Decree of the China Banking Regulatory Commission
No.2 The Measures for Administering Trust Companies have been adopted at the 55th chairmen’s meeting on December 28, 2006. They are hereby January 23, 2007 Measures for Administering Trust Companies Article 1 In accordance with the Trust Law of the People’s Republic of China, the Banking Supervision Law of the People’s Republic of China Article 2 The term “trust company” as mentioned in the present Measures means the financial institutions set up according to the Company Law The term “trust business” as mentioned in the present Measures means the trust companies’ business operations that the trust company Article 3 The trust property may not belong to the trust company’s inherent property, or the trust company’s liabilities for the beneficiaries. Article 4 A trust company shall, when engaging in trust activities, comply with laws and regulations and the stipulations in trust documents, Article 5 China Banking Regulatory Commission shall take charge of supervising and administering trust companies and business activities thereof. Chapter II Establishment, Alteration and Termination of Trust Institutions Article 6 When establishing a trust company, the form of a limited liability company or a company limited by shares shall be adopted. Article 7 When establishing a trust company, the approval of China Banking Regulatory Commission shall be obtained and a financial license No entity or individual may conduct any trust business and no business entity may use the term “trust company” in its corporate name Article 8 As regards setting up a trust company, the following conditions shall be met: (1) possessing the articles of association, which comply with the provisions of the Company Law of the People’s Republic of China and (2) possessing shareholders, which are qualified for purchasing shares as provisioned by China Banking Regulatory Commission; (3) possessing the minimum registered capital as provisioned by the present Measures; (4) possessing directors, senior mangers and trust employees suitable for their business, who are qualified for holding corresponding (5) possessing a sound organizational structure, instructions for operating trust business and a system of risk control; (6) possessing a business place as required, safety measures and other business-related facilities; (7) other conditions as prescribed by China Banking Regulatory Commission. Article 9 China Banking Regulatory Commission shall examine an application for establishing trust company in accordance with the relevant laws Article 10 The minimum registered capital of a trust company shall be 300 million Yuan or the equivalent convertible currency, and the registered When applying for conducting such businesses as enterprise annuity fund, securities underwriting and asset securitization, etc, the China Banking Regulatory Commission may, in light of the needs of development of trust company industry, adjust the minimum amount Article 11 No trust company may set up any branch institution either directly or in any disguised form without the approval of China Banking Article 12 A trust company shall obtain the approval of China Banking Regulatory Commission under any of the following circumstances: (1) to change its name; (2) to change its registered capital; (3) to change its domicile; (4) to change the organization form; (5) to adjust its business scope; (6) to change any director or senior manager; (7) to change any shareholder or adjust equity structure, except for holding the circulated shares of a listed company less than 5% of (8) to revise its articles of association; (9) to merger or divide; (10) other circumstances as stipulated by China Banking Regulatory Commission. Article 13 In case a trust company applies for dissolution owing to division, merger or any other cause for dissolution as stipulated in the Article 14 In case a trust company can not pay off its due debts and does not possess enough assets to cover the debts or it obviously lacks With regard to such a trust company, China Banking Regulatory Commission may directly apply to the people’s court for reforming or Article 15 In case a trust company is terminated, its duties of managing trust affairs shall be terminated concurrently. The liquidating group Chapter III Business Scope Article 16 A trust company may apply for conducting part or all of the following businesses of domestic or foreign currency: (1) trust of capital; (2) trust of movable property; (3) trust of real estate; (4) trust of negotiable instruments; (5) trust of any other property or property rights; (6) to engage in investment fund business as a promoter of a investment fund or fund management company; (7) to conduct such businesses as the reorganization, purchase and merger of enterprise assets, fund-raising for project, corporation (8) to conduct the securities underwriting businesses upon commission as approved by the related departments under the State Council; (9) to conduct such businesses as brokerage, consultation and credit investigation, etc; (10) to provide safe-keeping services upon commission and to operate the business of safety-deposit boxes; (11) other businesses as prescribed in any law or regulation or approved by China Banking Regulatory Commission. Article 17 A trust company may, in accordance with the provisions of the Trust Law of the People’s Republic of China and the relevant laws and Article 18 A trust company may, according to different trust purposes, different varieties of trust property and different management styles Article 19 A trust company may, according to the stipulations in the trust documents, manage, use or dispose its trust property by means of No trust company may manage or use trust property in manners of selling out for repurchasing. Article 20 Such businesses as inter-bank deposits, inter-bank offers, loans, lease and investment may be conducted by a trust company under Except it is otherwise stipulated by China Banking Regulatory Commission, no trust company may make industrial investment with its Article 21 Except it is stipulated otherwise by China Banking Regulatory Commission, a trust company may not conduct the liability businesses Article 22 A trust company may provide guarantee for outsiders, provided that the guarantee balance may not be more than 50% of its net assets. Article 23 A trust company shall, when operating foreign exchange trust business, conform to the related provisions of the state on foreign Chapter IV Operating Rules Article 24 A trust company shall, when managing, operating or disposing its trust property, scrupulously perform its duties, fulfill its obligations Article 25 A trust company shall, when handling trust affairs, avoid the conflict of interests. When it is impossible to avoid such conflict, Article 26 A trust company shall dispose of trust affairs by itself. In case any trust document stipulates otherwise or it has any reason of Article 27 Except it is stipulated otherwise in any law or regulation or trust document, a trust company has the obligation of keeping secret Article 28 A trust company shall appropriately completely record its disposing of trust affairs and report its trustors and beneficiaries the A trustor or beneficiary has the right to be informed of the situation on the management, operation, disposal as well as revenue and Article 29 A trust company shall manage its trust property and inherent property separately and keep accounts thereof separately. And it shall Article 30 A trust company shall set up accounts in accordance with law, make business accounting for the trust business and non-trust business Article 31 The trust business department of a trust company shall be independent from the company’s other departments, this department’s personnel Article 32 In case a trust is established in the form of trust contract, the following items shall be indicated in the trust contract: (1) the trust purpose; (2) name or post_title and domicile of the trustor and that of the trustee; (3) beneficiaries or scope thereof; (4) scope, variety and situation of trust property; (5) rights and obligations of the parties to the trust; (6) release and assuming of the risks involved in the management of trust property; (7) management style of trust property and the trustee’s management right ; (8) trust interests calculation as well as the form and method for delivering trust interests to the beneficiaries; (9) calculation and payment of remunerations for the trust company; (10) assuming of the tax on trust property and the calculation of other expenses; (11) trust period and termination ; (12) ownership of trust property at the time of the termination of the trust; (13) reporting of trust affairs; (14) liabilities for breaching contract by the parties to the trust and the method for settling dispute; (15) method for choosing new trustee; (16) other items that is necessary to be indicated as considered by the parties to the trust. In the case of establishing a trust in the form of any written document other than trust contracts, the items to be indicated in the Article 33 When conducting inherent business, no trust company may commit any of the following behaviors: (1) to contribute funds or transfer property to any of its associated parties; (2) to provide guarantee for any of its associated parties; (3) to raise funds by pledging the equity held by any this company’s shareholder. The associated parties of a trust company shall be defined according to the Company Law of the People’s Republic of China and the Article 34 When conducting trust business, no trust company may commit any of the following activities: (1) to seek improper interests by taking advantage of its status as trustee; (2) to misappropriate its trust property for any non-trust purpose; (3) to promise that the trust property would suffer no loss or guarantee a minimum return; (4) to provide guarantee with trust property; (5) other activities prohibited by any law or regulation or China Banking Regulatory Commission. Article 35 A trust company shall, on the basis of fair market price, conduct associated transactions, report each transaction to China Banking Article 36 Except it is otherwise stipulated by China Banking Regulatory Commission, a trust company shall collect remunerations in the form A trust company shall inform the beneficiaries of the fact of collecting remunerations and shall explain the detailed charging rates Article 37 In case a trust company handles its trust property by disobeying the original trust purpose, or causes any loss to the trust property Article 38 The expenses spent and the liabilities assumed by a trust company for its disposal of trust affairs shall be undertaken by the trust Article 39 In case a trust company handles its trust property with violation of the trust purpose, or if it has gross negligence in the management, Article 40 In case the trustee is terminated in accordance with law, a new trustee shall be chosen as stipulated in the trust document; in the Article 41 A trust company shall, when conducting trust business, terminate a trust where it faces any of the following circumstances: (1) a cause for termination stipulated in the trust document occurs; (2) the continuous existence of the trust goes against the trust purpose; (3) the trust purpose has came true or can’t be realized; (4) the parties to the trust agree to do so upon negotiations; (5) the trust period has expired; (6) the trust has been rescinded; (7) the trust has been canceled; (8) all the beneficiaries of the trust have abandoned the beneficiary right. Article 42 In case a trust is terminated, the trust company shall make a liquidation report on disposing trust affairs as stipulated in the Chapter V Supervision and Management Article 43 A trust company shall build up an organizational structure mainly composed of the shareholders’ meeting, the board of directors, Article 44 A trust company shall, in accordance with the principle of the separation of duties, arrange corresponding posts, ensure that the Article 45 A trust company shall formulate the rules for operating trust business and other businesses according to the related provisions, Article 46 A trust company shall set up and perfect its financial and accounting system according to the related provisions of the state and Article 47 China Banking Regulatory Commission may check any trust company’s business activities on a regular or irregular basis; it may require A trust company shall provide the related statements and materials on its business activities and financial situation as required Article 48 Net capital management shall be adopted by China Banking Regulatory Commission over trust companies. The specific measures shall Article 49 5% of its annual after-tax profits shall be drawn by a trust company as trust compensation reserve, but when the accumulated amount A trust company’s compensation reserve shall be deposited in a domestic commercial bank that possesses stable operation and certain Article 50 An examination system shall be adopted by China Banking Regulatory Commission for the post-holding qualifications of the trust companies’ In case a director or senior manager leaves the post, a trust company shall conduct a post-leaving audit and report China Banking Article 51 A trust business qualification management system shall be adopted by China Banking Regulatory Commission with regard to the trust Article 52 In case a director, senior manager or trust practitioner of a trust company violates any law, administrative regulation or any related Article 53 China Banking Regulatory Commission may, in light of the needs for performing its duties, hold talks on supervision and management Article 54 In case a trust company goes against the prudent operation rules, China Banking Regulatory Commission shall order it to make corrections Article 55 In case a credit crisis has already or may be encountered by a trust company and the lawful rights and interests of the beneficiaries Article 56 In Case China Banking Regulatory Commission, after approving the establishment, alteration or termination of a trust company, discovers Article 57 A trust company may join China Trustee Association to be a member therein and accept industrial self-discipline. China Trustee Association shall, when conducting activities, be subject to the guidance and supervision of China Banking Regulatory Chapter VI Penalty Provisions Article 58 In case any entity or individual sets up any trust company without the approval of China Banking Regulatory Commission, China Banking Article 59 In case any trust company sets up any branch institution without the approval of China Banking Regulatory Commission or conducts Article 60 In case any trust company violates any other provision of the present Measures, China Banking Regulatory Commission shall, in accordance Article 61 In case a trust company commits any illegal operation or poor management, and if the trust company is not cancelled, the financial Article 62 As regards a director, senior manager or any other personnel directly held liable for the trust company’s violation, such punishment Article 63 Any entity or individual that has objection to the punishment decision made by China Banking Regulatory Commission may apply for Chapter VII Supplementary Provisions Article 64 If a trust company does not perform its management duties by itself, namely, not undertaking the duties of investment manager, its Article 65 China Banking Regulatory Commission is responsible for interpreting the present Measures. Article 66 The present Measures shall go into effect as of March 1, 2007. The Measures for Administering Trust and Investment Companies (Decree |
The China Banking Regulatory Commission
2007-01-23