Interim Measures for the Risk Fund Management of Stock Exchanges (2016 Revision)

• Document Number：Order No. 666 of the State Council
• Area of Law： Securities
• Level of Authority： Administrative Regulations
• Date issued：02-06-2016
• Effective Date：04-04-2000
• Status： Effective
• Issuing Authority： State Council

Interim Measures for the Risk Fund Management of Stock Exchanges
(Approved by the State Council on January 31, 2000; promulgated by the China Securities Regulatory Commission and the Ministry of Finance on April 4, 2000; amended in accordance with the Decision of the State Council on Abolishing and Amending Some Administration Regulations on January 8, 2011 for the first time; and revised in accordance with the Decision of the State Council on Amending Some Administrative Regulations on February 6, 2016 for the second time)
Article 1 These Measures are formulated in order to safeguard the safe operation of the securities trading system and correctly to manage and use the securities exchange risk fund and in accordance with the relevant provisions of the Securities Law of the People's Republic of China.
Article 2 The securities exchange risk fund as referred to in these Measures (hereinafter referred to as “this Fund”) means the dedicated fund established for making up substantial financial losses suffered by the securities exchange, for preventing serious risk accidents in the business activities of the securities exchange and for ensuring the normal operation of securities trading activities.
Article 3 Sources of this Fund:
(1) 20% of the trading fee collected by the securities exchange which shall be put into the dedicated account as the risk fund;
(2) 10% of the annual seat fee collected by the securities exchange which shall be put into the dedicated account as the risk fund;
(3) A lump sum of 10% of the membership fee collected by the securities exchange which shall be put into the dedicated account as the risk fund;
(4) A lump sum of 15% of the book balance of the interest differentials of the blocked capital for the application of new issues as of the date of entry into effect of these Measures; and
(5) The pecuniary penalty of fines and interests imposed on the delinquent members.
Article 4 If, at the end of a fiscal year, the net assets of this Fund reaches or exceeds one billion yuan, no amount as required by Article 3 (1) and (2) of these Measures shall be collected in the next fiscal year.
Article 5 If, at the end of a fiscal year, the net assets of this Fund is less than one billion yuan, the amount as required by Article 3 (1) and (2) of these Measures shall be collected in the next fiscal year continuously.
Article 6 The China Securities Regulatory Commission (hereinafter referred to as the “Securities Regulatory Commission”) may, in conjunction with the Ministry of Finance, adjust the scale of this Fund appropriately and the mode and proportion of collection and payment according to the market risk conditions.
Article 7 This Fund shall be controlled by the board of governors of the securities exchange. The board of governors shall designate an organ that shall be responsible for the day-to-day management and use of this Fund.
Article 8 This Fund shall be fully deposited in the dedicated account at the Stated-owned commercial bank, and the interests therefrom shall be fully entered into the dedicated account of this Fund.
Article 9 Separate accounts shall be established for the assets of this Fund and the assets of the securities exchange. Detailed ledgers of this Fund shall be established for separately recording the assets of this Fund derived from the sources listed in Article 3 of these Measures, interests income and the use of the principal and interests of the corresponding assets.
Article 10 The minimum amount of payment from this Fund shall be 20,000,000 yuan.
Article 11 The amount derived from the source listed in Article 3 (4) of these Measures can be used only after all the amounts derived from other sources listed in Article 3 are used.
Article 12 The securities exchange shall, in accordance with the provisions of relevant laws and regulations, establish and improve its business rules, internal control system and membership management system so as to minimize the risk accidents to the maximum extent.
Article 13 After this Fund is used, the securities exchange shall have recourse to the parties concerned and shall transfer the amount it recovered to this Fund; and at the same time, it shall revise and improve its business rules, internal control system and members management system immediately.
Article 14 When, upon approval of the Securities Regulatory Commission, a corresponding modification or liquidation of this Fund is made, the Securities Regulatory Commission shall, in conjunction with the Ministry of Finance, decide the percentage and amount of the remaining assets of this Fund which shall be turned over to the State Treasury and shall be returned to the relevant persons who have contributed to this Fund.
Article 15 The measures for accounting and management of financial affairs of this Fund shall be formulated by the Ministry of Finance.
Article 16 The Securities Regulatory Commission shall be responsible for the interpretation of these Measures.
Article 17 These Measures shall come into force as of the date of promulgation.