To strengthen the business management on split-capital funds and protect the legitimate rights and interests of investors, the Shanghai Stock Exchange (SSE) formulated the “SSE Guidance for Business Management on Split-capital Funds” (the “Guidance” for short). Approved by the China Securities Regulatory Commission (CSRC), the “Guidance” is hereby issued and the related matters are notified as follows:
1. The “Guidance” shall come into effect as of May 1, 2017. After the enforcement of the “Guidance”, the investors without permissions for split-capital funds will not be able to buy split units of split-capital funds and partition basic units of split-capital funds. Investors who have split units of split-capital funds but without the related permissions may continue to hold or sell the units of split-capital funds currently held by them at their discretion.
2. All member units are required to complete the preparatory work for their businesses and technologies before February 25, 2017, including formulating the system and operation procedure for investor suitability management, working out the “Risk Disclosure Statement of Investment in Split-capital Funds” according to the essential provisions attached to the “Guidance”, and upgrading and testing related technical systems.
3. After completing the preparations for their related businesses and technologies, the member units may grant the related permissions for split-capital funds to the investors meeting the requirements of the “Guidance”.
4. All member units should attach great importance to the implementation of the “Guidance” and strengthen their efforts in organization and leadership. All member units should, within 3 trading days after the end of each month, submit to the SSE a written report on the progress in improvement and testing of their technical systems and the grant of permissions to investors. The SSE will announce the method of submission separately.
5. All member units and fund managers should set up and improve their internal work mechanisms, conduct the business related to split-capital funds in strict accordance with the provisions of the “Guidance”, and make effective efforts in investor education, risk alert and other related work.
6. The SSE will supervise and inspect the member units on their implementing the requirements for investor suitability management and other aspects. For the members failing to implement the related requirements of the “Guidance”, the SSE will, on the basis of the situations, take self-regulatory measures or disciplinary sanctions, which will also be reported to the CSRC.
Attachment: SSE Guidance for Business Management on Split-capital Funds (Chinese Version Only)
