Article 50 A securities firm that carries out securities lending and borrowing business shall sign a securities lending and borrowing contract with the customer, and shall open a customer securities guarantee account with the securities registration and settlement organs, and a customer funds guarantee account with the designated commercial bank in the name of the securities firm in accordance with the provisions of the securities regulatory agency under the State Council.

(2) Where any shareholder and actual holder of a securities firm force, incite, assist or accept the securities firm to provide financing or warranty with assets of stock brokerage clients or stock asset management clients

Article 61 The securities firm shall not provide financing or warranty to other people using the assets of the securities brokerage customers or securities assets management customers.

The agency appointed by securities regulatory agency under the State Council should perform supervision and administration roles and responsibilities within the scope of authorization from the securities regulatory agency under the State Council.

(3) Where a securities firm does not report its security self operation accounts or portfolio accounts of its clients to a security exchange for file according to provisions

(5) Where an asset management agency and a securities registration and clearing agency does not report to the securities regulatory agency of the State Council when it finds trust funds and assets and securities in secured accounts of clients are used in violation of provisions.

4 Trade between self run securities account and securities assets management account, or among different securities assets management accounts, and has no sufficient evidence proving that it has legally realized effective separation

Securities can be used as the deposit.

If the securities firm closes all securities business, disbands, goes bankruptcy or revokes domestic branch, it should publicize in newspaper appointed by the securities regulatory agency under the State Council and submit securities business license to the securities regulatory agency under the State Council for deregistration based on regulation.

The assets custodian organs shall perform duties of safeguarding the customer s trust assets, handling the collection and payment of the funds and supervising the investment activities of the securities firm according to the provisions of the securities regulatory agency under the State Council and the securities assets management contract.

The deposit given by the customer, all the securities that have been purchased through securities lending and borrowing, and all the funds from the sales of securities are collaterals to the securities firm, and shall be deposit to the customer securities guarantee account or the customer funds guarantee account and credited to the customer s credit granting account.

Article 82 Where a securities firm conducts trading between its security self operation accounts and portfolio management accounts, or between different portfolio management accounts, and has no sufficient evidences to prove effective separation of these accounts is realized according to laws, it shall be punished according to the provisions prescribed in Article 220 of the Securities Law of the People s Republic of China.

If a securities firm is engaged in securities assets management business, it should sign securities assets management contract with customers, defining investment scope, investment ratio, management period, management cost and so on.

Securities account opened by the securities firm for securities assets management customer should be submitted to stock exchange for filing within 3 trading days.

Article 76 A securities firm shall undertake real time monitoring on trading behaviors of its self operation accounts and portfolio management accounts.

Article 41 A securities firm engaged in securities business for its own account is limited to trading of legally issued stocks, bonds, warrants, securities investment funds or other securities recognized by the securities regulatory agency under the State Council.

No units or individuals shall force, incite, assist or accept the securities firm to provide financing or warranty with the assets of the securities brokerage customers or securities assets management customers.

(3) Where a securities firm, an asset management agency, a securities registration and clearing agency use trading settlement funds, trust funds and funds and securities in secured accounts of clients in violation of provisions

Article 11 A securities firm should have three officers or more, who should have held management position in the securities industry for at least two years.

(4) Deposit banks, designated commercial banks, asset management agencies, security exchanges, securities registration and clearing agencies of a securities firm

The types of securities that can be lent to the customer by the securities firm and can be bought with the funds lent to the customer by the securities firm, the types and coefficient of the securities that can be used as deposit, the time limit for securities lending and borrowing, the minimum guarantee maintenance ratio and the time limit for making up the difference shall be determined by the stock exchange.

Article 6 The securities regulatory agency under the State Council should perform supervision and administration roles and responsibilities of securities firm within the law.

Regulation on Supervision and Administration of Securities Firms

Insecuritization

Thus, insurance was required only against failure of the custodian bank before the securities were registered in the name of the United Nations the securities at risk at any particular time represented only a fraction of the total assets of the Fund.

Specific measures shall be formulated by the securities regulatory agency under the State Council.

Would St. Paul play the stock market?

Article 32 A securities firm should establish information inquiring system to ensure customers inquiring entrustment record, trading record, securities and balance during business hours of the securities firm, as well as other information such as name, practice license of the business operator and securities broker of the securities firm, certificate number of securities broker, etc.

Section 4 Securities Assets Management Business

China Securities Regulatory Commission

Except for circumstances prescribed in Article 54 of this Regulation or other agreements reached by the securities firm and customers according to law, the securities firm shall not use the securities or fund in the customer guarantee accounts.

The fees represent payments to six small capitalization managers, which manage portfolios of different sizes in various parts of the world.

Article 46 A securities firm engaged in securities assets management business shall not have the following act

The securities regulatory agency under the State Council can enquire the bank accounts of a securities firm and enterprises controlled or actually controlled by the securities firm with approval of a person responsible of the securities regulatory agency under the State Council with a view to make a thorough investigation of business and financial status of the securities firm.

Article 1 This Regulation is formulated with the purpose of strengthening supervision and administration of securities firms, standardize their behaviors, prevent their risks, protect legal rights and interests of customers, and promote healthy development of the securities industry according to the Company Law of People s Republic of China (hereinafter referred to as the Company Law) and the Securities Law of People s Republic of China (hereinafter referred to as the Securities Law).

Article 48 Securities lending and borrowing referred to in this article means that in the securities trading at the stock exchange or other securities trading places that have been approved by the State Council, securities firms lend capital or securities to customers for them to buy or sell securities based on the corresponding collaterals provided by the customers.

For example, in the United States of America, securities regulators estimate that securities and commodities fraud totals approximately 40 billion a year.

A domestic brokerage analyst said that the Orient Securities in Hong Kong did not enjoy a good foundation. Only its capital management business is its strength. It has many inherent problems compared with Bank of China International and CITIC Securities, etc.

Article 29 The securities firm that is engaged in securities assets management business, capital and securities financing business, securities related finance product sales should get knowledge of identity, property, income status, securities investment experience and risk preference of customers according to prescribed procedure, and record as well as keep the information in written or electronic form.

5 Other items required by the securities regulatory agency under the State Council to prescribe in company regulation.

Article 44 If a securities firm is engaged in self run securities business, its risk controlling indicators such as ratio of total securities value and company net capital, ratio of value of one type of securities and net corporate capital, and ratio of quantity of one type of securities and total issuing quantity of this type of securities should comply with prescription of the securities regulatory agency under the State Council.

After a securities firm acquiring business license for the securities or domestic branch issued or changed by the corporate registration agency, it should apply to the securities regulatory agency under the State Council for issuing or changing license for securities business.

Article 8 Setting up a securities firm requires meeting the conditions prescribed in the Company Law, the Securities Law as well as this Regulation, and approval from securities regulatory agency under the State Council.

Specific measures for administration shall be formulated by the securities regulatory agency under the State Council.

Article 20 If a securities firm has two or more kinds of securities brokerage business, securities assets management business, financing with capital and securities, securities underwriting, securities sponsors, its board should set up remuneration and nomination committee, auditing committee and risk control committee to perform rights prescribed in company regulation.