Administrative Measures for Securities Investment Fund Custody Business
Administrative Measures for Securities Investment Fund Custody Business
Administrative Measures for Securities Investment Fund Custody Business
Order of the China Securities Regulatory Commission No.172
July 10, 2020
The Administrative Measures for Securities Investment Fund Custody Business, adopted at the Sixth Commission Meeting of 2020 of the China Securities Regulatory Commission upon deliberation on July 7, 2020, are hereby promulgated and shall come into effect as of the date of promulgation.
Yi Huiman, Chairman of the China Securities Regulatory Commission
Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission
Administrative Measures for Securities Investment Fund Custody Business
Chapter I General Provisions
Article 1 These Measures are enacted in accordance with the Securities Law, the Law on Securities Investment Funds, the Law on Banking Regulation and other pertinent laws and administrative regulations with a view to regulating the securities investment fund custody business, maintaining the competition order of the securities investment fund custody business, protecting the legitimate rights and interests of fund unit holders and relevant parties, and promoting the sound development of securities investment funds.
Article 2 For the purpose of these Measures, custody of securities investment funds (hereinafter referred to as "funds") refers to the acts of performing such duties to funds as safekeeping fund property, handling clearing and settlement, rechecking and reviewing information on net value, conducting investment supervision and convening a general meeting of fund unit holders in accordance with pertinent laws and regulations as well as fund contracts by legally established commercial banks or other financial institutions with the fund custody qualification that act as custodians.
Article 3 Commercial banks and other financial institutions intending to engage in the fund custody business shall, with the approval of the China Securities Regulatory Commission (hereinafter referred to as the "CSRC"), legally obtain the qualification for fund custody.
An institution without the qualification for fund custody may not engage in the fund custody business.
Article 4 Fund custodians shall, abide by the provisions of laws and regulations as well as the stipulations of fund contracts and fund custody agreements, observe professional ethics and codes of conduct, act in good faith with prudence and diligence, and perform the fund custody duties for the interests of fund unit holders.
Article 5 Senior executives and other practitioners of the fund custody department of each fund custodian shall perform their duties faithfully and diligently, and shall not conduct the securities transactions and other activities that prejudice the fund property and the interests of fund unit holders.
Article 6 The CSRC and the China Banking and Insurance Regulatory Commission (hereinafter referred to as the "CBIRC") shall, in accordance with laws and regulations as well as the principle of prudential regulation, supervise and administer fund custodians and their fund custody business activities.
Article 7 The Asset Management Association of China shall conduct self-regulation management of fund custodians and their fund custody business activities in accordance with laws and regulations as well as self-regulation rules.
Chapter II Fund Custody Institution
Article 8 Each of commercial banks and other financial institutions that applies for the qualification for fund custody (hereinafter referred to as an "applicant") shall meet the following conditions:
1. it has net assets of not less than CNY20 billion and its risk control indicators comply with relevant provisions of competent regulator;
2. it has set up a specialized fund custody department, the setting of which can ensure the integrity and independence of custody business operation;
3. the proposed senior executives of its fund custody department meet statutory conditions, and personnel who have obtained the fund qualification account for at least half of total number of employees of the department; there are at least eight practitioners who intend to engage in such businesses as fund clearing, accounting, investment supervision, information disclosure, internal audit and monitoring and who have the fund qualification, among them, those in core business positions such as accounting and supervision shall have more than two-year experience in custody business;
4. it has the conditions for safekeeping fund property and ensuring the integrity and independence of fund property;
5. it has a safe and efficient clearing and settlement system;
6. its fund custody department has fixed premises required for business operations and is equipped with an independent security monitoring system;
7. its fund custody department is equipped with independent technical systems for custody business, including network system, application system, security protection system and data backup system;
8. it has a sound internal audit and monitoring system and a sound risk control system;
9. it has no record of major violation of laws or regulations in the last three years; and
10. it meets other conditions prescribed by laws and administrative regulations as well as stipulated by the CSRC upon approval of the State Council.
Where a foreign bank branch applies for the fund custody qualification, its net assets and other financial indicators may be calculated as per those of the overseas head office. The overseas head office shall have a sound internal control mechanism, enjoy a good international reputation and have satisfying business performance, while with such indicators as its fund custody business scale, income, profit, market share ranking top in the world in the last three years, and with its long-term credit standing maintaining at a high level; and the country or region where it is located shall have sound securities laws and regulatory systems, and relevant financial regulator shall have concluded a memorandum of understanding on securities regulation cooperation and maintained an effective relationship of regulation cooperation with the CSRC or an institution recognized by the CSRC.
Article 9 An applicant shall have a sound clearing and settlement system, which shall conform to the following provisions:
1.
......
Order of the China Securities Regulatory Commission No.172
July 10, 2020
The Administrative Measures for Securities Investment Fund Custody Business, adopted at the Sixth Commission Meeting of 2020 of the China Securities Regulatory Commission upon deliberation on July 7, 2020, are hereby promulgated and shall come into effect as of the date of promulgation.
Yi Huiman, Chairman of the China Securities Regulatory Commission
Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission
Administrative Measures for Securities Investment Fund Custody Business
Chapter I General Provisions
Article 1 These Measures are enacted in accordance with the Securities Law, the Law on Securities Investment Funds, the Law on Banking Regulation and other pertinent laws and administrative regulations with a view to regulating the securities investment fund custody business, maintaining the competition order of the securities investment fund custody business, protecting the legitimate rights and interests of fund unit holders and relevant parties, and promoting the sound development of securities investment funds.
Article 2 For the purpose of these Measures, custody of securities investment funds (hereinafter referred to as "funds") refers to the acts of performing such duties to funds as safekeeping fund property, handling clearing and settlement, rechecking and reviewing information on net value, conducting investment supervision and convening a general meeting of fund unit holders in accordance with pertinent laws and regulations as well as fund contracts by legally established commercial banks or other financial institutions with the fund custody qualification that act as custodians.
Article 3 Commercial banks and other financial institutions intending to engage in the fund custody business shall, with the approval of the China Securities Regulatory Commission (hereinafter referred to as the "CSRC"), legally obtain the qualification for fund custody.
An institution without the qualification for fund custody may not engage in the fund custody business.
Article 4 Fund custodians shall, abide by the provisions of laws and regulations as well as the stipulations of fund contracts and fund custody agreements, observe professional ethics and codes of conduct, act in good faith with prudence and diligence, and perform the fund custody duties for the interests of fund unit holders.
Article 5 Senior executives and other practitioners of the fund custody department of each fund custodian shall perform their duties faithfully and diligently, and shall not conduct the securities transactions and other activities that prejudice the fund property and the interests of fund unit holders.
Article 6 The CSRC and the China Banking and Insurance Regulatory Commission (hereinafter referred to as the "CBIRC") shall, in accordance with laws and regulations as well as the principle of prudential regulation, supervise and administer fund custodians and their fund custody business activities.
Article 7 The Asset Management Association of China shall conduct self-regulation management of fund custodians and their fund custody business activities in accordance with laws and regulations as well as self-regulation rules.
Chapter II Fund Custody Institution
Article 8 Each of commercial banks and other financial institutions that applies for the qualification for fund custody (hereinafter referred to as an "applicant") shall meet the following conditions:
1. it has net assets of not less than CNY20 billion and its risk control indicators comply with relevant provisions of competent regulator;
2. it has set up a specialized fund custody department, the setting of which can ensure the integrity and independence of custody business operation;
3. the proposed senior executives of its fund custody department meet statutory conditions, and personnel who have obtained the fund qualification account for at least half of total number of employees of the department; there are at least eight practitioners who intend to engage in such businesses as fund clearing, accounting, investment supervision, information disclosure, internal audit and monitoring and who have the fund qualification, among them, those in core business positions such as accounting and supervision shall have more than two-year experience in custody business;
4. it has the conditions for safekeeping fund property and ensuring the integrity and independence of fund property;
5. it has a safe and efficient clearing and settlement system;
6. its fund custody department has fixed premises required for business operations and is equipped with an independent security monitoring system;
7. its fund custody department is equipped with independent technical systems for custody business, including network system, application system, security protection system and data backup system;
8. it has a sound internal audit and monitoring system and a sound risk control system;
9. it has no record of major violation of laws or regulations in the last three years; and
10. it meets other conditions prescribed by laws and administrative regulations as well as stipulated by the CSRC upon approval of the State Council.
Where a foreign bank branch applies for the fund custody qualification, its net assets and other financial indicators may be calculated as per those of the overseas head office. The overseas head office shall have a sound internal control mechanism, enjoy a good international reputation and have satisfying business performance, while with such indicators as its fund custody business scale, income, profit, market share ranking top in the world in the last three years, and with its long-term credit standing maintaining at a high level; and the country or region where it is located shall have sound securities laws and regulatory systems, and relevant financial regulator shall have concluded a memorandum of understanding on securities regulation cooperation and maintained an effective relationship of regulation cooperation with the CSRC or an institution recognized by the CSRC.
Article 9 An applicant shall have a sound clearing and settlement system, which shall conform to the following provisions:
1.
......