The People's Republic of China Securities Investment Fund Law

Chapter I General Provisions

Chapter II Fund Manager

Chapter III Fund Custodian

Chapter IV Raising of Funds

Chapter V Trading of Fund Shares

Chapter VI Purchase and Redemption of Fund Shares

Chapter 7 The operation and information disclosure of the fund.

Chapter VIII Modification and Termination of Fund Contracts and Liquidation of Fund Assets

Chapter IX Rights of Fund Unitholders and Their Exercise

Chapter X Supervision and Administration

Chapter XI Legal Liability

Chapter XII Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is enacted in order to regulate the activities of securities investment funds, protect the legitimate rights and interests of investors and relevant parties, and promote the healthy development of securities investment funds and the securities market.

Article 2 Within the territory of the People's Republic of China, securities investment funds (hereinafter referred to as funds) raised through public offering of fund shares are managed by fund managers and managed by fund custodians. For the benefit of fund unit holders, securities investment activities are carried out in the form of asset portfolios. This law shall apply; if there are no provisions in this law, the provisions of the the People's Republic of China Trust Law, the the People's Republic of China Securities Law and other relevant laws and administrative regulations shall apply.

Article 3 The rights and obligations of the fund manager, fund custodian and fund share holders shall be stipulated in the fund contract in accordance with this Law.

The fund manager and the fund custodian shall perform their fiduciary duties in accordance with this Law and the provisions of the fund contract. Fund share holders enjoy income and bear risk according to their holdings in the Fund.

Article 4 Securities investment fund activities shall follow the principles of voluntariness, fairness, honesty and credibility, and shall not harm the interests of the State and the public interest of society.

Article 5 A fund contract shall stipulate the mode of operation of the fund. The fund may operate in a closed, open or other manner.

A fund that adopts a closed-end operation (hereinafter referred to as a closed-end fund) refers to a fund in which the total amount of approved fund shares is fixed during the term of the fund contract, and the fund shares may be traded on a securities trading place established by law, but the fund share holder may not apply for redemption.

A fund that adopts an open-end mode of operation (hereinafter referred to as an open-end fund) refers to a fund in which the total amount of fund shares is not fixed and the fund shares can be purchased or redeemed at the time and place agreed in the fund contract.

The measures for the offering, trading, subscription and redemption of fund units of funds that adopt other modes of operation shall be separately prescribed by the State Council.

Article 6 The property of the Fund shall be independent of the inherent property of the Fund Manager and the Trustee. The fund manager and the fund trustee shall not include the property of the fund in their inherent property.

The property and income obtained by the fund manager and the fund custodian as a result of the management, use or other circumstances of the fund property shall be classified as the fund property.

If the fund manager or fund custodian is liquidated due to dissolution, revocation or declaration of bankruptcy according to law, the fund property does not belong to its liquidation property.

Article 7 The claims of the property of the fund shall not be set off against the debts of the inherent property of the fund manager or the fund custodian; the claims and debts of the property of different funds shall not be set off against each other.

Article 8 No enforcement may be imposed on the property of the Fund other than for debts incurred by the property of the Fund itself.

Article 9 Fund managers and fund custodians shall exercise due diligence in the management and use of fund property and perform the obligations of honesty, trustworthiness, prudence and diligence.

Fund practitioners shall obtain fund practice qualifications in accordance with the law, abide by laws and administrative regulations, and abide by professional ethics and code of conduct.

Article 10 Fund managers, fund custodians and fund share selling institutions may establish industry associations, strengthen industry self-discipline, coordinate industry relations, provide industry services, and promote industry development.

Article 11 The securities regulatory authority under the State Council shall supervise and manage the activities of securities investment funds in accordance with the law.

Chapter II Fund Manager

Article 12 The fund manager shall be a fund management company established according to law.

To serve as a fund manager shall be approved by the securities regulatory authority under the State Council.

Article 13 The establishment of a fund management company shall meet the following conditions and be subject to the approval of the securities regulatory authority under the State Council:

The (I) has articles of association in conformity with the provisions of this Law and the Company Law of the the People's Republic of China;

The registered capital of the (II) shall not be less than RMB 0.1 billion and must be paid-in monetary capital;

The major shareholders of the (III) have good business performance and good social reputation in securities business, securities investment consulting, trust asset management or other financial asset management, have no illegal record in the last three years, and have a registered capital of not less than 0.3 billion yuan;

(IV) the number of persons who have obtained the qualifications for fund practice reaches a quorum;

The (V) has business premises, security facilities and other facilities related to fund management business that meet the requirements;

The (VI) has a sound internal audit monitoring system and risk control system;

(VII) other conditions prescribed by laws and administrative regulations and the securities regulatory authority under the State Council approved by the State Council.

Article 14 The securities regulatory authority under the State Council shall, within six months from the date of accepting the application for the establishment of a fund management company, conduct an examination in accordance with the conditions stipulated in Article 13 of this Law and the principle of prudent supervision, make a decision on approval or disapproval, and notify the applicant; if approval is not granted, the reasons shall be explained.

The establishment of a branch, the amendment of the articles of association or the change of other major matters of a fund management company shall be reported to the securities regulatory authority under the State Council for approval. The securities regulatory authority under the State Council shall, within 60 days from the date of accepting the application, make a decision on approval or disapproval, and notify the applicant; if approval is not granted, the reasons shall be explained.

Article 15 The following persons shall not serve as fund practitioners of the fund manager:

(I) has been sentenced to criminal punishment for corruption and bribery, dereliction of duty, infringement of property or undermining the order of the socialist market economy;

(II) directors, supervisors, factory directors, managers and other senior management personnel who are personally responsible for the bankruptcy liquidation of the company or enterprise in which they work due to poor management or the revocation of the business license due to violation of the law, it has not been more than five years since the date of the completion of the bankruptcy liquidation or the revocation of the business license of the company or enterprise;

The amount of debt incurred by the (III) individual is relatively large and has not been paid off at maturity;

(IV) the employees of fund managers, fund custodians, stock exchanges, securities companies, securities registration and settlement institutions, futures exchanges, futures brokerage companies and other institutions and the functionaries of state organs who have been dismissed for illegal acts;

(V) lawyers, certified public accountants, practitioners of asset appraisal institutions, verification institutions, and investment consulting practitioners whose practicing certificates have been revoked or disqualified due to illegal acts;

Other personnel who are not allowed to engage in fund business (VI) to the provisions of laws and administrative regulations.

Article 16 The manager and other senior management personnel of a fund manager shall be familiar with the laws and administrative regulations on securities investment, have the qualifications for fund practice and have more than three years of work experience related to their positions.

Article 17 The selection or re-appointment of the manager and other senior management personnel of a fund manager shall be reported to the securities regulatory authority under the State Council for examination and approval in accordance with the conditions of appointment stipulated in this Law and other relevant laws and administrative regulations.

Article 18 The directors, supervisors, managers and other practitioners of a fund manager shall not hold any position as a fund custodian or other fund manager, and shall not engage in securities trading or other activities that harm the interests of fund property and fund share holders.

Article 19 A fund manager shall perform the following duties:

(I) raise funds in accordance with the law, handle or entrust other institutions recognized by the securities regulatory authority under the State Council to handle the sale, purchase, redemption and registration of fund shares on their behalf;

(II) handle fund filing procedures;

The (III) manages and keeps separate accounts for the assets of the different funds under its management and invests in securities;

The (IV) determines the fund income distribution plan in accordance with the agreement of the fund contract and distributes the income to the fund share holders in a timely manner;

(V) the accounting of the Fund and the preparation of financial and accounting reports of the Fund;

(VI) the preparation of interim and annual fund reports;

(VII) calculating and announcing the net asset value of the Fund and determining the subscription and redemption prices for the Fund's shares;

(VIII) handle the information disclosure matters related to the fund property management business activities;

(IX) to convene a general meeting of the shareholders of the Fund;

(X) keep the records, books, statements and other relevant materials of the fund's property management activities;

(11) exercising litigation rights or carrying out other legal acts in the name of the fund manager on behalf of the interests of the fund unit holders;

(12) Other duties prescribed by the securities regulatory authority under the State Council.

Article 20 A fund manager shall not commit any of the following acts:

The (I) mixes its inherent property or the property of others with the property of the Fund to invest in securities;

(II) treat unfairly the property of the different funds under their management;

(III) use the fund property to seek benefits for a third party other than the fund share holders;

The (IV) promises gains or bears losses to the fund share holders in violation of the rules;

(V) other acts prohibited by the securities regulatory authority under the State Council in accordance with the relevant provisions of laws and administrative regulations.

Article 21 The securities regulatory authority under the State Council shall, according to its functions and powers, order a fund manager under any of the following circumstances to rectify, or cancel the qualification of fund management:

(I) major violations of laws and regulations;

The (II) no longer meets the conditions stipulated in Article 13 of this Law;

Other circumstances as prescribed by (III) laws and administrative regulations.

Article 22 Under any of the following circumstances, the duties of the fund manager shall be terminated:

The (I) is disqualified from fund management according to law;

The (II) is dismissed by the general meeting of the fund share holders;

the (III) is dissolved, revoked or declared bankrupt according to law;

(IV) other circumstances stipulated in the fund contract.

Article 23 where the duties of a fund manager are terminated, the general meeting of fund unitholders shall appoint a new fund manager within six months; before the new fund manager is elected, the securities regulatory authority under the State Council shall appoint a temporary fund manager.

If the duties of the fund manager are terminated, it shall properly keep the fund management business information, handle the transfer procedures of the fund management business in a timely manner, and the new fund manager or temporary fund manager shall receive it in a timely manner.

Article 24 Where the duties of a fund manager are terminated, an accounting firm shall be hired to audit the fund property in accordance with the provisions, and the audit results shall be announced and reported to the securities regulatory authority under the State Council for the record.

Chapter III Fund Custodian

Article 25 The custodian of a fund shall be a commercial bank established in accordance with the law and qualified for fund custody.

Article 26 An application for obtaining a fund custodian qualification shall meet the following conditions and be approved by the securities regulatory authority under the State Council and the banking regulatory authority under the State Council:

The net assets and capital adequacy ratio of the (I) comply with the relevant provisions;

The (II) has a special fund custody department;

(III) full-time personnel who have obtained the qualifications for fund practice shall have a quorum;

The (IV) has the conditions for the safe custody of the fund property;

(V) has a safe and efficient clearing and delivery system;

The (VI) has business premises, security facilities and other facilities related to the fund custody business that meet the requirements;

The (VII) has a sound internal audit monitoring system and risk control system;

(VIII) other conditions prescribed by laws and administrative regulations and by the securities regulatory authority under the State Council and the banking regulatory authority under the State Council approved by the State Council.

Article 27 The provisions of Articles 15 and 18 of this Law shall apply to the practitioners of the special fund custody department of the fund custodian.

The provisions of Articles 16 and 17 of this Law shall apply to the managers and other senior management personnel of the special fund custody department of the fund custodian.

Article 28 The fund custodian and the fund manager shall not be the same person and shall not contribute capital or hold shares to each other.

Article 29 A fund custodian shall perform the following duties:

(I) safe custody of fund property;

The (II) shall open the fund account and securities account of the fund property in accordance with the provisions;

The (III) sets up separate accounts for the property of the different funds under its custody to ensure the integrity and independence of the fund's property;

(IV) keep the records, books, statements and other relevant materials of the fund custody business activities;

The (V) shall, in accordance with the provisions of the fund contract and the investment instructions of the fund manager, handle the liquidation and delivery matters in a timely manner;

(VI) handle the information disclosure matters related to the fund custody business activities;

The (VII) issues opinions on the fund's financial accounting report, interim and annual fund reports;

(VIII) review and review the net asset value of the fund and the purchase and redemption prices of fund shares calculated by the fund manager;

The (IX) shall convene a general meeting of the holders of fund units in accordance with the provisions;

(X) supervise the investment operation of the fund manager in accordance with the provisions;

(11) Other duties prescribed by the securities regulatory authority under the State Council.

Article 30 If the fund custodian discovers that the investment instructions of the fund manager violate laws, administrative regulations and other relevant provisions, or violate the provisions of the fund contract, it shall refuse to implement them, immediately notify the fund manager, and report to the securities regulatory authority under the State Council in a timely manner.

If the fund custodian discovers that the fund manager's investment instructions that have taken effect in accordance with the trading procedures violate laws, administrative regulations and other relevant provisions, or violate the fund contract, it shall immediately notify the fund manager and report to the securities regulatory authority under the State Council in a timely manner.

Article 31 The provisions of Article 20 of this Law shall apply to fund custodians.

Article 32 The securities regulatory authority under the State Council and the banking regulatory authority under the State Council shall, according to their functions and powers, order a fund custodian to rectify or cancel the fund custodian qualification under any of the following circumstances:

(I) major violations of laws and regulations;

The (II) no longer meets the conditions provided for in Article 26 of this Law;

Other circumstances as prescribed by (III) laws and administrative regulations.

Article 33 The duties of a fund custodian shall be terminated under any of the following circumstances:

The (I) is disqualified from fund custody according to law;

The (II) is dismissed by the general meeting of the fund share holders;

the (III) is dissolved, revoked or declared bankrupt according to law;

(IV) other circumstances stipulated in the fund contract.

Article 34 If the duties of a fund custodian are terminated, the general meeting of fund unit holders shall select a new fund custodian within six months; before the new fund custodian is elected, the securities regulatory authority under the State Council shall designate a temporary fund custodian.

If the duties of the fund custodian are terminated, the fund property and fund custody business information shall be properly kept, and the transfer procedures of the fund property and fund custody business shall be handled in a timely manner, and the new fund custodian or temporary fund custodian shall receive it in a timely manner.

Article 35 Where the duties of a fund custodian are terminated, an accounting firm shall be hired to audit the fund property in accordance with the provisions, and the audit results shall be announced and reported to the securities regulatory authority under the State Council for the record.

Chapter IV Raising of Funds

Article 36 When offering fund shares and raising funds in accordance with this Law, a fund manager shall submit the following documents to the securities regulatory authority under the State Council and obtain the approval of the securities regulatory authority under the State Council:

(I) application report;

Draft (II) Fund Contract;

Draft (III) Fund Custody Agreement;

Draft (IV) Prospectus;

(V) the qualification documents of the fund manager and the fund custodian;

(VI) the financial and accounting reports of the fund manager and fund custodian audited by an accounting firm for the last three years or since its establishment;

Legal opinions issued by (VII) law firms;

Other documents submitted in (VIII) with the provisions of the securities regulatory authority under the State Council.

Article 37 A fund contract shall include the following contents:

The purpose of the (I) to raise funds and the name of the fund;

The names and domiciles of (II) fund managers and fund custodians;

the mode of operation of the (III) fund;

(IV) the total amount of shares of a closed-end fund and the duration of the fund contract, or the total amount of the minimum shares raised by an open-end fund;

The principle of (V) determining the date, price and fee of the offering of the Fund's shares;

(VI) the rights and obligations of the fund share holders, fund managers and fund custodians;

(VII) the procedures and rules for convening, deliberating and voting at the general meeting of fund share holders;

(VIII) the procedures, time and place for the sale, trading, subscription and redemption of the Fund's shares, the manner in which the fees are calculated, and the time and manner in which the redemption proceeds are paid;

The principle of income distribution of the (IX) fund and the mode of implementation;

The withdrawal, payment method and proportion of the management fee and custody fee of the (X) as the remuneration of the fund manager and the fund custodian;

(11) The method of withdrawal and payment of other expenses related to the management and use of the fund's property;

(12) The investment direction and investment restrictions of the fund property;

(xiii) The method of calculating the net asset value of the Fund and the manner in which it is announced;

(xiv) Treatment of fund raising that does not meet the statutory requirements;

(xv) The causes and procedures for the termination and termination of the fund contract and the manner in which the fund property is liquidated;

(16) Dispute resolution methods;

(17) Other matters agreed upon by the parties.

Article 38 The fund prospectus shall include the following contents:

The name of the approval document and the date of approval of the (I) fund raising application;

(II) the basic information of the fund manager and the fund custodian;

A summary of the contents of the (III) fund contract and fund custody agreement;

the offering date, price, fee and term of the (IV) Fund Shares;

The method of offering the shares of the (V) Fund, the name of the offering institution and the registration institution;

The name and domicile of the law firm (VI) to issue the legal opinion and the accounting firm auditing the fund property;

(VII) the method and proportion of withdrawal, payment of the remuneration and other related expenses of the fund manager and the fund custodian;

(VIII) risk warning content;

(IX) other contents as prescribed by the securities regulatory authority under the State Council.

Article 39 The securities regulatory authority under the State Council shall, within six months from the date of accepting an application for fund raising, conduct an examination in accordance with laws, administrative regulations, the provisions of the securities regulatory authority under the State Council and the principle of prudent supervision, make a decision on approval or disapproval, and notify the applicant; if the application is not approved, the reasons shall be explained.

Article 40 The shares of the fund may not be offered until the application for fund raising has been approved.

Article 41 The sale of fund shares shall be handled by the fund manager; the fund manager may entrust other institutions recognized by the securities regulatory authority under the State Council to handle the sale on its behalf.

Article 42 The fund manager shall publish the prospectus, the fund contract and other relevant documents three days before the offering of the fund shares.

The documents specified in the preceding paragraph shall be true, accurate and complete.

The publicity and promotion activities for fund raising shall comply with the provisions of relevant laws and administrative regulations, and shall not have the acts listed in Article 64 of this law.

Article 43 The fund manager shall raise funds within six months from the date of receipt of the approval documents. If there is no substantial change in the originally approved matters, it shall be reported to the securities regulatory authority under the State Council for the record; if there is a substantial change, the application shall be resubmitted to the securities regulatory authority under the State Council.

The fund raising shall not exceed the fund raising period approved by the securities regulatory authority under the State Council. The fund raising period shall be calculated from the date of offering the fund shares.

Article 44 When the fund raising period expires, the total amount of fund shares raised by a closed-end fund reaches more than 80% of the approved scale, the total amount of fund shares raised by an open-end fund exceeds the approved minimum total amount, and the number of fund share holders meets the requirements of the securities regulatory authority under the State Council, the fund manager shall, within 10 days from the date of expiration of the fund raising period, employ a statutory capital verification institution to verify the capital, submit a capital verification report to the securities regulatory authority under the State Council, go through the fund filing procedures, and make a public announcement.

Article 45 The funds raised during the fund-raising period shall be deposited into a special account and shall not be used by anyone until the fund-raising act is completed.

Article 46 The fund contract shall be established when the investor pays the amount of the subscribed fund shares; the fund manager shall, in accordance with the provisions of Article 44 of this Law, go through the fund filing procedures with the securities regulatory authority under the State Council, and the fund contract shall become effective.

If the fund collection period expires and the conditions stipulated in Article 44 of this Law cannot be met, the fund manager shall bear the following responsibilities:

The (I) shall bear the debts and expenses arising from the collection act with its inherent property;

The (II) shall return the amount paid by the investor within 30 days after the expiration of the fund raising period, plus the interest on the bank's deposits for the same period.

Chapter V Trading of Fund Shares

Article 47 The fund shares of a closed-end fund may be listed and traded on a stock exchange upon application by the fund manager and approval by the securities regulatory authority under the State Council.

The securities regulatory authority under the State Council may authorize the stock exchange to approve the listing and trading of fund shares in accordance with the statutory conditions and procedures.

Article 48 The following conditions shall be met for the listing and trading of fund shares:

The raising of (I) funds shall comply with the provisions of this Law;

The term of the (II) fund contract is more than five years;

The amount of (III) fund raised shall not be less than 0.2 billion yuan;

No less than 1,000 (IV) fund share holders;

(V) other conditions stipulated in the rules for listing and trading of fund shares.

Article 49 The rules for the listing and trading of fund units shall be formulated by the stock exchange and submitted to the securities regulatory authority under the State Council for approval.

Article 50 After the listing and trading of fund units, if any of the following circumstances occurs, the stock exchange shall terminate the listing and transaction, and report to the securities regulatory authority under the State Council for the record:

The (I) no longer meets the conditions for listing and trading as stipulated in Article 48 of this Law;

The term of the (II) fund contract expires;

(III) the general meeting of fund share holders decides to terminate the listing transaction in advance;

(IV) other circumstances for the termination of listing transactions as agreed in the fund contract or as stipulated in the rules for listing and trading of fund shares.

Chapter VI Purchase and Redemption of Fund Shares

Article 51 The fund manager shall be responsible for the purchase, redemption and registration of fund shares of an open-end fund; the fund manager may entrust other institutions recognized by the securities regulatory authority under the State Council to handle the matter on its behalf.

Article 52 The fund manager shall handle the subscription and redemption of fund shares on each working day; if the fund contract stipulates otherwise, it shall follow its agreement.

Article 53 The fund manager shall pay the redemption money on time, except in the following circumstances:

(I) the Fund Manager is unable to make redemption payments due to force majeure;

Temporary suspension of the market by the decision of the (II) stock exchange in accordance with the law, resulting in the inability of the fund manager to calculate the net asset value of the fund on that day;

(III) other special circumstances as stipulated in the fund contract.

In the event of one of the above-mentioned circumstances, the fund manager shall report to the securities regulatory authority under the State Council for the record.

After the circumstances specified in the first paragraph of this article disappear, the fund manager shall pay the redemption money in a timely manner.

Article 54 An open-end fund shall maintain sufficient cash or government bonds for the payment of redemption payments to fund share holders. The specific proportion of cash or government bonds to be maintained in the fund property shall be prescribed by the securities regulatory authority under the State Council.

Article 55 The purchase and redemption prices of fund shares shall be calculated on the basis of the net value of fund shares on the date of purchase and redemption plus or minus relevant expenses.

Article 56 When there is an error in the valuation of the net value of fund shares, the fund manager shall immediately correct it and take reasonable measures to prevent further losses. When the valuation error reaches the 0.5% of the net value of the fund shares, the fund manager shall make a public announcement and report it to the securities regulatory authority under the State Council for the record.

If the fund share holder loses due to the wrong valuation of the net value of the fund share, the fund share holder has the right to demand compensation from the fund manager and the fund custodian.

Chapter 7 The operation and information disclosure of the fund.

Article 57 The fund manager shall use the fund property to invest in securities by means of a portfolio of assets.

The specific mode and investment proportion of the asset portfolio shall be stipulated in the fund contract in accordance with this Law and the provisions of the securities regulatory authority under the State Council.

Article 58 Fund assets shall be used for the following investments:

(I) listed stocks and bonds;

(II) other securities as prescribed by the securities regulatory authority under the State Council.

Article 59 Fund assets shall not be used for the following investments or activities:

(I) underwriting of securities;

(II) loans or guarantees to others;

(III) engage in investments with unlimited liability;

(IV) buy and sell shares of other funds, except as otherwise provided by the State Council;

(V) make capital contributions to the fund manager or fund custodian or buy or sell stocks or bonds issued by the fund manager or fund custodian;

(VI) buy or sell securities issued by shareholders who have a controlling relationship with their fund managers or fund custodians or by companies that have other material interests with their fund managers or fund custodians, or securities underwritten during the underwriting period;

(VII) engaging in insider trading, manipulating securities trading prices and other improper securities trading activities;

(VIII) other activities prohibited by the securities regulatory authority under the State Council in accordance with the relevant provisions of laws and administrative regulations.

Article 60 Fund managers, fund custodians and other fund information disclosure obligors shall disclose fund information in accordance with the law and ensure the authenticity, accuracy and completeness of the disclosed information.

Article 61 The obligor of fund information disclosure shall ensure that the fund information to be disclosed is disclosed within the time prescribed by the securities regulatory authority under the State Council, and that investors can consult or copy the publicly disclosed information in accordance with the time and manner stipulated in the fund contract.

Article 62 Public disclosure of fund information includes:

(I) fund prospectus, fund contract, fund custody agreement;

(II) fund raising;

Announcement on the listing and trading of (III) fund shares;

(IV) the net asset value of the Fund and the net value of the Fund's shares;

(V) the subscription and redemption prices of fund shares;

Quarterly reports on the portfolio of assets of the (VI) Fund, financial and accounting reports and interim and annual fund reports;

(VII) interim report;

(VIII) the resolution of the general meeting of the fund share holders;

(IX) major personnel changes in the special fund custody department of the fund manager and fund custodian;

(X) litigation involving the fund manager, fund property and fund custody business;

(11) Other information required to be disclosed by the securities regulatory authority under the State Council in accordance with the relevant provisions of laws and administrative regulations.

Article 63 An accounting firm or law firm that issues an audit report or legal opinion on publicly disclosed fund information shall ensure the authenticity, accuracy and completeness of the contents of the documents issued by it.

Article 64 Public disclosure of fund information shall not be subject to the following acts:

(I) false records, misleading statements or material omissions;

(II) the forecast of securities investment performance;

(III) breach of the promise of gains or to bear losses;

(IV) defame other fund managers, fund custodians or fund share selling institutions;

(V) other acts prohibited by the securities regulatory authority under the State Council in accordance with the relevant provisions of laws and administrative regulations.

Chapter VIII Modification and Termination of Fund Contracts and Liquidation of Fund Assets

Article 65 In accordance with the provisions of the fund contract or the resolution of the fund share holders' meeting, and with the approval of the securities regulatory authority under the State Council, the mode of operation of the fund may be changed.

Article 66 The expansion or extension of the term of the fund contract of a closed-end fund shall meet the following conditions and shall be subject to the approval of the securities regulatory authority under the State Council:

(I) fund operating performance is good;

(II) fund managers have not been subject to administrative or criminal penalties for violations of laws and regulations within the last two years;

Adoption of a resolution of the general meeting of (III) Fund Unitholders;

(IV) other conditions stipulated in this Law.

Article 67 A fund contract shall be terminated under any of the following circumstances:

The term of the (I) fund contract expires without extension;

(II) the decision of the general meeting of the holders of fund units to terminate;

The duties of the (III) fund manager or fund custodian are terminated, and no new fund manager or new fund custodian takes over within six months;

(IV) other circumstances stipulated in the fund contract.

Article 68 Upon the termination of a fund contract, the fund manager shall organize a liquidation group to liquidate the assets of the fund.

The liquidation group consists of the fund manager, the fund custodian and the relevant intermediary service institutions.

The liquidation report made by the liquidation group shall be audited by the accounting firm and the legal opinion issued by the law firm shall be submitted to the securities regulatory authority under the State Council for the record and announced.

Article 69 The remaining fund property after liquidation shall be distributed in proportion to the shares held by the fund share holders.

Chapter IX Rights of Fund Unitholders and Their Exercise

Article 70 Holders of fund shares shall enjoy the following rights:

(I) share the fund property income;

(II) participate in the distribution of the remaining fund assets after liquidation;

(III) transfer or apply for redemption of the fund shares held by it in accordance with the law;

The (IV) shall convene a general meeting of the holders of fund units in accordance with the relevant provisions;

(V) exercise the right to vote on matters considered by the general meeting of fund share holders;

(VI) consulting or copying publicly disclosed fund information;

(VII) file a lawsuit against the fund manager, the fund custodian and the fund share selling institution for any act that harms their legitimate rights and interests;

(VIII) other rights stipulated in the fund contract.

Article 71 The following matters shall be deliberated and decided by convening a general meeting of fund share holders:

(I) early termination of the fund contract;

(II) fund expansion or extension of the term of the fund contract;

the mode of operation of the (III) conversion fund;

(IV) raising the standard of remuneration of fund managers and fund custodians;

(V) change of fund managers and fund custodians;

(VI) other matters agreed upon in the fund contract.

Article 72 the general meeting of fund unitholders shall be convened by the fund manager; if the fund manager fails to convene or cannot convene in accordance with the provisions, it shall be convened by the fund custodian.

If a fund share holder representing more than 10% of the fund share requests to convene a general meeting of fund share holders on the same matter, but neither the fund manager nor the fund custodian shall convene it, the fund share holder representing more than 10% of the fund share shall have the right to convene it on his own and report it to the securities regulatory authority under the State Council for the record.

Article 73 When a general meeting of fund unitholders is convened, the convener shall announce at least 30 days in advance the time, form of the meeting, matters for consideration, proceedings and voting methods of the general meeting of fund unitholders.

The general meeting of fund share holders shall not vote on matters that have not been announced.

Article 74 The general meeting of fund share holders may be held on the spot or by means of communication.

Each fund share has one vote, and the fund share holder may entrust an agent to attend the general meeting of the fund share holders and exercise the right to vote.

Article 75 the general meeting of fund unitholders shall be held only when the holders representing more than 50% fund units attend; the decision on the matters under consideration at the general meeting shall be approved by more than 50% of the voting rights held by the fund unitholders attending the general meeting; however, the conversion of fund operation mode, the replacement of fund manager or fund custodian and the early termination of fund contract shall be approved by more than 2/3 of the voting rights held by the fund unitholders attending the general meeting.

The matters decided by the general meeting of fund share holders shall be reported to the securities regulatory authority under the State Council for approval or for the record, and shall be announced.

Chapter X Supervision and Administration

Article 76 The securities regulatory authority under the State Council shall perform the following duties according to law:

The (I) shall formulate rules and regulations on the supervision and management of securities investment fund activities in accordance with the law, and exercise the power of examination and approval or approval in accordance with the law;

(II) fund filing;

(III) supervise and manage the activities of fund managers, fund custodians and other institutions engaged in securities investment funds, investigate and deal with illegal acts, and make public announcements;

(IV) formulate the qualification standards and code of conduct for fund practitioners and supervise their implementation;

(V) supervise and inspect the disclosure of fund information;

(VI) direct and supervise the activities of the Fund Association;

(VII) other duties prescribed by laws and administrative regulations.

Article 77 The securities regulatory authority under the State Council shall have the right to take the following measures to perform its duties in accordance with the law:

(I) entering the place where the illegal act occurred to investigate and collect evidence;

(II) interrogate the parties and the units and individuals related to the incident under investigation and require them to explain the matters related to the incident under investigation;

(III) consult and copy the securities transaction records, registration and transfer records, financial and accounting materials and other relevant documents and materials of the parties and units and individuals related to the investigation, and seal up the documents and materials that may be transferred or concealed;

(IV) inquire into the fund accounts, securities accounts or fund accounts of the parties concerned and the units and individuals related to the incident under investigation, and if there is evidence to prove that there are signs of transferring or concealing illegal funds or securities, they may apply to the judicial organs to freeze them;

(V) other measures prescribed by laws and administrative regulations.

Article 78 When performing their duties according to law, the staff members of the securities regulatory body under the State Council shall not be less than two, and shall show their legal certificates; they shall have the obligation to keep confidential the trade secrets they come to know during the investigation or inspection.

Article 79 Staff members of the securities regulatory body under the State Council shall be devoted to their duties, act in accordance with the law, be fair and honest, accept supervision, and shall not take advantage of their positions for personal gain.

Article 80 When the securities regulatory authority under the State Council performs its duties in accordance with the law, the units and individuals under investigation and inspection shall cooperate and truthfully provide relevant documents and materials, and shall not refuse, hinder or conceal them.

Article 81 If the securities regulatory authority under the State Council performs its duties in accordance with the law and discovers that an illegal act is suspected of being a crime, it shall transfer the case to the judicial organ for handling.

Article 82 Staff members of the securities regulatory body under the State Council shall not concurrently hold positions in the institutions under supervision.

Chapter XI Legal Liability

Article 83: In the process of performing their respective duties, the fund manager or fund custodian violates the provisions of this law or the fund contract and causes damage to the fund property or fund unit holders, they shall bear their respective actions in accordance with the law. Liability for compensation; if a joint act causes damage to the fund property or fund unit holders, it shall bear joint and several liability for compensation.

Article 84 Anyone who, in violation of the provisions of Article 45 of this Law, uses the funds raised shall be ordered to return and the illegal income shall be confiscated; if the illegal income is more than 500,000 yuan, a fine of not less than one time and not more than five times the illegal income shall be imposed; if there is no illegal income or the illegal income is less than 500,000 yuan, a fine of not less than 50,000 yuan and not more than 500,000 yuan shall be imposed; the person directly responsible shall be given a warning, and impose a fine of 30,000 yuan up to 300,000 yuan; if damage is caused to investors, they shall be liable for compensation according to law; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 85 Anyone who raises funds without the approval of the securities regulatory authority under the State Council shall be ordered to stop, return the funds raised and the additional interest on bank deposits for the same period, confiscate the illegal income, and impose a fine of not less than 1% and not more than 5%; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 86 Anyone who, in violation of the provisions of this Law, establishes a fund management company without approval shall be banned by the securities regulatory authority and imposed a fine of not less than 50,000 yuan but not more than 500,000 yuan; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 87 whoever engages in fund management business or fund custody business without the approval of the securities regulatory authority under the State Council shall be ordered to stop and the illegal income shall be confiscated; if the illegal income is more than 1 million yuan, a fine of not less than one time but not more than five times the illegal income shall be imposed; if there is no illegal income or the illegal income is less than one million yuan, a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed. Caused to one million yuan, bear the liability for compensation according to law; give a warning to the person in charge and other persons directly responsible, and impose a fine of not less than 30,000 yuan but not more than 300,000 yuan; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 88 If a fund manager or fund custodian, in violation of the provisions of this Law, fails to manage or keep the fund property separately, or misappropriates the fund property for other purposes, it shall be ordered to make corrections and be fined not less than 50000 yuan but not more than 500000 yuan; if it causes damage to the fund property or fund share holders, it shall be liable for compensation according to law; the person in charge and other persons directly responsible shall be warned, Suspended or canceled, and impose a fine of 30,000 yuan to 300,000 yuan; If a crime is constituted, criminal responsibility shall be investigated according to law.

The property and income obtained by the fund manager and the trustee of the fund from the misappropriation of the property of the fund shall be classified as the property of the fund. However, if there are other provisions in laws and administrative regulations, such provisions shall prevail.

Article 89 If a fund manager or fund custodian commits one of the acts listed in Article 20 of this Law, he shall be ordered to make corrections and the illegal income shall be confiscated; if the illegal income is more than one million yuan, he shall be fined not less than one time but not more than five times the illegal income; if there is no illegal income or the illegal income is less than one million yuan, he shall be liable for compensation according to law; the person in charge and other persons directly responsible shall be given a warning, the qualification of fund practice shall be suspended or canceled, and a fine of not less than 30000 yuan but not more than 300000 yuan shall be imposed; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 90 if a fund manager or fund custodian commits one of the acts listed in subparagraphs 1 to 6 and 8 of Article 59 of this Law, he shall be ordered to make corrections and be fined not less than 100,000 yuan but not more than 1 million yuan; if damage is caused to fund property or fund share holders, he shall be liable for compensation in accordance with the law; the person in charge and other persons directly responsible shall be warned, and the qualification of fund practice shall be suspended or canceled, and impose a fine of 30,000 yuan to 300,000 yuan; If a crime is constituted, criminal responsibility shall be investigated according to law.

The property and income obtained by the fund manager and the fund custodian from the use of the fund property in the preceding paragraph shall be classified as the fund property. However, if there are other provisions in laws and administrative regulations, such provisions shall prevail.

Article 91: If a fund manager or fund custodian has committed the acts specified in Item 7 of Article 59 of this Law, in addition to being punished in accordance with the relevant provisions of the the People's Republic of China Securities Law, the directly responsible person in charge and other directly responsible personnel Give a warning, suspend or cancel the qualification of fund practice, and impose a fine of 30,000 yuan up to 300,000 yuan; if damage is caused to fund property or fund unit holders, they shall be liable for compensation according to law.

Article 92 If a fund manager or fund custodian, in violation of the provisions of this Law, contributes capital to each other or holds shares, it shall be ordered to make corrections and may be fined not more than 100,000 yuan.

Article 93: Where a fund information disclosure obligor fails to disclose fund information in accordance with the law or the disclosed information contains false records, misleading statements or major omissions, it shall be ordered to make corrections, the illegal income shall be confiscated, and a fine of 100,000 yuan to 1 million yuan shall be imposed; If damage is caused to the fund share holders, they shall be liable for compensation in accordance with the law; the directly responsible person in charge and other directly responsible persons shall be given a warning, suspend or cancel the fund qualification, and impose a fine of 30,000 yuan to 300,000 yuan; If a crime is constituted, criminal responsibility shall be investigated according to law.

Article 94: If a professional institution that issues audit reports, legal opinions and other documents for the fund information publicly disclosed by the fund information disclosure obligor falsifies the content of the fund information it is responsible for, it shall be ordered to make corrections, the illegal income shall be confiscated, and the illegal income shall be imposed. Fines of more than five times; if the circumstances are serious, they shall be ordered to suspend business, suspend or cancel the relevant qualifications of the directly responsible person; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 95 If the fund manager or fund custodian fails to convene a general meeting of fund unit holders in accordance with the regulations, it shall be ordered to make corrections and may be fined not more than 50,000 yuan; the directly responsible person in charge and other directly responsible persons shall be given a warning and suspended Or cancel the qualification of fund practitioners.

Article 96 If a fund manager or fund custodian violates the provisions of this Law and the circumstances are serious, he shall be disqualified from fund management or fund custodian according to law.

Article 97 If the employees of the special fund custody department of the fund manager or fund custodian violate the provisions of Article 18 of this law and cause damage to the fund property or fund share holders, they shall be liable for compensation according to law; if the circumstances are serious, they shall be disqualified from fund practice; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 98 Any staff member of a securities regulatory body who neglects his duty, abuses his power, engages in malpractices for personal gain, or takes advantage of his position to solicit or accept property from others shall be given administrative sanctions in accordance with the law; if the case constitutes a crime, he shall be investigated for criminal responsibility in accordance with the law.

Article 99 If a person violates the provisions of this Law and shall bear civil liability for compensation and pay fines or penalties, but his property is insufficient to pay at the same time, he shall bear civil liability for compensation first.

Article 100 In accordance with the provisions of this Law, the civil liability for compensation and the fines and penalties paid by the fund manager and the fund custodian shall be borne by the fund manager and the fund custodian with their inherent property.

All fines and penalties collected in accordance with the law and confiscated illegal income shall be turned over to the State Treasury.

Chapter XII Supplementary Provisions

Article 101 The specific administrative measures for fund management companies or other institutions approved by the State Council to raise funds from specific objects or accept the entrustment of specific objects to engage in securities investment activities shall be separately prescribed by the State Council in accordance with the principles of this Law.

Article 102 The administrative measures for raising funds through public issuance of shares, establishing securities investment companies, engaging in securities investment and other activities shall be separately formulated by the State Council.

Article 103 This Law shall come into force as of June 1, 2004.