Laws of the People's Republic of China

Reply of the State Administration of Foreign Exchange concerning the Approval of the QFII Investment Quota of Stanford University and Its Opening of a Foreign Exchange Account and a Special RMB Account

Hui Fu [2006] No.339

Shanghai Branch of HSBC:

We have received the materials on applying for the QFII investment quota of Stanford University and its opening of a foreign exchange account and a special RMB account, which were submitted by you on behalf of Stanford University. After negotiation with the China Securities Regulatory Committee, we hereby give the following reply:

1.

The QFII investment quota of Stanford University of USD 50 million is approved. Within 6 months as of the issuance date of this Reply, Stanford University shall remit the principal.

2.

We approve that a foreign exchange account and a special RMB account are opened respectively by Stanford University at your Branch. The revenue scope of the foreign exchange account shall be: the capital remitted by QFII from overseas, interests of small-sum current deposits of the entities, and other revenues provisioned by the State Administration of Foreign Exchange; while the expenditure scope shall be: the capital remitted into the special RMB account of QFII through exchange settlement, the capital repatriated via the original channel and other expenditures as provisioned by the State Administration of Foreign Exchange.

3.

Stanford University may not conduct securities investment before the principal remitted by it reaches USD 20 million (or equivalent RMB). Stanford University may, through exchange settlement, transfer the required capital of foreign exchange into the special RMB account within 10 workdays prior to it conducts investment.

4.

You shall, during the period of providing QFII custody services, strictly comply with the Measures for Administration of Securities Investment within the Territory of China by QFII (Decree No.36 of the China Securities Regulatory Commission, People's Bank of China and the State Administration of Foreign Exchange) and other related provisions, perform all duties of a trustee effectively, and guarantee that Stanford University abide by the stipulations as mentioned above.

5.

You shall, within 5 workdays since you receive this Reply, come to the State Administration of Foreign Exchange to obtain a certificate of QFII foreign exchange registration on behalf of Stanford University.

6.

You shall, within 5 workdays after you open the foreign exchange account and special RMB account for Stanford University, report the related information concerning the opening of accounts to the State Administration of Foreign Exchange for the archival purpose.

The State Administration of Foreign Exchange

November 8, 2006