Laws of the People's Republic of China

   Article 1 This set of procedures is formulated for the strengthening of administration of consultancy services over securities and futures investment and protecting public interests and the lawful rights and interests of investors.

   Article 2 This set of procedures must be abided by when conducting securities and futures investment consultancy services within the boundaries of the People's Republic of China.

Securities and futures investment consultancy referred to in this set of procedures means direct or indirect paid consultancy services such as securities and futures investment analyses, forecasts or suggestions given by institutions engaged in securities and futures investment consultancy and their consultants to securities and futures investors or clients through the following means:

(1) Commissioned by investors or clients to provide securities and futures investment consultancy services;

(2) Undertaking lectures, seminars and analyzing meetings in respect of securities and futures investment consultancy;

(3) Publishing articles, commentaries and reports on securities and futures investment in newspapers and magazines, or providing securities and futures investment consultancy services through radio stations, television stations and other public communications media;

(4) Providing securities and futures investment consultancy services through telephone, facsimile, computer networks and other telecommunications systems;

(5) Other means as determined by the China Securities Regulatory Commission (hereinafter referred to as the CSRC).

   Article 3 To be engaged in securities and futures investment consultancy business, permission should be obtained from the CSRC in accordance with the provisions of this set of procedures. Without the permission of the CSRC, no institutions or individuals is allowed to engage in securities and futures investment consultancy business through the means listed in Article 2 of this set of procedures.

Securities business institutions and futures brokerage institutions and their employees that are engaged in securities and futures investment consultancy business exceeding the institutions' business scope should abide by the provisions of this set of procedures.

   Article 4 Securities and futures investment consultancy business should be undertaken in accordance with relevant laws, regulations, rules and related provisions of the CSRC and the principles of objectivity, fairness, honesty and creditability.

   Article 5 The CSRC and the local securities and futures regulatory departments authorized by the CSRC (referred to hereinafter as local securities regulatory authorities) shall be responsible for the supervision and administration of securities and futures investment consultancy business and for the implementation of this set of procedures.

CHAPTER TWO SECURITIES AND FUTURES INVESTMENT CONSULTANCY INSTITUTIONS

   Article 6 To apply for qualification of engagement in securities and futures investment consultancy business, the following requirements should be met:

(1) For institutions engaged in securities investment consultancy services or futures investment consultancy services separately, more than five full-time employees who have acquired qualifications for engagement in securities or futures investment consultancy business should be accommodated; for institutions engaged in securities investment consultancy services and futures investment consultancy services concurrently, more than 10 full-time employees who have acquired qualifications for engagement in securities or futures investment consultancy business should be accommodated; among their high-ranking managerial personnel, there shall be at least one who has acquired qualifications for engagement in securities or futures investment consultancy business;

(2) With more than RMB1 million in registered capital;

(3) In possession of a fixed business site and necessary communications and other information-transmission facilities relevant to business;

(4) Having formulated articles of association for the company;

(5) Having sound internal management mechanism;

(6) Meeting other conditions as required by the CSRC.

   Article 7 Only securities business institutions and futures brokerage institutions that can meet the requirements as set in Article 6 of this set of procedures may apply for engaging in consultancy services on investments to securities and futures that are not involved in the business of such institutions.

Institutions engaging in other consultancy service may apply for engagement in securities and futures consultancy services only if they can meet the requirements as set in the Article 6 of this set of procedures.

   Article 8 Institutions applying for qualification of engagement in securities and futures investment consultancy business should seek examination and approval according to the following procedures:

(1) The applicant files application with local securities regulatory authorities authorized by the CSRC (if the local securities regulatory authorities have not been authorized by the CSRC, the application shall be filed directly with the CSRC, the same hereinafter), and the local securities regulatory authorities shall, after examination and verification of and consent with the application, give the initial opinions of the examination;

(2) The local securities regulatory authorities report and sent the application papers that have been examined and approved to the CSRC. After examination and approval of the CSRC, business license is issued to the applicant, with duplicates of the approval papers sent to the local securities regulatory authorities;

(3) The CSRC will publish the conditions of the applicants who have acquired business licenses through public notices.

   Article 9 Institutions applying for qualification of engagement in securities and futures investment consultancy business, should submit the following documents:

(1) Application form printed by the CSRC on a unified basis;

(2) The company's articles of association;

(3) Business license of the enterprise's legal person;

(4) Name-list of the institution's high-ranking managerial personnel and full-time employees engaged in securities and futures investment consultancy business and their education background, work experience and employment qualification certificates;

(5) Modes of engagement in investment consultancy business and the internal administration regulations and rules;

(6) Testimonial documents on the use of business sites, the institution's mailing address, telephone and facsimile numbers;

(7) Asset evaluation reports as furnished by certified public accountants; and

(8) Other documents as required by the CSRC.

   Article 10 Whereas there are changes in the securities and futures investment consultancy institutions' mode of business, business sites, major persons in charge and professional employees with qualification certificates for engagement in securities and futures investment consultancy business, the changes should be filed with the local securities regulatory authorities within five business days since the occurrence of such changes so as to register the changes.

   Article 11 Securities and futures investment consultancy institutions shall apply for annual inspections between January 1 and April 30 of each year. When file for annual inspections, the following documents shall be subimtted:

(1) Application report for annual inspection;

(2) Annual business report; and

(3) Annual financial balance sheets audited by certified public accountants;

The local securities regulatory authorities shall provide examination and verification opinions within 20 business days since receipt of the documents mentioned above; if approved after examination and verification, the documents shall then be sent to the CSRC for examination and approval.

Securities and futures investment consultancy institutions that fail to submit annual inspection reports of fail to pass annual inspections after examination and verification shall not continue to be engaged in securities and futures investment consultancy business.

CHAPTER THREE SECURITIES AND FUTURES INVESTMENT CONSULTANTS

   Article 12 Persons engaged in securities and futures investment consultancy business should obtain qualification certificates for engagement in securities and futures investment consultancy business and join a securities and futures investment consultancy institution with business qualifications and then be engaged in securities and futures investment consultancy business.

Failure to obtain qualification certificates for securities and futures investment consultancy business, or though having acquired qualification certificates for securities and futures investment consultancy business, but fails to join a securities and futures investment consultancy institution, are not allowed to be engaged in securities and futures investment consultancy business.

   Article 13 Securities and futures investment consultants applying for qualification for engagement in securities and futures investment consultancy business shall meet the following requirements:

(1) Having citizenship of the People's Republic of China;

(2) Having full capacity for civil conduct;

(3) Having good integrity, being honest and excellent in work ethics;

(4) Having not been penalized for criminal offenses or major violations in the field of securities and futures business;

(5) Having educational background of above colleges;

(6) Securities investment consultants having over two years of experience in securities business; futures investment consultants have over two years of experience in futures business;

(7) Having passed examinations for qualification organized by the CSRC on a unified basis for people engaged in securities and futures business; and

(8) Other requirements as stipulated by the CSRC.

   Article 14 Securities and futures investment consultants applying for qualification for engagement in securities and futures investment consultancy business should seek examination and approval according to the following procedures:

(1) The applicant files application with local securities regulatory authorities authorized by the CSRC (if the local securities regulatory authorities have not been authorized by the CSRC, the application shall be filed directly with the CSRC, the same hereinafter), and the local securities regulatory authorities shall, after examination and verification of and consent with the application, give the initial examination opinions; and

(2) The local securities regulatory authorities report and send the application papers that have been examined and approved to the CSRC. After examination and approval of the CSRC, business license is issued to the applicant, with duplicates of the approval papers sent to the local securities regulatory authorities.

   Article 15 Securities and futures investment consultants applying for qualification for engagement in securities and futures investment consultancy business should submit the following documents:

(1) Application form uniformly printed by the CSRC;

(2) Identification cards;

(3) Academic certificates;

(4) Applicants' score reports of qualification examinations for persons engaged in securities and futures business;

(5) Statements on the applicants' past conduct provided by the unit where the applicants work or the subdistrict offices of the applicants' registered permanent residence; and

(6) Other documents as required by the CSRC.

   Article 16 For those who have acquired qualification for engagement in securities and futures investment consultancy business, when they are applying for practice in the business, the application shall be filed by the securities and futures investment consultancy institutions that they join with the local securities regulatory authorities where the institutions are located. The local securities regulatory authorities, after examining, verifying and approving, shall report the application to the CSRC for further examination and approval; if allowed to practice in the business, business practice certificate will be issued by the CSRC.

   Article 17 For those who have acquired qualification for engagement in securities and futures investment consultancy business shall undergo business annual inspections when the securities and futures investment consultancy institutions they are serving undergo annual inspections. For those who have acquired qualification for engagement in securities and futures investment consultancy business but failed to practice in such a business for 18 months since the date of acquisition of the qualifications, their qualifications shall be automatically out of effect.

   Article 18 Persons who are engaged in securities and futures investment consultancy business are not allowed to serve with two or more securities and futures investment consultancy institutions at the same time.

CHAPTER FOUR ADMINISTRATION OF SECURITIES AND FUTURES INVESTMENT

   Article 19 Securities and futures investment consultancy institutions and their investment consultants should abide by the established principles of prudence, honesty and diligence in the business and provide securities and futures investment consultancy services to investors and clients.

   Article 20 Securities and futures investment consultancy institutions and their investment consultants should use related information and data objectively, precisely and completely in providing investment analyses, forecasts and suggestions to investors and clients. They are not allowed to quote related information and data out of their context or tamper with the related information and data. When quoting related information and data, the sources and copyright holders shall be noted.

   Article 21 Securities and futures investment consultancy institutions and their investment consultants are not allowed to provide investors or clients with investment analyses, forecasts and suggestions based on false information, market talks or inside information.

   Article 22 Securities and futures investment consultants, when publishing articles, delivering lectures or giving suggestions in newspapers, magazines, on radio and television broadcasts or through other communications media, should clearly mark the name of the securities and futures investment consultancy institutions where they serve and their own real name, and fully explain the investment risks involved. Securities and futures investment consultancy institutions, when transmitting facsimile messages concerning securities and future investment consultancy to investors and clients, should clearly mark the institutions' name, address, telephone number and persons for contact.

   Article 23 Securities and futures investment consultancy institutions, when jointly running special columns, programs on securities and futures investment consultancy with newpapers, magazines, radio stations and television stations, or when conducting business cooperation with telecommunications services providers, should report to the local securities regulatory authorities for the record. When they file with the local securities regulatory authorities, the following data should be included: content of cooperation, starting and termination, column arragngements, times when the programs will be aired, persons responsible for the projects, etc., with seals of both units affixed.

   Article 24 Securities and futures investment consultancy institutions and their investment consultants are banned from the following activities:

(1) Buying and selling securities and futures on behalf of investors;

(2) Making pledges on profits for securities and futures investment to investors;

(3) Making agreements with investors to share investment profits or losses;

(4) Buying stocks or securities that have the nature and funcions of securities, and futures for themselves;

(5) Capitalizing on consultancy services to collaborate with others in manipulating the market or engagement in inside trading; and

(6) other frauds concerning securities and futures banned by laws, regulations and rules.

   Article 25 Investment analyses, forecasts and suggestions given by securities and futures investment consultancy institutions on the same topic should be consistent when sending to different clients.

Securities business institutions that conduct securities transactions themselves, when being engaged in securities investment consultancy business exceeding their normal business scope, should provide consistent suggestions on the same topic to both the general public and the institutions' own departments that manage securities transactions. They are not allowed to mislead the public for the benefit of their own business profits.

   Article 26 Brief reports, bulletins, development reports and information systems on securities and futures compiled and distributed by securities business institutions and futures brokerage institutions for internal use should be restricted to uses within the institutions themselves and are not allowed to be provided to the general public through any channels.

Underwriters of companies approved by the CSRC to issue stocks publicly, or stock placement recommenders and the securities investment consultancy institutions where they serve, are not allowed to publish investment value analysis reports compiled for their clients in public communications media.

   Article 27 The CSRC and the local securities regulatory authorities have the right to conduct inspections on business activities of securities and futures investment consultancy institutions and securities and futures investment consultants. Securities and futures investment consultancy institutions and securities and futures investment consultants being inspected should cooperate and not interfere in or obstruct the inspections. The CSRC and the local securities regulatory authorities and their personnel, when conducting inspections, should pay attention to protection of the trade secrets of those involved.

   Article 28 Securities and futures investment consultancy institutions should preserve for two years the investment consultancy data they provided to investors or the general public.

   Article 29 The local securities regulatory authorities, when acting on complaints and tip-offs from investors or the public, have the right to demand securities and futures investment consultancy institutions and their investment consultants to make explanations and provide related data.

   Article 30 Any units or individuals who found violations of this set of procedures by securities and futures investment consultancy institutions, investment consultants or other institutions or individuals can lodge complaints with or give tip-offs to the local securities regulatory authorities.

   Article 31 The local securities regulatory authorities shall place acts of violation of this set of procedures on file for investigation and report the results of the investigations to the CSRC for the record.

   Article 32 Unauthorized engagement in securities and futures investment consultancy business as described in Article 2 of this set of procedures without the approval of the CSRC shall be ordered by the local securities regulatory authorities to cease, and is subject to confiscation of illicit gains and fines below the amount of illicit gains.

   Article 33 Securities and futures investment consultancy institutions that are engaged in one of following acts shall be fined of more than RMB10,000 but less than RMB50,000 by the local securities regulatory authorities; should the circumstances be serious enough, the local securities regulatory authorities shall report to the CSRC and the CSRC hands out penalties of suspension or revocation of the institution's business qualifications:

(1) Documents and data submitted to securities regulatory departments contain false statements or major omissions;

(2) Failure to meet the obligations of reporting and annual inspections as stipulated in this set of procedures;

(3) Failure to register changes in the related matters of the institutions in accordance with provisions of this set of procedures;

(4) Securities and futures investment consultants employed by the institutions received administrative penalties for violations of this set of procedures; and

(5) Interference in and obstruction of inspections, investigations conducted by the local securities regulatory authorities, or the concealment, destruction of evidence.

   Article 34 Whereas securities and futures investment consultancy institutions violate Articles 18, 19, 20, 21, 22, 23, 24, 25 and 28 of this set of procedures, the local securities regulatory authorities shall given them individually or concurrently a warning, confiscation of illegal income, or a fine of more than RMB10,000 but less than RMB50,000. If the circumstances are serious, the local securities regulatory authorities shall report to the CSRC and the CSRC hands out penalties of suspension or revocation of the institutions' business qualifications. If a crime is constituted, criminal sanctions will be given.

   Article 35 Whereas securities and futures investment consultancy institutions violate Article 26 of this set of procedures, the local securities regulatory authorities shall order them to make corrections, and give them a warning or a fine of more than RMB10,000 but less than RMB50,000.

   Article 36 Whereas securities and futures investment consultants violate Articles 18, 19, 20, 21, 22 and 24 of this set of procedures, or fail to meet their obligations of reporting and annual inspections in accordance with this set of procedures, the local securities regulatory authorities shall give them individually or concurrently a warning, confiscation of illegal income, or a fine of more than RMB10,000 but less than RMB30,000. If the circumstances are serious, the local securities regulatory authorities shall report to the CSRC and the CSRC hands out penalties of suspension or revocation of their business qualifications. If a crime is constituted, criminal sanctions will be given.

   Article 37 Staff members of the CSRC and the local securities regulatory authorities who neglect their duties, abuse their power, play favoritism and commit irregularities will be given criminal sanctions whereas crimes are involved. Whereas no crimes are involved, administrative penalties will be given in accordance with the law.

CHAPTER SIX SUPPLEMENTARY PROVISION

   Article 38 This set of procedures shall enter into force as of April 1,1998.