Laws of the People's Republic of China

Circular of China Securities Regulatory Commission on Relevant Issues Concerning the Payment of Securities Investor Protection Funds

Zheng Jian Fa [2006] No.78

Shanghai Stock Exchange, Shenzhen Stock Exchange, China Securities Depository and Clearing Corporation Limited, all managing underwriters, China Securities Investor Protection Fund Corporation Limited:

In accordance with relevant provisions of the Measures for the Administration of Securities Investor Protection Funds and the Circular of China Securities Regulatory Commission and the Ministry of Finance on How to Deal with the Interests on Funds Deposited for the Purchase of New Securities in the Issuance of Stocks, Convertible Bonds, or other Securities, Shanghai Stock Exchange and Shenzhen Stock Exchange shall incorporate 20 percent of the trading brokerage into the Securities Investor Protection Fund (hereinafter referred to as the Protection Fund) when their venture capitals reaching their respective upper limits, and shall incorporate the interest income of funds deposited for the purchase of new securities into the Protection Fund when issuing stocks, convertible bonds, or other securities. For the purpose of regulating the fund raising for the Protection Fund, the relevant issues are hereby notified. You are requested to implement accordingly:

1.

Shanghai Stock Exchange and Shenzhen Stock Exchange shall incorporate 20 percent of the trading brokerage into the account appointed by China Securities Investor Protection Fund Corporation Limited (hereinafter referred to as the Protection Fund Company) within 10 working days after the end of each season when their venture capitals reaching their respective upper limits.

2.

China Securities Depository and Clearing Corporation Limited (hereinafter referred to as the Clearing Company) shall set up an account exclusively for depositing the interest income of funds deposited for the purchase of new securities in the online issuance of stock, convertible bond, or other securities. The aforesaid account may be established for the Shanghai Branch and Shenzhen Branch separately.

3.

The managing underwriter of the issuance of stocks, convertible bonds, or other securities, shall set up an account for the capital assessment that is exclusively for depositing the principal and the interest income of funds deposited for the purchase of new securities in the off-line issuance of stocks, convertible bonds, or other securities subject to relevant requirements.

4.

The interest income of funds deposited for the purchase of new securities shall be allotted to the stock changes no more, but shall be directly allotted to the appointed account of Protection Fund Company by the Shanghai and Shenzhen Branches of Clearing Company, and the managing underwriters as well. The Clearing Company and the managing underwriters shall be in active assistance with the relevant commercial banks in collecting the interests of funds deposited for the purchase of new securities.

5.

The Shanghai and Shenzhen Branches of Clearing Company and the managing underwriters shall allot the interests of funds deposited for the purchase of new securities in full amount to the account appointed by the Protection Fund Company within 5 working days after the interest settlement day of each season. The Statement for the Withholding and Remitting of Interest Income of Funds Deposited for the Purchase of New Securities (for online issuance of securities) and the Statement of the Payment of the Interest Income of Funds Deposited for the Purchase of New Securities (off-line securities issuance) (see Attachment) shall be filled out at the same time and be submitted to the Protection Fund Company.

6.

Protection Fund Company shall produce a receipt to the payers within 10 working days since the receipt of the aforesaid funds. The receipts may be sent by a designated person or by mail.

7.

All payers shall pay funds in full amount on time, and may not refuse or deliberately delay the payment with any excuse. An overdue fine shall be charged to the entities that refuse or deliberately delay the payment of fund by Protection Fund Company at 0.03 percent per day.

8.

Shanghai Stock Exchange and Shenzhen Stock Exchange shall incorporate 20 percent of the trading brokerage occurred after July 1, 2005 into the account appointed by Protection Fund Corporation when their venture capitals reaching their respective upper limits; all stock exchanges, clearing companies and managing underwriters shall incorporate the interests of funds deposited for the purchase of new securities occurred after January 28th, 2005 into the account appointed by the Protection Fund Corporation.

China Securities Regulatory Commission

July 12, 2006