证券公司治理准则（试行） Circular on issuing the rules for governance of securities companies (For Trial Impleme

ulated by the securities company and shall be implemented after report to the board of directors for approval. Detailed rules for the general manager's working shall include the following contents：

　　（1） the conditions， procedures and participant s of which the general manager's meeting is held；

　　（2） duties and dividing the work for the general manager， vice president and other management personnel；

　　（3） authority of using assets of the company and sign a contract；

　　（4） the report system to the board of directors and the supervisory board；

　　（5） other matters that the board of directors considers essential.

　　Article 59 The general manager shall report to the board of directors or the supervisory board the signing of vital contracts， performance， use of capitals and circumstances of profits and losses on the request of the board of directors or the supervisory board. The general manager shall guarantee the truth of such report. The general manager without holding the office of the director may attend meetings of the board of directors as non-voting participants.

　　Article 60 The management personnel shall establish organizations with specific liabilities and clear procedures， organize to implement identification and evaluation of all sorts of risks， establish sound effective internal controlling system and mechanism， handle or correct faults or problems existing in internal controlling in time. The management personnel shall be responsible for not doing their best in internal controlling and not handling or correcting faults or problems existing in internal controlling in time.

　　Article 61 The securities company shall in accordance with relevant provisions stipulated by the CSRC， appoint specialized person of management to be in charge of the supervision and inspection department， who shall not hold plural offices. The management personnel shall support the work of the supervision and inspection department.

　　Chapter VI Incentive and disciplinary mechanism

　　Article 62 The securities company shall establish effective incentive and disciplinary mechanism.

　　Article 63 The securities company shall sign employment contracts with the management personnel， stipulating the term of office， merit assessment， remuneration， dismissal， rights and obligations and liabilities for breach of the contract.

　　Article 64 The remuneration

scheme concerning the management personnel of the securities company shall be approved by the board of directors. The board of directors shall make particular explanations to the shareholders' meeting for duty performance of the management personnel， merit assessment and remuneration.

　　Article 65 The board of directors and the supervisory board of the securities company shall investigate management personnel's liabilities if any of their acts is found to have violated laws， administrative regulations or articles of association of the company and damaged the interests of the company and clients. The securities company shall not pay fines or damages that shall be assumed by directors， supervisors or management personnel in person.

　　Article 66 The management personnel， directors， supervisors or employees of a securities company shall hold or control stock rights of their company after obtaining the approval of the CSRC and reporting to the shareholders' meeting of the company.

　　Chapter VII Basic principles for relationship between securities companies and their clients

　　Article 67 The securities company shall assume good faith duties for clients and shall not infringe right of property， right of choice， right to fair deals， right to know and other lawful rights and interests of clients.

　　Article 68 The securities company shall not misappropriate the clients' capital for settlement of stock transactions， the assets entrusted by clients for management， or clients' securities entrusted in the company.

　　Article 69 The securities company shall bear an obligation to keep clients' documents secret. The securities company has the right to refuse any unit or individual to inquire about clients' documents， except where laws， administrative regulations or the CSRC provide otherwise.

　　Article 70 The securities company shall perform its legal obligations for information disclosure in operation to guarantee clients to make decisions on the basis of full awareness. The securities company shall provide products or services for clients in accordance with laws， administrative regulations and provisions stipulated by the CSRC， shall fully disclose contents and risks about relevant products or services， shall not make false statements， mislead clients and other frauds.

　　Article 71 The securities company shall establish specialized department or post in charge of communicating with clients and handling matters such as clients' complaints.

　　Article 72 The securities company is encouraged to disclose audited annual financial report and other information of the company to the public， and shall ensure the truth and exactness of the disclosed contents.

　　Chapter VIII Supplementary Provisions

　　Article 73 The securities company shall amend and improve articles of association of the company and relevant systems in accordance with requirements of the Company Law， the Securities Law， and other laws， administrative regulations as well as these rules.

　　Article 74 The board of directors of the securities company shall report governance of corporation to the shareholders' meeting， the CSRC and its dispatched office， in accordance with laws， administrative regulations and these rules. The CSRC takes the governance situation of the securities company as basic conditions for market access and as grounds for evaluation of daily supervision.

　　Article 75 The CSRC may authorize a self-regulatory brokers organization or an intermedia organization to evaluate the governance situation of securities companies， and publicize the evaluation result in proper ways.

　　Article 76 definitions：

　　（1） The stock right refers to the investment of shareholders of limited liability companies or shares of joint stock limited companies.

　　（2） Associated Parties and the associated transaction refer to associated and associated transactions mentioned in

Rules for corporate accounting on disclosure of associates relationship and their transactions stipulated by Ministry of Finance.

　　（3） de facto controller refers to incorporations， other organizations or individuals controlling shareholders of securities companies to exercise stockholder's right in law or in fact.

　　（4） The controlling shareholder refers to the shareholder meeting one of the following conditions：

　　（a） the shareholder holding and controlling stock rights of the securities company into top one；

　　（b） the shareholder having the right to decide the membership of directors more than half of the securities company；

　　（c） the shareholder controlling the securities company in other ways.

　　（5） The cumulative voting system refers to as follows： When electing directors or supervisors， the ballot owned by a shareholder equals the product of his holding shares and the number of directors or supervisors. The shareholder may collectively ballot for one candidate for the director or supervisor and also may separately ballot for a few candidates for directors or supervisors. The elected director or supervisor shall be decided according to the number of votes.

　　（6） Internal directors， external directors and independent directors. The internal director refers to the director holding plural offices in the securities company. The external director refers to the director without holding plural offices in the securities company. The independent director refers to the external director which the securities company and its shareholders can not prevent him from making objective judgments.

　　Article 77 The CSRC shall be responsible for the interpretation of there rules.

　　Article 78 These rules shall come into force as of January 15， 2004

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