中华人民共和国证券投资基金法 Law of the peoples Republic of china on Funds for Investment in securities

y large amount of personal debts that are overdue；

　　（4）employees of fund managers， fund custodians， stock exchanges， securities companies， securities registration and settlement， institutions futures exchanges， futures brokerage firms or other institutions and state functionaries， who have been dismissed because of illegal conduct；

　　（5）lawyers， certified public accountants， employees of assets evaluation institutions and verification institutions and investment consultancy professionals who have been disqualified or whose licenses have been revoked because of illegal conduct； and

　　（6）other persons who are prohibited from engaging in the fund business under relevant laws and administrative regulations.

　　Article 16 the managers and other senior managers of a fund manager shall be well-versed in laws and administrative regulations concerning investment in securities and shall possess the qualifications for the fund business have at least three years' working experience related to the positions are holding.

　　Article 17 the appointment and replacement of a manager or other senior manager of a fund manager shall be reported to the securities regulatory authority under the state council for examination and approval in accordance with the qualifications for the post as prescribed by this law and other relevant laws and administrative regulations.

　　Article 18 the director， supervisor， manager or other employee of a fund manager shall not take up any post in a fund custodian or another fund manager shall not take up any post in a fund custodian or another fund manager and shall not engage in any securities trading or other activities to the detriment of the fund assets or the interests of the holders of fund units.

　　Article 19 a fund manager shall perform the following duties：

　　（1）raising capital in accordance with law； and selling， subscribing for， redeeming and registering fund units or entrusting another institution approved by the securities regulatory authority under the state council to do the same on its behalf；

　　（2）completing procedures for the registration of funds；

　

　（3）separately managing and keeping separate accounts of different funds under its management， and investing in securities；

　　（4）in accordance with the provisions in the fund contract， deciding on plans for distributing returns of the fund and distributing the same among the holders of fund units promptly；

　　（5）auditing fund accounts and preparing financial and accounting reports of the fund；

　　（6） preparing interim and annual fund reports；

　　（7） calculating and announcing the net value of the fund assets and deciding on the subscription and redemption prices of fund units；

　　（8）handling matters of disclosure of information in relation to the management of fund assets；

　　（9）convening general meeting of the holders of fund units；

　　（10） maintaining records， account books statements and other related materials concerning the management of fund assets；

　　（11）exercising， in the name of the fund manager the right of litigation or taking other legal actions on behalf of the holders of fund units； and

　　（12）other duties prescribed by the securities regulatory authority under the state council.

　　Article 20 A fund manager shall not commit the following acts：

　　（1） mixing its own assets or another person's assets with the fund assets to invest in securities；

　　（2） unfairly treating the assets of different funds under its management；

　　（3）making use of fund assets to seek benefit for a third party other than the holders of fund units；

　　（4）in breach of relevant regulations committing itself to make profits for the holders of fund units and bear their losses； and

　　（5） other acts prohibited by the securities regulatory under the state council in accordance with the relevant laws and administrative regulations.

　　Article 21 The securities regulatory authority under the state council shall， on the strength of its authority ， instruct the fund manager to make rectification or disqualify it for the fund management if：

　　（1） it grossly violates laws or regulations；

　　（2）it ceases to meet the requirements specified in article 13 of this law； or

　　（3）it is found in other circumstances as prescribed by laws and administrative regulations.

　　Article 22 the duties of a fund manager shall be terminated if：

　　（1）it is disqualified for fund management according to law；

　　（2）it is discharged by the holders of fund units at a general meeting；

　　（3）it closes down in accordance with law or is dissolved or declared bankrupt according to law； or

　　（4）it is found other circumstances as prescribed by the fund contract.

　　Article 23 where the duties of a fund manager is terminated， a new fund manager shall， within six months， be selected and appointed by the holders of fund units at a general meeting； and before the appointment of a new fund manager， the securities regulatory authority under the state council shall appoint a provisional fund manager.

　　Where the duties of a fund manager is terminated， the fund manager shall properly keep the materials regarding fund management and shall compete the procedures for the transfer of fund management without delay， and the new or provisional fund manager shall likewise take over fund management.

　　Article 24 where the duties of a fund manager is terminated， a public accounting firm shall， in accordance with relevant regulations， be appointed to audit the fund assets， and it shall announce the audit results and， at the same time， submit them to the securities regulatory authority under the state council for the record.

　　Chapter III

　　Fund custodians

　　Article 25 a fund custodian shall be a commercial bank which has been established in accordance with law and has obtained the qualifications for fund custody.

　　Article 26 To apply for fund custodian qualifications， the appl

icant shall meet the following requirement and shall be subject to examination and approval by the securities regulatory authority under the state council and the banking regulatory authority under the state council：

　　（1）its net assets and its capital adequacy ratio are in conformity with relevant regulations；

　　（2）it has a department specially established for fund custody；

　　（3）the number of staff who have obtained professional qualifications for the fund business reaches the quorum；

　　（4）it meets the requirements for the safe custody of fund assets；

　　（5）it has a safe and efficient system for clearance and settlement；

　　（6）it has the business premises security facilities and other facilities relating to the business of fund custody which satisfy the relevant requirements；

　　（7）it has a perfect internal auditing and monitoring system and a perfect risk control system； and

　　（8）other requirements prescribed by laws and administrative regulations or prescribed by the securities regulatory authority under the state council or the banking regulatory authority under the state council with the approval of the state council.

　　Article 27 the provisions of Article 15 and 18 of this law shall be applicable to the employees of the department specially established for fund custody under the fund custodian.

　　The provisions of Article 16 and 17 of this law shall be applicable to the manager and other senior managers of the specially established fund custody department under the custodian.

　　Article 28 the fund custodian and the fund manager shall not be served by the same entity and they shall not make capital contribution to each other or hold each other's shares.

　　Article 29 a fund custodian shall perform the following duties：

　　（1）keeping safe custody of fund assets；

　　（2）establishing capital accounts and securities accounts for fund assets in accordance with relevant regulations；

　　（3）establishing separate accounts for the assets of different finds under its custody to ensure integrity and independence of the fund assets；

　　（4）maintaining records account books， statements and other related materials concerning the business of fund custody； （5）handling clearance and settlement matters without delay in accordance with the provisions in the fund contract and the investment of the fund manager；

　　（5）handling matters of disclosure of information in relation to the business of fund custody；

　　（6）presenting comments and suggestions on financial and accounting reports of the fund and interim and annual reports of the fund；

　　（7）verifying and reviewing the net value of fund assets and the subscription and redemption prices of the fund units calculated by the fund manager；

　　（8）convening general meetings of the holders of fund units in accordance with relevant regulations；

　　（9）supervising the investment operation of the fund manager in accordance with relevant regulations； and

　　（10）other duties prescribed by the securities regulatory authority under the state council.

　　Article 30 where a fund custodian discovers that the investment instructions given by a fund manager contravene laws， administrative regulations or other relevant regulations or the provisions in the fund contract， it shall refuse to carry them out， immediately notify the fund manager of the matter and report to the securities regulatory authority under the state council without delay.

　　Where a fund custodian

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