QFII Application and Business Guideline

Briefing for Applying QFII Qualification

1.Apply through Custodian
Appoint a Custodian.
Normally 3–5 weeks for preparing documents.
Importance of the Investment Plan is VERY HIGH.
Importance of the Wording and Format is HIGH.

2.Obtain QFII License from CSRC
Submit QFII application to CSRC via Custodian.
CSRC will assess and make decision within 20 working days upon receipt of complete application.

3.Obtain QFII Investment Quota
Apply within one year upon receipt of QFII license.
Submit quota application to SAFE via Custodian.
Additional quota application can only be submitted one year after last approval.

4.Account Opening
Apply to open special RMB and FX accounts (1–2 weeks).
Final approval from PBOC for special RMB account.
Open securities accounts in China Securities Depository and Clearing Company (SH/SZ).

5.Transfer Funds
Inject fund within 6 months after being approved.
Final quota is subject to actual paid-in amount.
Investment is not permitted until capital injected reaches US$ 20 million.

6.Start Investing
Designate local Broker.
Finalize agreement among Custodian, QFII and Broker.

Information mentioned above is only for reference. Corresponding regulations issued by CSRC and SAFE prevail.

Business Report Process of QFII Information of Shanghai Stock Exchange

To facilitate QFIIs to participate in the market business of Shanghai Stock Exchange (hereinafter referred to as "SSE") , we have hereby issued SSE Notification of Business Report Requirements of QFII Information according to the provisions of Implementation Particulars of Securities Tradings for Qualified Foreign Institutional Investors (hereinafter referred to as "The Particulars").

A.Responsible Department of QFII Business
Membership Department of SSE is the coordination department responsible for QFII business. Specific businesses related with QFIIs are still undertaken by business departments of SSE respectively.
 
B.Business Report of QFII Information provided by QFII Custodian Bank
a.Accepting Department: Membership Department
b.General Requirements
(a) Contents of report
(1)Basic information of QFII custodian bank (contact information of QFII business executives, including contact information of at least one compliance officer), information of QFII qualification approval and QFII custodian bank. Please refer to SSE website for more details.
(2)Basic information of QFII (contact information of QFII business executives, including contact information of at least one compliance officer), information of QFII qualification approval, controlling shareholder, investment quota approval, etc. Please refer to SSE website for more details.
(3)Contact information of QFII broker dealer, QFII business executives, including contact information of at least one compliance officer. Please refer to SSE website for more details.
(b) Approach of report
Log in "Member Company Area" on SSE website (www.sse.com.cn) with user name and password to input "QFII report" under the special column "online report".
 
C.Management of QFII's Shareholding
a. When all QFIIs' shareholdings have reached or exceeded 26% of a listed company's A shares, SSE will disclose the stock name, number of shares purchased, shareholding ratio, etc., and provide the function for inquiry about such information based on time or ticker symbol.
For more information, please go to "QFII business" in "Member Company Area" of SSE website (www.sse.com.cn), or “QFII Information Disclosure" in “Trading Information Disclosure" under the special column of "Market Quotation and Trading".
b.Within five trading days after the receipt of "the notice of closing position" from SSE, the qualified investor must close positions according to "The Particulars" and report the result to SSE on the following day.
c.QFII broker dealer and QFII custodian bank must assist in closing positions of QFIIs after the receipt of "assistance in closing position" from SSE according to "The Particulars" and report the result to SSE on the following day.
 
D.Contact persons of Membership Department
Wang Huizhong, Telephone: 021-68806148, E-mail: hzwang@sse.com.cn
Su Zhenyu, Telephone: 021-68801913, E-mail: zysu@sse.com.cn
Fax: 021-58878718