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THE PROVISIONS ON THE ADMINISTRATION OF FOREIGN-FUNDED ADVERTISING ENTERPRISES

State Administration for Industry and Commerce, Ministry of Commerce

Order of the State Administration for Industry and Commerce and the Ministry of Commerce

No. 8

The Provisions on the Administration of Foreign-funded Advertising Enterprises, which were deliberated and adopted by the State Administration
for Industry and Commerce and the Ministry of Commerce, are hereby promulgated.

Wang Zhongfu, Director General of the State Administration for Industry and Commerce

Bo Xilai, Minister ofthe Ministry of Commerce

March 2nd, 2004

The Provisions on the Administration of Foreign-funded Advertising Enterprises

Article 1

With a view to strengthening the administration on the foreign-funded advertising enterprises, and promoting the sound development
of advertising industry, the present Provisions are formulated in accordance with the laws and administrative regulations governing
the management of foreign investments and advertisements.

Article 2

“Foreign-funded advertising enterprises” as mentioned in the present Provisions refers to the Sino-foreign equity joint enterprises
and Sino-foreign contractual joint ventures lawfully engaging in advertising operations (hereinafter referred to as Sino-foreign
equity joint or contractual advertising enterprises, the same below) and foreign-funded advertising enterprises.

Article 3

Establishing a foreign-funded advertising enterprise, one shall abide by the present Provisions as well as the Law of the People’s
Republic of China on Sino-foreign Equity Joint Enterprises, the Law of the People’s Republic of China on Sino-foreign Contractual
Joint Enterprises, the Law of the People’s Republic of China on Foreign-funded Enterprises, the Advertising Law of the People’s Republic
of China, Regulations on the Management of Advertisements, the Regulations on the Qualifications of Advertising Operators or Issuers
of Advertisements and the Phraseology for Determining the Business Scope of Advertising, and other relevant laws, regulations and
rules.

Article 4

The project proposal and the feasibility study report of a foreign-funded advertising enterprise shall be subject to the examination
and approval of the State Administration for Industry and Commerce (SAIC) and its authorized administration for industry and commerce
of provincial level. The contracts and articles of associations of a foreign-funded advertising enterprise shall be subject to the
examination and approval of the Ministry of Commerce and its authorized administrative department of the provincial level.

Article 5

A foreign-funded advertising enterprise that meets the prescribed conditions may engage in designing, making, issuing, or agency of
various advertisements businesses both home and abroad. The specific business scope shall be subject to the examination and approval
of the SAIC and its authorized administration for industry and commerce of provincial level in pursuance of the Regulations on the
Qualifications of Advertising Operators or Issuers of Advertisements and the Phraseology for Determining the Business Scope of Advertising.

Article 6

The establishment of a Sino-foreign equity joint and contractual advertising enterprise, one shall conduct according to the procedures
as follows:

(1)

The main Chinese partner shall submit the documents as listed in Article 12 to the local administration for industry and commerce
competent for examining and approving the registration of foreign-funded enterprises, who shall give an opinion on the preliminary
examination, then submit the aforesaid documents to the administration for industry and commerce of the provincial level authorized
by the SAIC for examination and approval, or submit them to the SAIC for examination and approval via the administration for industry
and commerce of a province, autonomous region, municipality directly under the Central Government or city directly under State planning
upon examination and approval.

The SAIC and its authorized administration for industry and commerce of the provincial level shall make a decision on approval or
disapproval within 20 days as of the day when they received the complete set of documents.

(2)

After obtaining the Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC or
its authorized administration for industry and commerce of the provincial level, the main Chinese partner shall submit the documents
as listed in Article 13 to the administrative department of commerce of the provincial level where the to-be-established enterprise
is located. After it is approved by the administrative department of commerce of the provincial level upon examination, a Foreign-funded
Enterprise Approval Certificate shall be issued. If it is disapproved, written explanations shall be given.

(3)

The main Chinese partner shall, pursuant to the relevant regulations on enterprise registration, handle the enterprise registration
formalities in the SAIC or in its authorized administration for industry and commerce competent for examining and approving the registration
of foreign-funded enterprise on the strength of the Opinion on the Examination and Approval of the Foreign-funded Advertising Enterprise
Project issued by the SAIC and its authorized administration for industry and commerce, the Foreign-funded Enterprise Approval Certificate
issued by the administrative department of commerce of the provincial level and other documents as required by the laws and regulations.

Article 7

The establishment of a foreign-funded advertising enterprise, one shall conduct according to the procedures as follows:

(1)

The foreign investor shall submit to the SAIC the documents as listed in Article 14 .

The SAIC shall make a decision on approval or disapproval within 20 days as of the day it receives the complete set of documents.

(2)

After obtaining the Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC, the
foreign investor shall submit the documents listed in Article 15 to the administration for industry and commerce of the provincial
level where the to-be-established enterprise is located. The administration for industry and commerce of the provincial level shall
give a preliminary examination opinion and submit the aforesaid documents to the Ministry of Commerce for examination and approval
within 20 days.

The Ministry of Commerce shall make a decision on approval or disapproval within 20 days as of the day it receives the documents.
After examination and approval, a Foreign-funded Enterprise Approval Certificate shall be issued.

(3)

The foreign investor shall, according to the relevant regulations on the enterprise registration, go through the enterprise registration
formalities in the SAIC on the strength of the Opinion on the Examination and Approval of the Foreign-funded Advertising Enterprise
Project issued by the SAIC, the Foreign-funded Enterprise Approval Certificate issued by the administrative department of commerce
of the provincial level and other documents as prescribed in the laws and regulations.

Article 8

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall conduct according to the procedures
as follows:

(1)

It shall submit the documents as listed in Article 16 to the local administrative department of commerce and the administration for
industry and commerce of the provincial level separately;

(2)

The local administrative department of commerce of the provincial level shall make a decision on approval or disapproval after consulting
the administration for industry and commerce of the same level. Where it approves, it shall simultaneously send a copy of approval
document to the administrative department of commerce of the provincial level where the to-be-established branch is located and the
administration for industry and commerce of the provincial level; if it disapproves, it shall give written explanations; and

(3)

It shall handle the enterprise registration formalities in the administration for industry and commerce competent for examining and
approving the registration of foreign-funded enterprises where the to-be-established branch is located on the strength of the approval
documents on establishment of branches and other documents as prescribed by the laws and regulations.

Article 9

Establishing a Sino-foreign equity joint or contractual advertising enterprise, the applicant shall not only meet the conditions as
provided for in the relevant laws and regulations, but also meet the following requirements:

(1)

All partners shall be enterprises engaging in advertising business;

(2)

All partners shall have existed and have engaged in advertising business for not less than 2 years since establishment; and

(3)

Having advertising achievements.

Article 10

Establishing a foreign-funded advertising enterprise, the applicant shall not only meet the relevant conditions as provided for in
the laws and regulations, but also meet the following conditions:

(1)

The investor shall be an enterprise mainly engaging in advertising business; and

(2)

The investor has existed and has engaged in advertising business for not less than 3 years since establishment.

Article 11

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall meet the following basic conditions:

(1)

Having paid up the registered capital; and

(2)

Its annual business volume is not less than RMB 20 million Yuan.

Article 12

Applying for the establishment of a Sino-foreign equity joint or contractual advertising enterprise, the main Chinese partner shall
submit the following documents to the SAIC or its authorized administration for industry and commerce of the provincial level according
to the procedures as provided for in Article 6 :

(1)

The application for the establishment of Sino-foreign equity joint or contractual enterprise;

(2)

The Notice on the Pre-approval of Enterprise Name;

(3)

The resolutions made by the partners’ shareholders’ assembly (board of directors);

(4)

The project proposal for the establishment of Sino-joint equity joint or contractual enterprise and the feasibility research report
jointly formulated by all partners;

(5)

The registration certifications of all partners;

(6)

The credit-standing certifications of all partners;

(7)

The bylaws for advertising management; and

(8)

The preliminary examination opinions of the local administration for industry and commerce.

Article 13

Applying for the establishment of a Sino-foreign equity joint or contractual advertising enterprise, the applicant shall, in accordance
with Article 6 , submit the following documents to the administrative department of commerce of the provincial level:

(1)

The Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC or its authorized
administration for industry and commerce of the provincial level;

(2)

The contract for establishing a foreign-funded advertising enterprise and articles of association;

(3)

The project feasibility research report;

(4)

The registration certifications of all partners;

(5)

The credit-standing certifications of all partners;

(6)

The Notice on the Pre-approval of Enterprise Name;

(7)

The bylaws for advertising management; and

(8)

The preliminary examination opinions of the local administrative department of commerce.

Article 14

Applying for the establishment of a foreign-funded advertising enterprise, the investor shall submit the following documents to the
SAIC according to the procedures prescribed in Article 7 :

(1)

The application for the establishment of foreign-funded advertising enterprise;

(2)

Resolutions of the investor’s shareholder’s assembly (board of directors);

(3)

The project proposal formulated by an investor and the feasibility research report;

(4)

The registration certification of the investor;

(5)

The credit-standing certification of the investor; and

(6)

The Notice on the Pre-approval of Enterprise Name.

Article 15

Establishing a foreign-funded advertising enterprise, the foreign investor shall submit the following documents to the Ministry of
Commerce according to the procedures prescribed in Article 7 :

(1)

The application for establishing a foreign-funded advertising enterprise;

(2)

The Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project;

(3)

The project proposal and feasibility research report formulated by the investor;

(4)

The registration certification of the investor;

(5)

The credit-standing certification of the investor; and

(6)

The articles of association for the establishment of the foreign-funded advertising enterprise.

Article 16

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall submit the following documents
to the administrative department of commerce of the provincial level and the administration for industry and commerce of the same
level:

(1)

The application of a foreign-funded advertising enterprise for establishing a branch;

(2)

The resolution of the board of directors;

(3)

The annual audit report on advertising operations;

(4)

The Enterprise Business License;

(5)

The business place certification; and

(6)

The enterprise’ capital verification report.

Article 17

After establishing a foreign-funded advertising enterprise, it shall, if any of the following circumstances occurs, report for approval
separately and modify the registration of the enterprise according to the procedures as provided for in Articles 6 and 7:

(1)

Modifying a partner or transferring equity;

(2)

Modifying the scope for advertising business; or

(3)

Modifying the registered capital.

Article 18

while establishing an advertising enterprise, a foreign investor may entrust a qualified agency to handle the application formalities
for it.

Article 19

All the documents required to submit according to the present Provisions shall be expressed in Chinese.

Article 20

Where a foreign investor who invests in advertising industry by merging a domestic advertising enterprise, he shall handle the formalities
as provided for in the relevant regulations and the present Provisions on merge of domestic enterprises by foreign investors.

Article 21

Where investors from Hong Kong, Macao and Taiwan establish advertising enterprises in the Mainland of China, they shall handle the
formalities by referring to the present Provisions.

Article 22

Where a foreign-funded enterprise files an application for increasing advertising business, it shall handle the formalities by referring
to the present Provisions.

Article 23

Foreign investors are allowed to hold majority equity as of the promulgation date of the present Provisions, which shall be not more
than 70% of the total equity. Foreign investors are allowed to establish foreign-funded advertising enterprises as of December 10th,
2005.

Article 24

The responsibility to interpret the present Provisions shall remain with the SAIC and the Ministry of Commerce.

Article 25

The present Provisions shall come into effect as of the promulgation. Some Provisions on the Establishment of Foreign-funded Advertising
Enterprises ([1994] No. 304) printed and distributed by the State Administration for Industry and Commerce shall be repealed simultaneously,
and any other documents contradictory to the present Provisions shall be null and void simultaneously.

Attachment:

With a view to promoting the establishment of Hong Kong and Mainland and Macao and Mainland closer economic partnership, encouraging
Hong Kong service providers and Macao service providers to establish advertising enterprises in the Mainland, the following supplementary
provisions governing Hong Kong and Macao investors’ investments in advertising industry are formulated in accordance with the Mainland
and HK Closer Economic Partnership Arrangement and the Mainland and Macao Closer Economic Partnership Arrangement:

1. As of January 1st, 2004, Hong Kong service providers and Macao service providers are allowed to establish wholly-funded advertising
enterprises.

2. Hong Kong service providers or Macao service providers shall meet the definition of “the service providers” and other relevant
requirements in the Mainland and HK Closer Economic Partnership Arrangement or in the Mainland and Macao Closer Economic Partnership
Arrangement.

3. A Hong Kong service provider or Macao service provider shall be a legal person engaging in advertising operations (including the
circumstance that the advertising isn’t its major business).

4. Where any other provisions on investments in the Mainland advertising industry made by Hong Kong service providers and Macao service
providers contradictory to the present Provisions, the latter shall prevail.



 
State Administration for Industry and Commerce, Ministry of Commerce
2004-03-02

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON INTENSIFYING THE ADMINISTRATION OF COLLECTION OF INDIVIDUAL INCOME TAX OF FOREIGN EMPLOYEES

the State Administration of Taxation

Circular of the State Administration of Taxation on Intensifying the Administration of Collection of Individual Income Tax of Foreign
Employees

Guo Shui Fa No. 27 [2004]

March 5, 2004

aus of state taxation and those of local taxation of all provinces, autonomous regions, municipalities directly under the Central
Government and cities directly under state planning, and all the entities of the Administration,

With the economic globalization and the continuous advance of the opening to the outside world, more and more foreign employees work
in our country or engage in business activities. Due to the great mobility of foreign employees, the individual income tax policies
involved become more complicated, which has brought about some difficulties for foreign employees to make accurate judgment on their
tax paying obligations and for taxation authorities to supervise tax resources. And there frequently occurs the under-declaration
and underpayment of individual income tax. With a view to intensifying the administration on individual income tax of foreign employees
and on tax payment services, and further improving the quality and efficiency of the administration of tax collection, the relevant
issues are hereby notified as follows:

I.

Enhanrstanding and perfecting administration mechanismThe individual income tax of foreign employees is strongly policy-related, which
relates to not only the issues on the determination and division of the international taxation jurisdiction, but also the specific
policies and procedures for computing the taxable income and the tax payable and is the important content of international taxation
administration. Therefore, it has to do with not only the guarantee of the state revenue, but also the maintenance of tax sovereignty
of the state to intensify the administration of the collection of individual income tax of foreign employees and to make them to
properly perform their obligations of tax payment. All the localities shall sharpen the awareness of the importance of the administration
work for collecting individual income tax of foreign employees, set up and perfect the system of post and responsibility for the
international taxation administration, enrich professionals, and improve and regulate the procedures for administration, so as to
provide safeguards for the administration of individual income tax of foreign employees.

II.

Standardizing the law enforcement to ensure the fulfillment of the policiesThe policies applicable to the individual income tax of
foreign employees include the tax laws and regulations of China, tax agreements signed between the Chinese government and the foreign
governments. All the localities shall strengthen the self-capability training, improve the vocational skills of tax staff members
and accurately grasp the relevant policies. The law enforcement acts shall be further standardized to make strict the tax laws and
disciplines and rectify the procedures for the administration of tax collection so as to ensure the fulfillment of the policies concerning
the individual income tax of foreign employees and provide an open, fair and just taxation environments for foreign employees.

III.

Improving services to facilitate foreign employees to pay taxes according to law It is the function and duty of tax authorities to
intensify the administration of collection of individual income tax of foreign employees and to provide high-quality tax payment
services. All the localities shall take effective measures to earnestly solve difficulties and problems encountered by foreign employees
in their declaration of tax payment. Tax policies shall be propagated through internet, newspapers and periodicals, televisions,
broadcast and other media. Tutorships shall be made especially to foreign employees and their withholding agents, and smooth consultation
channels shall be provided for them, so as to help them understand the relevant tax laws and regulations of China, be familiar with
the procedures for the administration of tax collection and improve their observance of tax laws. The inter-department cooperation
shall be strengthened, and smooth information communication channels shall be established by strengthening the cooperation between
the departments of entry and exit administration, industry and commerce, customs, foreign trade and economy, education, culture,
physical education, science and technology and etc., as so to timely grasp the information on employment and flow of foreign employees
and to lay a good foundation for supervision of tax resources.

IV.

Intensifying the administration of tax collection and doing a good job for recovering the overdue taxesAll the localities shall carry
out a recovery of overdue taxes before the end of 2004, which is mainly designed to encourage taxpayers to make self-examination
and corrections. And the specific requirements are as follows:

1.

Where a foreign employee or a withholding agent declares the unpaid tax of the previous years on his/its own initiative before the
end of June 2004, he/it shall, in addition to making up the unpaid taxes according to law, pay a surcharge for overdue payment at
0.5 percent of the overdue tax for each day in arrears; but he/it may not be punished;

2.

Where a foreign employee still fails to make up the taxes on his/her own initiative within the above-mentioned time limit, if he/she
has disguised the relevant facts, or falsely report or failed to report the taxable income for a long time, he/she shall be ordered
to pay the overdue taxes and a surcharge for overdue payment according to the provisions of the Law of the People’s Republic of China
on the Administration of Tax Collection, and shall be imposed a fine as well.

V.

This Circular shall be referred to in the administration of collection of individual income tax of compatriots from Hong Kong, Macao,
Taiwan and oversea Chinese.



 
the State Administration of Taxation
2004-03-05

 






MEASURES FOR THE ADMINISTRATION ON CONSOLIDATED FINANCIAL STATEMENTS IN CONDUCTING SUPERVISION OVER FOREIGN-FUNDED BANKS

China Banking Regulatory Commission

Measures for the Administration on Consolidated Financial Statements in Conducting Supervision Over Foreign-funded Banks

YinJianFa [2004] No.10

March 8th, 2004

Chapter I General Provisions

Article 1

The present Measures are hereby formulated for the purpose of implementing the Banking Supervision Law of the People’s Republic of
China and the Regulations of the People’s Republic of China on the Administration of Foreign-funded Financial Institutions and other
laws and regulations, for the purpose of regulating the supervision over the consolidation of financial statements and implementing
effective risk supervision.

Article 2

China Banking Regulatory Commission (hereinafter referred to as CBRC) shall be responsible for the guidance over the administration
of the consolidation of financial statements in foreign-funded banks.

Article 3

CBRC shall conduct supervision over the solely foreign-owned banks or joint-stock banks that have established operative branch institutions
or affiliated institutions, and foreign banks that have established two or more operative branches in China through the consolidation
of financial statements.

Through the consolidation of financial statements, CBRC can fully supervise over the worldwide operation and risk status of foreign-funded
corporate institutions registered in China, the overall business and risk status of the foreign banks in China, and pay attention
to the business risk and market behaviors thereof worldwide.

Article 4

The leading reporting bank as mentioned hereinafter refers to the parent bank of the solely foreign-funded or joint-stock banks, and
institutions for reporting consolidated financial statements and comprehensive information, which are designated by the parent bank
of a foreign bank or the regional management departments it authorizes and are put on records at the agencies of CBRC. The “supervision
bureau of consolidated financial statements ” refers to the agency of CBRC at the place where the leading reporting bank of a foreign-funded
bank is located. And “the territorial supervision bureau” refers to the agency of CBRC at the place where other business branches
of a foreign-funded bank are located.

Article 5

The “year” as mentioned in the present Measures refers to the year of the Gregorian calendar from January 1 to December 31. The fiscal
year refers to the legal fiscal year of each country.

Chapter II The Determination of the Leading Reporting Banks and their Functions

Article 6

The foreign-funded banks that the conditions of consolidated financial statement in conducting supervision as prescribed in Article
3 of the present Measures shall determine a leading reporting bank.

Article 7

Those foreign-funded corporate institutions that meet the conditions for the supervision over the consolidation of financial statements
as a result of the establishment of additional branch institutions or mergers shall file for a record at an agency of the CBRC at
the place where the parent bank is located within one month after the conditions are met.

Where a foreign bank meets the conditions for the supervision over the consolidation of financial statements due to the establishment
of additional institutions, its parent bank or authorized regional management department shall assign a leading reporting bank within
one month after they have been approved officially by the CBRC. And the leading reporting bank shall then file for a record at the
agency of CBRC at the place where it is located, and send a copy to the relevant territorial supervision bureau.

Article 8

Where a foreign bank needs to change the leading reporting bank, its parent bank or authorized regional management department shall
change the leading reporting bank one month before the end of the fiscal year. The former leading reporting bank and newly appointed
one shall put this on records at the respective local agencies of the CBRC, and send a copy to the relevant territorial supervision
bureau.

The newly appointed leading reporting bank shall undertake the functions of the leading reporting bank from the next fiscal year.

Article 9

The leading reporting bank shall employ full-time or part-time eligible managers in the China Region in light of circumstances. The
examination on the qualifications for holding such a post shall apply the filing system for the senior management personnel of foreign-funded
financial institutions as prescribed in the Detailed Rules for the Implementation of the Regulations of the People’s Republic of
China on the Administration of the Foreign-funded Financial Institutions.

Article 10

The leading reporting bank is an institution for the collection of consolidated financial statements and the comprehensive information
of a foreign-funded bank. It performs the following functions:

1.

The leading reporting bank shall submit or put on record the supervision statements, statement and report of major matters concerned,
and other supervision materials to the supervisory bureaus of consolidated financial statements according to the requirements of
supervision, and shall be responsible for the truthfulness, accuracy and timeliness of the contents submitted and filed on record.

The leading reporting bank shall also be responsible for submitting the business applications concerning several branch banks within
China to the supervisory bureaus of consolidated financial statements uniformly, and send a copy thereof to the territorial supervisory
bureaus.

2.

The leading reporting bank may attend the work meeting or proseminar convened by the CBRC on behalf of the foreign-funded bank it
is subordinated to, and propose opinions and suggestions in the name of the foreign-funded bank. The leading reporting bank, which
attends the meeting shall report in time the information of the meeting to the parent bank (general bank) or the regional management
departments and circulate a timely notice to other business branches within the territory.

The opinions and suggestions of foreign-funded banks on relevant Chinese supervision laws and regulations shall be submitted to the
supervisory bureaus of consolidated financial statements uniformly by the leading reporting bank after being collected by it, After
obtaining the feedback opinions, the leading reporting bank convey them to other business branches within China in time.

3.

The leading reporting bank shall report the relevant information in respect of economy and finance of the parent bank and home country
or region as supervision requires;

4.

The leading reporting bank shall be responsible for the information disclosure of the domestic business branches of a foreign-funded
bank.;

5.

Implementing other requirements of the supervision bureau;

The leading reporting bank shall attach electronic documents at the time of submitting written material.

Article 11

The person in charge of the leading reporting bank shall be responsible for the consolidation of financial statements undertaken by
the leading reporting bank.

Chapter III Non-On-The-Spot Supervision

Article 12

The CBRC shall be responsible for guiding and supervising over the work of its agencies in the non-on-the-spot supervision over the
consolidation of financial statements at foreign-funded banks.

Article 13

The supervisory bureaus of consolidated financial statements shall supervise over the quarterly reports on consolidated financial
statements from the institutions operating at home submitted by the leading reporting bank, of which, the financial statements from
the overseas branches and subordinate institutions of a solely foreign-funded bank or joint-stock bank and the consolidated financial
statements of a group company shall be reported with written documents by year.

Article 14

The supervisory bureaus of consolidated financial statements shall see to it that the leading reporting banks file for a timely record
of the following matters:

1.

The annual report already publicized and the information disclosure of the business branches operating at home for the fiscal year.

2.

The rating by external rating institutions.

3.

The major news released by the parent bank.

4.

The documents specifying the events under investigation.

5.

Appraisal of the supervision bureau of the home country or region and major supervision measures.

6.

The statement on major adjustment of policies in respect of finance and economy of the home country or region. And

7.

Other relevant documents as prescribed in the Detailed Rules for the Implementation of the Regulations of the People’s Republic of
China on the Administration of Foreign-funded Financial Institutions

Article 15

The consolidated financial statement supervision bureaus shall require the leading reporting bank to submit one copy of the Summary
Report of the Business Conditions of Foreign Funded Banks half a year, which shall include basic information (the number of operative
institutions, number of employees, alteration of the business scope, etc.), the specification on centralization of loan granting,
analysis on reserves for losses of loans, the transfer of large amount of assets, analysis on flowing in or out of capitals, connected
transaction, listing of overseas loans or investment, and the trends in operation of the business branches, and other contents. There
are also statements on alteration of the structure, business strategies, level of capital adequacy, financial status and market credit
standing of the parent banks.

Article 16

The consolidated financial statement supervision bureaus shall be responsible for monitoring the indicators for eligible supervision
over the examination through consolidated financial statement on a quarterly basis, and make analysis on the trend of risk supervision
indicators and overall business behaviors.

Article 17

The consolidated financial statement supervision bureaus shall collect the business management systems of foreign-funded banks, and
communicate with the leading reporting bank or senior management personnel of regional management departments on contents of risk
management of foreign-funded banks such as the pattern of management, management information system, risk and authorization management,
compliance management, credit management and financial management, etc..

Article 18

The consolidated financial statement supervision bureaus shall submit the following matters concerned to the CBRC according to relevant
provisions:

1.

The major events concerned and various management systems that have been put on records by foreign-funded banks.

2.

The errors in the reports of the data about consolidated financial statements.

3.

The regulation violation and abnormal alteration of the indexes for examination through consolidated financial statement. And

4.

Attitude toward supervision over consolidated financial statements.

Article 19

The consolidated financial statement supervision bureaus shall, on the basis of comprehensive analysis of various supervision information
and on-the-spot examination, complete the half-year and annual supervision reports on consolidated financial statements

Article 20

The CBRC shall be responsible for communicating with the supervision authorities of the home country or region of the foreign-funded
corporate institutions and the supervision authorities of the home country or region of a foreign bank on issues of supervision they
commonly concern, and carry out cooperation on supervision information exchange.

Article 21

The CBRC shall be responsible for promoting the exchange and share of the comprehensive supervision information within their organs,
and provide or disclose the business conditions of the foreign-funded banks within China.

Article 22

The CBRC shall be responsible for unifying the procedures and requirements for the supervision over the consolidation of financial
statements.

Chapter IV On-the-spot Examination

Article 23

The CBRC shall be responsible for organizing, guiding and coordinating the on-the-spot examination of consolidated financial statements
at foreign-funded banks.

Article 24

There shall be two ways for organizing on-the-spot examination through consolidated financial statements:

1.

Entrusting the consolidated financial statement supervision bureaus and the territorial supervision bureaus to assign examination
groups, and carrying out on-the-spot examination through consolidated financial statements respectively according to examination
plans. And

2.

The CBRC shall organize the supervisors of foreign-funded banks to form an examination group to carry out on-the-spot examination
through consolidated financial statement on the consolidated financial statement institutions.

Article 25

The CBRC shall, according to the conditions of risk supervision and periods of on-the-spot examination, determine plans of on-the-spot
examination of consolidated financial statement at foreign-funded banks, and put forward guiding requirements for the form, contents
and emphasis of the examination.

Article 26

The CBRC shall adjust the contents of consolidated financial statement for on-the-spot examination in light of realities, and coordinate
the time and progress of the examination items. In case the examination group finds any major problem in the examination, it shall
report to the CBRC in time.

Article 27

The CBRC shall uniformly formulate plans of consolidated financial statement for on-the-spot examination organized by it. The examination
group shall carry out on-the-spot examination in light of the procedures and requirements as prescribed in the examination handbook
and plan, and complete the examination task within the prescribed time limit.

After ending the on-the-spot task, the examination group shall finish the “Examination Facts and Appraisal” and relevant ratings of
CAMELs/ROCA, and make a final confirmation on the facts concerned with the senior management of the examined institution. After the
end of the examination, the examination team shall transfer the “Examination Facts and Appraisal” and the result of the grading of
CAMELs/ROCA and the examination files to the agency of the CBRC at their locality.

Upon completion of all the examination plans, the examination group shall collect the report of consolidated financial statement for
on-the-spot examination, and report it to the CBRC together with the “Examination Facts and Appraisal” and the ratings of a single
institution.

Article 28

The supervision opinions on consolidated financial statement for on-the-spot examination shall be coordinated uniformly by the CSRC,
who shall then propose suggestions according to the “Examination Facts and Appraisal” and reflect to the corresponding agencies of
the CBRC.

Article 29

The agencies of the CBRC shall be responsible for following up and handling the consolidated financial statement for on-the-spot examination.

The agencies of the CBRC shall, according to the “Examination Facts and Appraisal” and the suggestions of the CBRC, issue opinions
on the consolidated financial statement for on-the-spot examination to the institutions at their locality, require them to rectify
and correct, and impose punishment on acts in violation of regulations according to relevant provisions.

The agencies of the CBRC shall, within 3 months after the on-the-spot examination through consolidated financial statement, follow
up the implementation of the measures for rectification, or make follow-up on-the-spot examination on the consolidated financial
statement institutions at their locality, and report the rectification and correction to CBRC in time.

Article 30

The CBRC shall be responsible for accepting the application of the supervision bureau of the home country or region of a foreign bank
for the transnational on-the-spot examination, and entrust the local agencies of the CBRC and the examination team to exchange opinions
on the supervision over the examined institution.

After the end of the contact, the agencies of the CBRC shall report the information they have acquired to the CBRC in time, and follow
up the issues referred to by the examination team.

Chapter V External Audit and Three Party Talks

Article 31

Where a foreign-funded bank conforms to the conditions for consolidated financial statement supervision, it shall engage the same
accountant office in principle to be responsible for auditing and consolidated financial statement auditing on domestic business
branches and affiliated institutions.

Article 32

The leading reporting bank shall, one month before the end of the fiscal year, put on records the external auditors and auditing group
they engage in the current fiscal year at the consolidated financial statement supervision bureau, and send a copy to the corresponding
territorial supervision bureau at the same time. In case of changing accountant office, the leading reporting bank shall also submit
statement in writing.

In case the agencies of the CBRC have negative opinions on auditing quality made by the external auditors, who are engaged by the
foreign-funded banks, they may make a suggestion to the foreign-funded banks and ask it to change the auditing team or accountant
office within 14 working days after receiving the letter of recording.

Article 33

The external auditors shall communicate with the consolidated financial statement supervision bureau on the auditing requirements
before conducting the consolidated financial statement auditing.

Article 34

The leading reporting banks shall, within 5 months after the end of the fiscal year, report the “Auditing Report for Consolidated
Financial Statement” and the “Letter of Suggestion on Management through Consolidated Financial Statement” to the consolidated financial
statement supervision bureaus.

Article 35

The territorial supervision bureaus shall, within 30 days after receiving the External Auditing Report and the Letter of Suggestion
on Management, reflect the opinions of appraisal on quality of external auditing to the consolidated financial statement supervision
bureau.

The consolidated financial statement supervision bureaus shall be responsible for making comprehensive appraisal on quality of external
auditing through combination of the feedback opinions of each territorial supervision bureau, and issues reflected in the Auditing
Report for Consolidated Financial Statement and the Letter of Suggestion on Management through Consolidated Financial Statement.

Article 36

The consolidated financial statement supervision bureaus shall, on the basis of comprehensive supervision of foreign-funded banks,
be responsible for proposing plans for three -party talks.

The three-party talks on consolidated financial statement shall be organized by the CBRC, and the participating parties shall include
the CBRC, the consolidated financial statement supervision bureau, the territorial supervision bureau, external auditors and the
leading reporting banks. After the end of the talks, the consolidated financial statement supervision bureaus shall complete the
summary of three parties meeting for the consolidated financial statement, and supervise over the leading reporting bank for its
timely feedback of the implementation of the opinions for rectification and correction.

Chapter VI Supplementary Provisions

Article 37

The present Measures shall be interpreted by the CBRC.

Article 38

The relevant opinions on consolidated financial statement in conducting supervision shall be considered as the basis for examination
of such applications as the establishment of additional institutions of a foreign-funded bank and business access, etc..

Article 39

The present Measures shall come into force as of April 1, 2004. Where other relevant provisions concerning the supervision over consolidated
financial statement at foreign-funded banks conflict with the present Measures, the former will be invalidated simultaneously.



 
China Banking Regulatory Commission
2004-03-08

 






REGULATIONS ON FUNDS

State Council

Order of the State Council of the People’s Republic of China

No. 400

Regulations on Funds, adopted at the 38th executive meeting of the State Council on February 4th, 2004, are hereby promulgated. It
shall be implemented as of June 1st, 2004.

Wen Jiabao,Premierr of the State Council

March 8th, 2004

Regulations on Funds

Chapter 1 General Provisions

Article 1

This Regulation is formulated with a view to standardizing the organization and activities of funds, safeguarding the legitimate rights
and interests of funds, donators and beneficiaries and promoting social involvement in the philanthropic undertakings.

Article 2

“The fund” in this Regulation refers to the non-profit legal person incorporated under this Regulation for the purpose of public benefit
undertakings, on the strength of the properties donated by natural persons, legal persons or other originations.

Article 3

Funds include those that can solicit donations from the public (hereinafter referred to as public funds) and those that shall not
solicit donations from the public (hereinafter referred to as non-public finds). Public funds include, in accordance with the scope
of solicitation region, national public funds and local public funds.

Article 4

funds must abide by the constitution, laws, regulation, rules and national policies, shall not harm security and unification of the
state and national solidarity and shall not go against public morality.

Article 5

Funds shall engage in philanthropic activities in accordance with the articles of incorporation thereof in compliance with the principle
of openness and transparency.

Article 6

The civil affairs authority of the State Council and such authorities under the people’s governments at the level of a province, an
autonomous regions and a municipality directly under the Central Government are administrations which funds should register with.

The civil affairs authorities under the State Council are responsible for the registration and administration of the following funds
or representative institutions of funds:

(1)

National public funds;

(2)

Funds whose legal representative is proposed to be assumed by a non-Chinese-mainland resident;

(3)

Non-public funds whose original fund exceeds 20 million RMB Yuan and the sponsor thereof files the incorporation application to the
civil affairs authority under the State Council; and

(4)

Representative institutions established on mainland of China by overseas funds.

The civil affairs authorities under the people’s governments at the level of a province, an autonomous region and a municipality directly
under the Central Government are responsible for the registration and administration of local public funds within its respective
administrative region and non-public funds other than those provided in the previous paragraph.

Article 7

Relevant authorities of the State Council or organizations authorized by the State Council are competent agencies for the business
of funds and representative organizations of the overseas funds registered with the civil affairs authority under the State Council.

Relevant authorities under the people’s governments at the level of a province, an autonomous regions and a municipality directly
under the Central Government or organizations authorized thereby are competent agencies for the business of funds registered with
the civil affairs authorities under the people’s governments at the level of a province, an autonomous regions and a municipality
directly under the Central Government.

Chapter 2 Incorporation, Alteration and Cancellation

Article 8

A fund shall meet the following conditions to be incorporated:

(1)

it is incorporated for specific public benefit purposes;

(2)

the original fund shall be not less than, in the case of a national public fund RMB 8 million Yuan, in the case of a local public
fund RMB 4 million Yuan, in the case of a non-public fund RMB 2 million Yuan. The original fund shall be the monetary fund on the
account.

(3)

it shall has a name, articles of incorporation, an organizational structure as well as full-time working staff in compliance with
the activities it conducts;

(4)

it has a fixed domicile;

(5)

it can assume civil liabilities independently.

Article 9

The applicant shall submit the following documents to the authorities responsible for registration and administration for the incorporation
of a fund:

(1)

the application;

(2)

the draft articles of incorporation;

(3)

the capital verification certificate and the domicile certificate;

(4)

the list of the directors, personal identity certificates thereof as well as resumes of the proposed chairman of the board, vice-chairman
of the board and the secretary general;

(5)

the documents approving the incorporation issued by the competent authorities for business.

Article 10

The articles of incorporation of a fund shall specify its public benefit nature and shall not inure to the benefits of specific natural
persons, legal persons or other organizations.

The articles of incorporation shall set forth:

(1)

the name and the domicile;

(2)

the purpose of incorporation and the business scope of public benefit activities;

(3)

the amount of original fund

(4)

the composition, authorities and discussion rules of the board of directors, and the qualification, determination and term of office
of the directors

(5)

the responsibilities of the legal representative;

(6)

the responsibilities, qualifications, determination and term of office of the supervisors;

(7)

the preparation and the examination and approval of financial accounting reports;

(8)

the system of the management and utilization of properties

(9)

the conditions and procedures for the termination of the fund and the disposal of properties after termination.

Article 11

The registration and administration authorities shall, within 60 days from its receipt of all the valid documents set forth by Article
9 of this Regulation, decide whether to grant approval to registration or not. In case of approval, a Registration Certificate for
the Fund Legal Person shall be issued; In case of disapproval, reasons shall be given in writing.

The matters subject to incorporation registration of a fund include: the name, the domicile, the type, the purposes, the business
scope of public benefit activities, the original fund amount and the legal representative.

Article 12

To establish branches or representative institutions, a fund shall file the application for registration to the original registration
and administration authority, and submit documents containing such matters as the name, the domicile and the person in charge thereof.

The registration and administration authorities shall, within 60 days from receipt of all the valid documents set forth in the previous
article, decide whether to grant approval to registration or not. In case of approval, a Registration Certificate for Branch (Representative)
Institution of Fund shall be issued; In case of disapproval, reasons shall be given in writing.

The matters subject to incorporation registration of branch or representative institutions of a fund include: the name, the domicile,
the business scope of public benefit activities and the person in charge.

Branches or the representative institutions of a fund shall conduct activities as authorized by the fund and it does not possess the
status of a legal person.

Article 13

To establish representative institutions in mainland China, an overseas fund shall submit the following documents to the competent
authorities responsible for registration after obtaining the approval of the relevant authorities responsible for business:

(1)

the application;

(2)

the certificate of legal establishment of the fund abroad according to law and the charter of the fund;

(3)

the identity certificate and resume of the person in charge of the proposed representative institutions;

(4)

the certificate of domicile;

(5)

the document issued by the competent authorities for the business approving the establishment of the representative institutions in
mainland China.

The registration and administration authorities shall, within 60 days from receipt of all the valid documents set forth in the previous
article, decide whether to grant approval to registration or not. In case of approval, a Registration Certificate for Representative
Institution of Overseas Fund shall be issued; In case of disapproval, reasons shall be given in writing.

The matters subject to incorporation registration of the representative institution of an overseas fund include: the name, the domicile,
the business scope of public benefit activities and the person in charge.

Representative institution of an overseas fund shall engage in activities in compliance with the nature of Chinese public benefit
undertakings. The overseas funds shall assume civil liabilities in accordance with Chinese laws with respect to civil actions of
their representative institutions in mainland China.

Article 14

Funds and representative institutions of overseas funds shall, after registration in accordance with this Regulation, go through tax
registration according to law.

Funds and representative institutions of overseas funds shall, based on registration certificates, apply for organization code, prepare
seals and open bank accounts according to law.

Funds and representative institutions of overseas funds shall file with the registration and administration authorities the organization
code, the sample of the seal, the bank account number and the copy of taxation registration certificate.

Article 15

Funds, branches of funds, representative institutions of funds, and representative institutions of overseas funds shall, in case of
any change of registration entries, apply to the registration and administration authorities for alteration registration.

Amendments to the articles of incorporation of the fund shall be approved by the competent authorities of business and ratified by
the registration and administration authority.

Article 16

Funds and representative institutions of overseas funds shall apply for cancellation registration to the registration and administration
authority in case of:

(1)

termination pursuant to articles of incorporation;

(2)

inability to continue to engage in the public benefit activities pursuant to the purposes provided in the articles of incorporation;

(3)

termination on account of other reasons.

Article 17

A fund shall, in event of cancellation of its branches or its representative institutions, make cancellation registration of its branches
or its representative institutions with the registration and administration authority.

Where a fund is canceled, its branches or representative institutions shall be canceled simultaneously.

Article 18

A fund shall, before cancellation registration, establish a liquidation group and complete liquidation under the guidance of the registration
and administration authority and competent authorities of business.

A fund shall, within 15 days from the date when liquidation terminates, make cancellation registration with the registration and administration
authority. No activities other than liquidation shall be carried out within the liquidation period.

Article 19

Registration of incorporation, alteration or cancellation of funds, branches of funds, representative institutions of funds and representative
institutions of overseas funds shall be made public by the registration and administration authority.

Chapter 3 Organizational Structure

Article 20

A fund shall have a board of directors composed of 5 to 25 directors. Each term of office of the directors is provided for in the
articles of incorporation and shall not exceed 5 years. A director may serve consecutive terms if reelected upon expiration of his
term of office.

In the case of a non-public fund incorporated with private properties, the total number of directors as near relatives shall not exceed
one third of all the directors. In the case of other funds, directors as near relatives shall not serve on the board simultaneously.

The number of directors receiving remuneration from the fund shall not exceed one third of the total number of the directors.

Chairman of the board, vice-chairman of the board and secretary general of a fund are elected from the directors. The chairman of
the board is the legal representative of the fund.

Article 21

Board of directors, the decision-making organ of a foundation, shall perform its functions provided in the articles of incorporation
according to law.

The board of directors shall convene at least twice a year. The board of directors shall meet only if more than two thirds of the
directors are present. Any resolution of the board shall be approved by half of the directors present to be valid.

Resolution with respect to the following important matters shall be subject to vote by the directors present and approved by two thirds
to be valid:

(1)

amendments to the articles of incorporation;

(2)

election or removal of the Chairman of the Board, vice-chairman of the Board or the secretary general;

(3)

significant solicitation of donations or investment activities provided for in the articles of incorporation;

(4)

division or merger of the fund.

Meetings of the board shall be minted. Such minutes shall be checked, approved and signed by the directors present.

Article 22

A fund shall have a Board of supervisors, whose term of office is the same with that of the directors. Directors, close relatives
of the directors and financial staff of the fund shall not serve concurrently as supervisors.

Supervisors shall examine the financial and accounting materials pursuant to the procedures provided for in the articles of incorporation,
and supervise compliance by the Board of directors with laws and articles of incorporation.

Supervisors shall attend meetings of the board of directors as non-voting delegates. They have the right to inquire the board of directors
and make suggestions thereto and should report to the registration and administration authority, competent authorities of business
and authorities responsible for taxation and accounting.

Article 23

The positions of Chairman of the board, Vice-chairman and secretary general of funds shall not be held by current public servants.
The legal representative of funds shall not serve as the legal representative of other organizations simultaneously. The positions
of legal representatives of public funds and the non-public funds whose original fund comes from the mainland China shall be held
by residents in mainland China.

Anyone who was sentenced to public surveillance, detention or set term of imprisonment for committing a crime and not more than five
years has elapsed since the date of the expiration of the enforcement period, or anyone who is being or was deprived of political
rights for committing a crime, or anyone who ever served as Chairman, Vice-chairman or secretary general of a fund whose registration
was cancelled for illegal activities and was personally responsible for the illegal activities thereof, and not more than five years
has elapsed since the date of cancellation shall not serve as Chairman of the board, Vice-chairman or secretary general of a fund.

Directors of a fund shall not engage in the decision-making of relevant matters where their personal interests are related with the
interests of the fund. Directors, supervisors and their close relatives shall not have any transaction activities with the fund that
they are serving.

Supervisors and part-time directors serving in a fund shall not receive remuneration therefrom.

Article 24

Residents from Hong Kong, Macau, Taiwan and foreigners serving as Chairman of the board, Vice-chairman or secretary general of funds
as well as the person in charge of the representative institutions of overseas funds shall stay in mainland China for not less than
three months a year.

Chapter 4 Management and Utilization of Properties

Article 25

Funds shall solicit donations and accept donations in accordance with purposes and business scope of public benefit activities provided
for in the articles of incorporation thereof. Representative institutions of overseas funds are not allowed to solicit donations
and accept donations within the territory of China.

Public funds shall, in case of donations soliciting, make a public notice of the public benefit activities proposed to be held and
the detailed plans for utilization of the funds after having raised the funds concerned.

Article 26

Funds and donators and beneficiaries enjoy the preferential taxation treatment in accordance with the provisions of laws and administrative
regulations.

Article 27

The properties and other income of funds are protected by law and shall not be illicitly distributed, seized or embezzled among any
units or individuals.

Funds shall utilize its properties in accordance with purposes and business scope of public benefit activities provided for in the
articles of incorporation thereof, or in case of the donation whose specific way of utilization is specified in the donation agreement,
in accordance with the provisions in the donation agreement.

Where donated materials are unable to be utilized in compliance with the purposes, funds may auction or sell it, and the income thereof
shall be subject to the purposes of donation.

Article 28

Funds shall realize the preservation and increase of the value of funds on the principle of safety and efficiency according to law.

Article 29

Expenditure on the public benefit undertakings stipulated in the articles of incorporation every year shall be not less than, in case
of public funds 70% of the gross income in the previous year, in case of non-public funds 8% of the fund balance in the previous
year.

Expenditure on staff salary and welfare and administrative outlay of funds shall not exceed 10% of total expenditure in the current
year.

Article 30

Funds shall, in implementing public benefit financial support programmes, make a public notice of the types of the public benefit
financial support programmes and the procedures for application and appraisal.

Article 31

Funds may enter into contracts with beneficiaries, and the way of support to provide for the amount of support as well as the purpose
and way of utilization of the funds.

Funds have the right to supervise the utilization of the financial support. In case beneficiaries fail to utilize the financial support
in accordance with the contract or violate the contract, foundations are enpost_titled to rescind the financial support contract.

Article 32

Funds should carry out the national uniform accounting system, conduct accounting check-up according to law and establish and perfect
the internal accounting supervisory system.

Article 33

Remaining fund properties after cancellation shall be utilized for public benefit purposes as stipulated in the articles of incorporation.
For those cannot be disposed in accordance with the articles of incorporation, the registration and administration authority shall
donate them to social public benefit organization with the same nature and purpose as the said fund and make a public notice thereof.

Chapter 5 Supervision and Administration

Article 34

Fund registration and administration authorities perform the following supervisory and administrative functions:

(1)

conduct annual inspection on funds and representative institutions of overseas funds,

(2)

conduct daily supervision and administration over the activities of funds and representative institution of overseas funds in accordance
with this Regulation and the articles of incorporation,

(3)

punish the actions of funds and representative institutions of overseas funds in violation of this Regulation.

Article 35

Competent authorities for the business of the fund shall perform the following supervisory and administrative functions:

(1)

guide and supervise public benefit activities of funds and representative institutions of overseas funds in accordance with law and
articles of incorporation;

(2)

take charge of preliminary examination of the annual inspection on funds and representative institutions of overseas funds

(3)

cooperate with the registration and administration authorities and other law enforcement agencies to inspect and punish illegal actions
of funds and representative institutions of overseas funds.

Article 36

Funds and representative institutions of overseas funds shall submit annual working reports to the registration and administration
authorities before March 31st every year for annual examination. Annual working reports shall be examined and approved by competent
authorities of businesses before their submission to the registration and administration authorities.

Annual working reports shall include: financial accounting reports, auditing reports issued by certified public accountants, reports
on such activities as donation soliciting, donation acceptance, financial support provision and reports on the change of personnel
and organizational structure.

Article 37

Funds shall be subject to taxation and accounting supervision conducted by authorities responsible for taxation and accounting according
to law.

Funds shall, before reelection at expiration of office terms and change of legal representatives, conduct financial auditing.

Article 38

Funds and representative institutions of overseas funds shall, after passing the annual examination conducted by the registration
and administration authorities, make public the working reports through the media designated by the registration and administration
authorities for the inspection and supervision by the public.

Article 39

Donators are enpost_titled to inquire with funds the utilization and management of donated properties and make suggestions. Funds should
respond to the inquiry of donators faithfully and in time.

In case funds utilize donated properties in violation of the donation contracts, donators are enpost_titled to request funds to act in
compliance with the donation contract or apply to the people’s court for revoking the donation action or rescind donation contract.

Chapter 6 Legal Liabilities

Article 40

In case any organization that have not been registered or have its registration cancelled carries out activities in the name of a
fund, a branch of fund, a representative institution of a fund or a representative institutions of an overseas fund, the registration
and administration authorities shall outlaw it, confiscate its unlawful properties and issue public notice thereof.

Article 41

In the following cases, registration of involved funds, branches of funds, representative institutions of funds or representative
institutions of overseas funds shall be cancelled by the registration and administration authorities:

(1)

conceal real situations and practice fraud when applying for registration, or fail to conduct activities in accordance with articles
of incorporation within 12 months from the date of obtaining registration certificate;

(2)

where they satisfy conditions for cancellation but do not go through cancellation registration in accordance with this Regulation
and still continue to carry out activities .

Article 42

In the following cases, funds, branches of funds, representative institutions of funds or representative institutions of overseas
funds, which engage in any of the following circumstances, shall be given a warning, ordered to cease their activities by the registration
and administration authority and in serious cases, registration shall be cancelled:

(1)

fail to conduct activities in accordance with purposes and business scope of public benefit activities provided for in the articles
of incorporation thereof;

(2)

conceal real situations and practice fraud when preparing accounting certificates, registering accounting records or preparing financial
accounting reports;

(3)

fail to go through alteration registration procedures in accordance with provisions;

(4)

fail to fulfill the expenditure amount for public benefit undertakings in accordance with this Regulation;

(5)

fail to accept annual examination in accordance with this Regulation, or fail to qualify therein;

(6)

fail to perform the obligation of information disclosure or disclose fraudulent information

In case funds and representative institutions of overseas funds engaging in any of the above actions, the registration and administration
authority should request taxation authority to order the supplementary payment of the deducted and exempted taxes enjoyed during
the period of the continuing illegal actions by them.

Article 43

In case the board of directors make inappropriate decisions in violation of the provisions of this Regulation and articles of incorporation,
which incurred property loss to funds, directors participating in the decision shall assume corresponding liability for compensation.

Directors, supervisors and full-time working staff of funds who illegally distribute, seize or embezzle fund properties, shall return
property illegally possessed and utilized, or shall be prosecuted for criminal liabilities if the case constitutes a crime.

Article 44

In case funds and representative institutions of overseas funds are ordered to cease activities, the registration and administration
authority shall seal up the registration certificates, seals and financial certificates.

Article 45

In case any staff member working in the registration and administration authority and competent authorities of businesses abuses his
power, neglects his duty, engages in malpractices for personal gains, he shall be prosecuted for criminal liabilities if the case
constitutes a crime, or shall be subject to administrative sanctions or disciplinary sanctions if the case dose not constitute a
crime according to law.

Chapter 7 Supplementary Provisions

Article 46

For the purposes of this Regulation, overseas funds refer to funds incorporated according to law in foreign countries as well as in
Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan Region of the People’s Republic of China.

Article 47

Applications for establishing funds, format for annual working reports of funds and sample for articles of incorporation of funds
shall be formulated by civil affairs authorities under the State Council.

Article 48

This Regulation shall enter into force as of June 1, 2004, and Measures for Funds Administration promulgated by the State Council
on September 27, 1988 shall be repealed simultaneously.

Funds and representative institutions of overseas funds established before this Regulation goes into force shall, within six months
from the date when this Regulation come into force, apply for issuance of a new registration certificate in accordance with this
Regulation.



 
State Council
2004-03-08

 






CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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