Laws of the People's Republic of China

China Securities Regulatory Commission

Notice of China Securities Regulatory Commission on Relating Issues of Investment Bank Funds Deposit in Monetary Market

Zheng Jian Fa [2005] No.121

Fund management companies, fund trusteeship banks:

In order to further standardize the operation of fund investment in monetary market, to promote the sound development of monetary market funds, in accordance with such laws and rules as Law of The People's Republic of China on Securities Investment Fund, the Measures for the Administrative Operation of the Securities Investment Fund, Interim Provisions on the Management of Monetary Market Funds and etc., notice of the relating issues on fund investment bank deposit in monetary market is hereby given as follows:

1.

Monetary market funds may be invested in cash deposit, deposit at call, deposit within one year (one year included).

2.

Deposit bank of the fund in monetary market shall be the commercial banks which enjoy the qualification of fund trustee, of commission operation of securities investment funds, or of the trustee of investor(s) of legal foreign investment institutions.

3.

The investment of monetary market funds in time deposit shall not exceed 30% of the net value of fund asset.

4.

Monetary market funds invested in bank deposit shall sign general cooperative agreement with the parent bank or its authorized branches and deposit funds wherein.

5.

Monetary market funds invested in bank deposit shall sign detailed agreement with the deposit bank and clarify such particulars as type of deposit, time limit, interest rate, sum, account number, means of reconciliation, means of withdrawal, accountant management. Clauses of early withdrawal in the agreement of time deposit shall be agreed on for the purpose of preventing liquidity risk in special cases.

6.

Fund manager and fund trustee shall establish time conciliation mechanism with deposit bank(s) to ensure the authenticity and veracity of the monetary market funds deposit account and its accounting.

7.

Fund manage and fund trustee shall, in accordance with the Notice herein and the relating provisions and the written agreement signed on the basis of bank deposit of monetary market funds, define the rights and obligations and responsibilities of the two parties in such procedures as agreement signing, account opening and management, delivery and implementation of investment order, fund appropriation, account checking, maturity honor, documents custody, and the issue, delivery and custody of deposit confirmation so as to ensure fund asset safety and the legitimate interest of fund holders.

8.

Fund manager shall strengthen the assessment and research on bank deposit of monetary market funds , establish and perfect , with regard to bank deposit, its business process, duty and responsibility and risk controls and supervision and auditing system.

9.

Fund trustee shall strengthen the supervision and auditing on bank deposit of monetary market funds, strictly examine and review such documents as the relating agreements, accountant data, investment directive, deposit confirmation, and severely actualize the custody duties.

10.

Fund manage and fund trustee shall, when carrying out deposit operation of monetary market funds, strictly abide by such provisions as The People's Republic of China on Securities Investment Fund, the Measures for the Administrative Operation of the Securities Investment Fund, Interim Provisions on the Management of Monetary Market Funds and etc., and those national provisions relating to account management, interest administration, payment settlement and etc.

11.

This Notice shall come into effect as of the date of its promulgation.

China Securities Regulatory Commission

November 21, 2005