Laws of the People's Republic of China

Official Reply of the China Securities Regulatory Commission the Setting up of Guotai Junan Financial Holding Co., Ltd. by Guotai Junan Securities Co., Ltd. in Hong Kong SAR

Zheng Jian Ji Gou [2006] No. 82

Guotai Junan Securities Co., Ltd.,

Your application materials on the setting up of Guotai Junan Financial Holding Co., Ltd. in Hong Kong SAR have been received. After examination, the following reply is hereby given.

1.

Your company is authorized to set up Guotai Junan Financial Holding Co., Ltd. in Hong Kong SAR.

2.

Your company shall, in accordance with the relevant provisions of the State, appropriate the capital and assign employees to Hong Kong SAR. The resumes of those persons who are dispatched to Hong Kong SAR as well as the approval documents on dispatching them to Hong Kong SAR shall be reported to this Commission for archival filing.

3.

Zhu Youyi is selected as the principal of Guotai Junan Financial Holding Co., Ltd without demurrer form our Commission. In the event that any senior manager of your overseas institutions is to be changed, you shall report it to this Commission beforehand.

4.

The business management and risk control mechanism of your overseas institutions shall be further improved and perfected, your company shall make monthly financial reports on overseas institutions to this Commission, and send a copy of all the information as required to be submitted by the overseas securities regulatory institution to our Commission in a timely manner. Without authorization of our Commission, your company may not conduct financing or provide guaranty for any overseas institution.

5.

Your company shall make a timely report to this Commission on the following significant matters: (1) the occurrence of an illegal act or major loss; (2) any cheat or fraud act of an employee of any overseas institution, which involves a large amount of money and has caused comparatively large economic losses; and (3) any other important matter that should be reported to the local regulatory bureau in accordance with the provisions.

6.

The institution set up by your company in Hong Kong SAR shall rigorously comply with the laws of Hong Kong SAR and shall be supervised by the securities regulatory organ of Hong Kong SAR.

China Securities Regulatory Commission

April 28, 2006