities:
1)
Covering with its own property the debts and expenses incurred as a result of the fund raising;
2)
Returning the money that the investors have paid, plus the interest accruing thereon at the current deposit rate, within 30 days after
the expiration of the fund raising period.
Chapter V Trading of Fund Shares
Article 47
Fund shares of a closed fund may be traded on the securities exchange upon application of the fund manager and ratification of the
securities regulatory department under the State Council.
The securities regulatory department under the State Council may authorize the securities exchange to ratify the trading of fund shares
on the market pursuant to the statutory conditions and procedures.
Article 48
The following conditions shall be satisfied for the listing and trading of fund shares:
1)
The raising of fund complies with the provisions hereof;
2)
The valid term of the fund contract is 5 years or more;
3)
The capital raised is no less than 200 million RMB;
4)
There are no less than 1,000 fund share holders;
5)
Other conditions set forth in the listing rules of fund shares.
Article 49
The listing and trading rules of fund shares shall be formulated by the securities exchange and be submitted to the securities regulatory
department under the State Council for ratification.
Article 50
After the listing of fund shares, if any of the following circumstances occurs, the securities exchange shall terminate its listing
and report to the securities regulatory department under the State Council for archival purposes:
1)
The conditions for listing prescribed in Article 48 hereof are not long met;
2)
The fund contract expires;
3)
The fund share holders’ meeting decides to terminate the listing prior to the due date;
4)
Other circumstances under which the listing shall be terminated as stipulated in the fund contract or provided for in the listing
rules of fund shares.
Chapter VI Subscription and Redemption of Fund Shares
Article 51
The subscription, redemption and registration of an open fund shall be handled by the fund manager; and the fund manager may entrust
another agency recognized by the securities regulatory department under the State Council to handle the matters on its behalf.
Article 52
A fund manager shall handle the subscription and redemption of fund shares every workday; if there are otherwise stipulations in the
fund contract, such stipulations shall be observed.
Article 53
A fund manager shall pay for the redemption on time, except under any of the following circumst
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20041110
State Administration of Radio, Film and Television
Order of the State Administration of Radio, Film and Television
No. 20
The “Interim Provisions on the Access of Operational Qualifications for Movie Production, Distribution and Projection”, which were
passed at the administration’s executive meeting on September 28, 2003, are hereby issued, and shall go into effect on December 1,
2003.
Xu Guangchun, Director General
October 29, 2003
Interim Provisions on the Access of Operational Qualifications for Movie Production, Distribution and Projection
Article 1
The present Provisions are formulated in order to stimulate the non-government sectors to facilitate the development of movie industry,
cultivate market subjects, govern market access, increase the overall strength and competitiveness of the movie industry, promote
the boom of socialist movie industry, and meet the people’s demands on their spiritual and cultural lives.
Article 2
The present provisions shall be applicable to the administration of qualification access for domestic state-owned and non-state-owned
enterprises to operate movie production, distribution and projection and for wholly foreign-owned companies to take part in the operation
of movie production and projection.
Article 3
The domestic state-owned and non-state-owned (not including wholly foreign-owned) entities are stimulated to establish movie production
companies through joint venture or cooperation with the existing state-owned movie production entities, or to independently establish
production companies. The overseas investors are permitted to establish movie production companies by means of joint venture or cooperation
by having share of the existing domestic state-owned movie production entities.
(1)
The application requirements for establishing a joint venture or cooperative (not including wholly foreign-owned) movie production
company are as follows:
1).
The registered capital shall be not less than 1 million Yuan; and
2).
Such documents as the application letter, the contract, the articles of association and the photocopy of the business license of each
party to the cooperation, which was issued by the administration for industry and commerce, must be submitted.
(2)
The application requirements for establishing a Chinese-foreign joint venture or cooperative movie production company are as follows:
1).
The registered capital shall be not less than 5 million Yuan;
2).
The share of overseas investment in the registered capital shall not exceed 49%; and
3).
Such documents as the application letter, the contract, the articles of association and the photocopy of the business license of each
party to the cooperation, which was issued by the administration for industry and commerce, must be submitted. (The foreign party
may offer the financial documents of proof issued by the accounting firm).
(3)
The application requirements for a domestic state-owned or a non-state-owned (not including wholly foreign-owned) movie and television
culture entity that has not got the “Permit for Movie Production” to independently found a movie production company are as follows:
1).
For the first time it produces a film, it shall apply to obtain the “Permit for Movie Production (for one film only)”. And it must,
at the time of application, submit to the State Administration of Radio, Film and Television a photocopy of the business license
issued by the administration for industry and commerce, a proof on its capital, the main idea of the film to be produced and other
relevant documents. It shall carry out the relevant formalities in the local administration for industry and commerce after it has
obtained the “Permit for Movie Production (for one film only)”;
2).
It has, by way of the “Permit for Movie Production (for one film only)”, invested to produce two or more films;
3).
Its registered capital shall be no less than 1 million Yuan; and
4).
It must file such documents as the application letter, the photocopy of the business license issued by the administration for industry
and commerce, the “Permit for Movie Production (for one film only)” and the “Permit for Public Projection of Films” for the two films
it has invested to produce, and other relevant documents.
(4)
To any one that meets the requirements stated in Items (1), (2), and (3), the State Administration of Radio, Film and Television shall
issue the “Permit for Movie Production”.
The applicant shall carry the approval document and the “Permit for Movie Production” issued by the State Administration of Radio,
Film and Television to carry out the relevant formalities in the local administration for industry and commerce at its/his locality.
Article 4
In the light of the “Regulation on the Administration of Movies”, a movie production company that has obtained the “Permit for Movie
Production” in accordance with Article 3 of the present provisions may have the same rights and obligations as those enjoyed by
the existing state-owned movie production entities.
Article 5
The state-owned and non-state-owned (not including wholly foreign-owned) entities are encouraged to control the shares or to independently
found film technology companies, improve the basic facilities and technical equipment for movie production and projection. While
the wholly foreign-owned company are permitted to operate such business by having share, or to operate such business in the approved
provinces and cities by controlling the shares. The application requirements are as follows:
(1)
The registered capital shall be no less than 5 million Yuan;
(2)
Such documents as the application letter, the contract, the articles of association, and the photocopy of the business license of
each party to the cooperation issued by the administration for industry and commerce, must be submitted.
(3)
If the applicant meets the requirements mentioned above, it shall, after approval by the State Administration of Radio, Film and Television,
carry the approval documents issued by the State Administration of Radio, Film and Television to the relevant department of the state
to carry out the relevant approval formalities.
Article 6
Whichever entity engaged in the foreign-involved business as prescribed in Articles 3 and 5 shall carry out the relevant formalities
in the light of the relevant laws and regulations of the state.
Article 7
The state-owned and non-state-owned movie and television culture entities are encouraged to found companies that exclusively operate
the distribution of domestically produced films. The application requirements and procedures are as follows:
(1)
The registered capital shall be no less than 500,000 Yuan;
(2)
The applicant has been entrusted by a movie production entity to represent represented the distribution of two movies before or has
been entrusted by a TV play production entity to distribute two TV plays;
(3)
The applicant must offer such documents as the application letter, the photocopy of the business license issued by the administration
for industry and commerce, the proof on having been entrusted to represent the distribution of movies and TVs, and other relevant
documents; and
(4)
If the applicant meets the requirements mentioned above and applies to the State Administration of Radio, Film and Television to establish
a company exclusively running the distribution of domestically produced films, the “Operating Permit for Movie Distribution” shall
be issued to him by the State Administration of Radio, Film and Television, which allows the applicant to distribute domestically
produced films throughout the country. If the applicant applies to the local administrative department of movie at the provincial
level to found a company exclusively operating the distribution of domestically produced films, the “Operating Permit for Movie Distribution”
of the province shall be issued by the said local administrative department of movie, which allows the exclusive operation of domestically
produced films. The applicant shall carry the “Operating Permit for Movie Distribution” of domestically produced films to the local
administration for industry and commerce at its locality to carry out the relevant formalities.
Article 8
In the light of the “Regulation on the Administration of Movies”, a company that has obtained, in accordance with Article 7 of the
present provisions, the “Operating Permit for Movie Distribution” for exclusively running domestically produced films may have the
equal rights and obligations to those enjoyed by an existing movie distribution company at the provincial level.
Article 9
In the light of the “Measures for the Annual Assessment of the Distribution and Projection of Domestically Produced Films”, the State
Administration of Radio, Film and Television shall, make the annual evaluation on the companies that have got the “Operating Permit
for Movie Distribution”.
Article 10
The movie circuit companies may be permitted to integrate either in an intense type or a loose type. They are encouraged to take the
trans-provincial circuits as the basis for the reunification pursuant to the principle of separate management, but merge of the circuits
on the basis of administrative regions are forbidden. The integration of circuits shall be submitted to the State Administration
of Radio, Film and Television for approval.
(1)
The domestic state-owned and non-state-owned movie and television culture (excluding wholly foreign-owned) entities are encouraged
to, by having or controlling share, invest in the existing circuit companies or independently established circuit companies.
1).
When an entity invests in an existing circuit company by having share (in a proportion below 49%), its investment must be no less
than 30 million Yuan within three years, which shall be used to the construction and reform of the movie theaters in this circuit.
If an entity invests in an existing circuit company by controlling share, the shareholding entity must invest no less than 40 million
Yuan within three years, which shall be used to the construction and reform of the movie theaters in this circuit.
2).
In the case that an entity independently establishes an intra-provincial or national movie circuit company, the investment must be
no less than 50 million Yuan within three years, which shall be used to the construction and reform of the movie theaters in this
circuit.
3).
The relevant formalities shall be carried out for the establishment of a circuit company in the light of the provisions of the State
Administration of Radio, Film and Television on establishment of movie circuits. The establishment of an intra-provincial circuit
company shall be examined and approved by the administrative department of movie of the people’s government of the province, autonomous
region or municipality directly under the jurisdiction of the Central Government where the establisher is located, and be reported
to the State Administration of Radio, Film and Television for record. The establishment of a trans-provincial circuit company shall
be examined and approved by the State Administration of Radio, Film and Television.
(2)
In the light of the “Regulation on the Administration of Movies”, the state-owned and non-state-owned entities and individuals are
encouraged to, operate movie distribution and projection in the countryside throughout the country by various means, and also operate
movie projection in schools and communities in cities by various means.
(3)
The state-owned and non-state-owned entities and individuals are encouraged to invest to build and reform movie theaters. The running
of the movie projection business is requested to submit to the local administrative department of movie at the county level or above
for approval, and the relevant formalities shall be carried out in the local administration for industry and commerce.
Article 11
The import of films shall be exclusively operated by the film import enterprises which have got approvals from by the State Administration
of Radio, Film and Television. The distribution of imported films shall be undertaken by the distribution companies approved by the
State Administration of Radio, Film and Television, which enjoy the right to distribute imported films nationwide.
Article 12
The film-producing entities are encouraged to, through various channels, export domestically-produced films which have obtained the
“Permit for Public Projection of Films”. The movie production entities are encouraged to participate in foreign film festivals (exhibitions).
And the films in exhibition must be those that have obtained the “Permit for Public Projection of Films”, and shall be reported to
the State Administration of Radio, Film and Television for record in advance.
The report with the plan to hold a Chinese-foreign film exhibition or an international movie festival (exhibition) within the territory
of China must be submitted to the State Administration of Radio, Film and Television for approval.
Article 13
There is an every-two-year inspection system that shall be applicable to the “Permit for Movie Production” and the “Operating Permit
for Movie Distribution” awarded by the State Administration of Radio, Film and Television. The local administrative department of
movie shall, within the scope of its administrative authority, apply an annual inspection system to the “Operating Permit for Movie
Distribution” and the “Operating Permit for Movie Projection” it has issued.
Article 14
Any matter not specified in the present provisions shall be dealt with in the light of the “Regulation on the Administration of Movies”
and the relevant provisions.
Article 15
The present provisions shall go into effect on December 1, 2003.
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