WORLD TRADE
ORGANIZATIONS/C/N/222
24 December 2002
(02-7101)
Council for Trade in Services Original:  English
NOTIFICATION PURSUANT TO ARTICLE III:3 OF THE
GENERAL AGREEMENT ON TRADE IN SERVICES
The following notification has been received from the delegation of the People's Republic of
China.
____________
1. Member notifying:
The People's Republic of China
2. Notification under:
Article III, paragraph 3 of the General Agreement on Trade in Services
3. Date of entry into force/duration:
2002/6/1
4. Agency responsible for implementati on and enforcement of the measure:
China Securities Regulatory Commission
5. Complete description of the measure* indicating the modes of supply covered, the effect
on trade in services (e.g., restrictions/liberalization measures) and the impact of the
measure on commitments in the Member's schedule and Article II (MFN) exemption
list, if relevant:
Rules for Establishing Foreign-Invested Fund Management Companies
Full text English translation of the rules is attached1.  The English translation is for reference
only and the Chinese version shall be authentic.
6. Members specifically affected, if any:
All Members
7. The texts are available from:
- Enquiry point /g254
- WTO Secretariat /g254
- Other sources (address, fax
and telephone of other body)  /g168
                                                     
* Including international agreements, recognition measures or other types.
1 In English onlyS/C/N/222
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Rules for Establishing Foreign -Invested Fund Management Companies
(promulgated by the China Securities Regulatory Commission on June 1st, 2002)
Article 1 These Rules are formulated, in accordance with the relevant provisions of the
Company Law and the Interim Measures for Administration of Securities Investment Funds
(hereinafter referred to as Interim Measures), to  adapt to the requirements of opening securities
market to the outside world, strengthen the supervision and administration of foreign -invested fund
management companies and clarify the conditions and procedures for the establishment of foreign -
invested fund management companies.
Article 2 Foreign-Invested fund management companies referred to in these Rules include the
fund management companies altered as a result of overseas shareholders’ acceptance of the transfer of
or purchase of domestic fund management companies shares or the fund management companiesestablished by overseas shareholders and domestic shareholders through joint contribution.
Article 3 The China Securities Regulatory Commission (hereinafter referred to as the "CSRC")
shall be responsible for the examination, approval, supervision and administration of foreign -invested
fund management companies.
Article 4 The organizational form of foreign-invested fund management companies is limited
liability company.
Foreign-Invested fund management companies’ names, registered capital, organizational institutions
establishment and duties and responsibilities there of shall conform to the Company Law, the Interim
Measures as well as the relevant provisions of the CSRC.
Article 5 Foreign-Invested fund management companies shall meet the conditions stipulated
by the Interim Measures and the CSRC.
Article 6 An overseas shareholder of a foreign investment fund management company shall
meet the following conditions:
(1) shall be a financial institution which is established and lawfully exists in accordance
with the law of the country where it is situated and has not been seriously punished
by its regulatory institution and judicial organs in the recent three years;
(2) the country where it is situated shall have perfect securities law and system of
supervision and administration, its securities regulatory institution shall have already
concluded the understanding memorandum of cooperation in securities supervisionand administration with the CSRC and maintained effective cooperative relationship
in supervision and administration;
(3) the paid -up capital shall be no less than 300 million Renminbi’s equivalent freely
convertible currency;
(4) other prudential requirements stipulated by the CSRC.
Article 7 A domestic shareholder of a foreign -invested fund management company shall meet
the qualification conditions for fund management companies ’ shareholders stipulated by the CSRC.
Article 8 The ratio of foreign investment in shares or that of the rights and benefits derived
from foreign investment in a foreign -invested fund management company shall not accumulatively
(including direct ownership and indirect ownership)  exceed 33 per cent. Within three years after our
country’s accession to the WTO, this ratio shall not exceed 49 per cent.
Overseas shareholders shall make their contributions in freely convertible currency.S/C/N/222
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Article 9 The directors, general managers and deputy general managers shall have the
qualification for acting as superior management personnel in fund management companies stipulated
by the CSRC.
Article 10 The overseas and domestic applicants of a foreign -invested fund management
company shall, in accordance with the contents  and formats stipulated by the CSRC, submit the
application materials to the CSRC.
The application materials submitted to the CSRC by the overseas and domestic applicants must be
written in Chinese. Where the documents or materials provided by the overseas shareholders and the
securities regulatory institutions where they are situated are written in foreign languages, the Chinese
translations which are consistent with the contents of the original texts shall be enclosed.
Article 11 The establishment of a fund management company by overseas and domestic
shareholders through joint contribution shall undergo such two periods as preparation and starting
business.
Article 12 The CSRC shall, within 60 working days as of official acceptance of the application
for preparing to establish a company by the overseas and domestic shareholders, make a decision of
approval or disapproval of the pr eparation. Where the preparation is approved, the approval document
shall be provided; where the preparation is disapproved, the applicants shall be notified in writing and
the reasons shall be given.
Article 13 Where major changes occur to the basic circumstances of an overseas shareholder of
a fund management company which has already obt ained the CSRC’s approval document of the
preparation but has not officially started business, or a fund management company has been punished
or supervised and controlled as a focus by the regula tory institution in the country where it is situated,
this overseas shareholder shall timely propose to convene a promoters’ meeting of the fund
management company and explain the related situation. Where the overseas shareholder does notconform to the conditions of these Rules any long er, the promoters’ meeting shall put forward the
suggestions to handle the issue and the preparatory work group shall timely report this matter to the
CSRC and deal with related matters.
Article 14 The overseas and domestic applicants shall, after completing the preparation of
establishing a fund management company, submit the application materials for the fund management
company to start business to the CSRC.
The CSRC shall, within 30 working days as of accep tance of the application for business start, make a
decision of approval, delaying approval or disappr oval. Where business start is approved, the approval
document shall be provided; where the approval is to be delayed or business start is disapproved, the
applicants shall be notified in writing and the reasons shall be given.
Article 15 Where an overseas shareholder accepts the transfer of or purchases the shares in a
domestic fund management company, the application materials shall be submitted to the CSRC by thefund management company.
The CSRC shall, within 60 working days as of official acceptance of the application, make a decision
of approval or disapproval. Where the application is approved, the approval document shall be
provided; where the application is disapproved, the applicant shall be notified in writing and the
reasons shall be given.
With respect to the examination and verification of the application regarding the newly added
shareholders and the changing of shareholders the ratio of whose contribution is highest or the number
of directors nominated by whom is most, the CSRC  shall refer to the procedures for examining and
verifying the preparation of a fund management company in implementation.S/C/N/222
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Article 16 Where the authority in the place where an overseas shareholder of a foreign -invested
fund management company is registered or its main business activities take place requires overseas
investment to be filed for the record, this over seas shareholder shall, after obtaining the CSRC’s
approval document according to law, if it submits re levant materials for the re cord to the authority in
the place where it is registered or its main business activities take place, submit the duplicates to the
CSRC at the same time.
Article 17 The shareholders of a foreign -invested fund management company shall, within
30 working days as of obtaining the CSRC’s approval document, undertake the registration of
alteration or establishment of company at the administrative agency for industry and commerce.
Article 18 Where investors from Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan region invest in shares in fund management companies, theseRules shall be referred to in application.
Article 19 Where there are no provisions regarding the matters of establishment, alteration,
termination, business activities, supervision and administration in these Rules, other relevant
provisions of the CSRC shall be applied.
Article 20 These Rules shall be implemented as of July 1, 2002.
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