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.

The ECB has already attempted to ease credit conditions by purchasing high quality asset backed securities. It has bought securities backed by cash flows from private sector mortgages, so called covered bonds, and it has floated the idea of buying corporate bonds and multilateral securities issued by the European Investment Bank.

Capital contribution from shareholder of securities firms should be verified with evidence by accounting firm with related qualification of securities and futures the nonmonetary property should be evaluated by assets evaluation agency with securities related qualification.

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.

(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

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.

In fact, short term portfolio investments imply increased volatility and create risks for national balance of payments and foreign exchange markets

Insecuritization

(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

Section 4 Securities Assets Management Business

The non monetary property amount shall not exceed 30 of registered capital of securities firms.

Article 45 A securities firm can be engaged in securities assets management business by accepting customer s entrustment or using customer s assets according to the Securities Law and this Regulation.

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.

(4) Where the investment scopes or investment proportions of the security self operation business and portfolio management business of a securities firm are not conformed to 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

Article 80 Where a securities firm entices its clients to conduct unnecessary security trading or uses assets of its clients to take unnecessary security trading in its dealing with portfolio management business, it shall be punished according to the provisions prescribed in Article 210 of the Securities Law of the People s Republic of China.

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 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.

Particularly in the form of short term loans and portfolio equity, these inflows could be highly unstable and an unreliable source of development finance.

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

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

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.

Real property, securities and wages are types of asset that are subject to an outright exclusion.

(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 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.

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.

(e) The transfer of security rights in, sale, loan or holding of or agreement to repurchase securities or other financial assets or instruments held with an intermediary

Overexpenditure of small capitalization fees

Article 31 If a securities firm is engaged in such businesses as securities assets management and capital and securities financing, it should develop reconciliation statement and send it to customers on monthly basis.

(b) (i) Transactions on a regulated exchange (ii) foreign exchange transactions (iii) inter bank payment systems, inter bank payment agreements or clearance and settlement systems relating to securities or other financial assets or instruments (iv) the transfer of security rights in sale, loan or holding of or agreement to repurchase securities or other financial assets or instruments held with an intermediary.

Investors are buying long term bonds at the current low interest rates because the interest rate on short term investments is now close to zero. In other words, buyers are getting an additional 2 current yield in exchange for assuming the risk of holding long term bonds.

(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.

Adding 400 billion would increase the pool substantially. Together with asset backed securities, covered bonds, and corporate bonds, 1 trillion of assets the threshold widely thought to make quantitative easing by the ECB credible would be available for purchase.

To carry out the mission and achieve the Fund's goals and objectives, the Investment Section of the Investment Management Service actively manages portfolios of equity, fixed income, real estate and short term investments, constantly analysing capital markets and investment opportunities.

Article 15 If a securities firm is to be merged or divided, its major assets transfer that relates to customer s interests should be evaluated by assets evaluation agency with securities related qualification.

83. The liquidity ratio determines an organization s ability to honour its short term liabilities from short term assets.

3 Engage in unnecessary securities trade by using customer s assets

Article 47 If a securities firm is engaged in collective investment by using assets of multiple customers or specially invests customer s assets into particular target products, it should comply with related prescription of the securities regulatory agency under the State Council and report to the securities regulatory agency under the State Council for approval.

Total 151.59 49. These funds were invested in short term time deposits ( 97.5 million) bonds and notes ( 53.7 million), which are longer term investments and call accounts ( 0.4 million) for immediate access.

The securities broker should have securities working qualification.

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.

Article 58 A securities firm that carries out securities assets management business shall hand the customer trust assets over to the custody of the designated bank as stipulated in Item 4 of Article 57 of this Regulation or other assets custodian organs recognized by the securities regulatory agency under the State Council.

1 Hold no less than 5 of the registered capital of the securities firm upon subscription or acquisition of the equity of the securities firm or

Here is how the arithmetic works for an investor who rolls over ten year bonds for the next five years, thus earning 2 more each year than he would by investing in Treasury bills or bank deposits. Assume that the interest rate on ten year bonds remains unchanged for the next five years and then rises from 2 to 5 .