信托投资公司管理办法 Administration of Trust and Investment Corporations Procedures

the handling of trust affairs and， in conjunction with the settlors and the beneficiaries， transfer the trust property to the new trustee， unless otherwise provided in the trust document， in which case the provisions thereof shall prevail.

　　Article 42　If a trust and investment corporation terminates its trustee responsibilities in accordance with the law， the new trust

ee shall be appointed in accordance with the provisions of the trust document. If the trust document is silent on such point， the settlor shall make the appointment. If the settlor is unable to make the appointment， the appointment shall be made by the beneficiary. If the beneficiary has no or limited civil capacity， his guardian shall appoint the trustee on his behalf in accordance with the law.

　　Article 43　The trust of a trust and investment corporation engaged in trust business shall terminate if：

　　1. a ground for termination stipulated in the trust document arises；

　　2. the continued existence of the trust runs counter to the trust objectives；

　　3. the trust objectives have been realized or are impossible to realize；

　　4. the parties to the trust have agreed thereon after consultations；

　　5. the trust term has expired；

　　6. the trust is terminated；

　　7. the trust is nullified； or

　　8. all the beneficiaries of the trust waive their rights to benefit from the trust.

　　Article 44　When a trust terminates， the trust and investment corporation shall prepare a liquidation report on the handling of trust affairs. If the beneficiary or the owner of the rights in the trust property does not have any objections to the liquidation report， the trust and investment corporation shall be released from liability for the matters mentioned therein， with the exception of liability for any improper acts committed by it.

　　Article 45　When a trust and investment corporation accepts trust funds whose method of management will be decided by itself on behalf of the settlor， it shall comply with the following regulations：

　　1. the trust term may not be less than one year； and

　　2. single trust funds may not amount to less than Rmb 50，000.

　　Article 46　As need for purposes of managing financial risk， the People's Bank of China may formulate procedures for the administration of those trust funds whose method of management is to be decided by trust and investment corporations themselves on behalf of the settlors.

　　Article 47　If a trust and investment corporation engages in foreign exchange trust business， it shall comply with relevant State foreign exchange control regulations and submit itself to the inspection and supervision of the competent foreign exchange authority.

　　Article 48　The balance of security provided to third parties by， and inter-institutional loans taken out by， a trust and investment corporation may not exceed its registered capital.

　　Article 49　If a trust and investment corporation uses its own funds and trust funds to engage in inter-institutional lending， it shall comply with the relevant regulations of the People's Bank of China.

　　Article 50　Each year trust and investment corporations shall allocate 5% of their after-tax profits to a trust compensation reserve. However， a trust and investment corporation may discontinue allocations to its compensation fund once the accumulated amount therein reaches 20% of its registered capital.

　　A trust and investment corporation's compensation reserve shall be deposited in a Chinese-funded commercial bank within China with stable operations and certain strength or used to purchase sovereign bonds.

　　PART FIVE　SUPERVISION， ADMINISTRATION AND SELF-REGULATION

　　Article 51　A trust and investment corporation shall formulate the rules for its trust business and other business， establish and develop sound management systems for all of its businesses and sound internal control systems in accordance with regulations and submit the same to the People's Bank of China for its records.

　　A trust and investment corporation shall establish an internal auditing department to audit and supervise the company's business activities. The internal auditing department shall submit an internal audit report to the board of directors at le

ast once every six months and submit a duplicate of the afore-mentioned report to the People's Bank of China.

　　Article 52　A trust and investment corporation shall set up accounts in accordance with the law， keep separate accounts for its trust business and non-trust business and keep independent accounts for each item of trust business. The specific financial and accounting systems shall comply with the relevant provisions by the Ministry of Finance.

　　Article 53　A trust and investment corporation shall， in accordance with the relevant State regulations， establish and develop its own sound financial and accounting systems that truthfully record and comprehensively reflect its business activities and financial position. The company's annual financial and accounting statements shall be audited by a certified accountant with the appropriate qualifications.

　　A trust and investment corporation shall submit such relevant materials as business reports， financial and accounting statements on its trust business and non-trust business， trust account list， etc. to the People's Bank of China and other relevant authorities in accordance with regulations.

　　Article 54　A trust and investment corporation's trust business department shall， in terms of its business， be independent from the corporation's other departments， its personnel may not hold concurrent posts in other departments of the corporation and its specific business information may not be shared with the corporation's other departments.

　　Article 55　The People's Bank of China may periodically or sporadically inspect trust and investment corporations' business activities. When the People's Bank of China considers it necessary， it may order a trust and investment corporation to engage an intermediary organization with the appropriate qualifications to carry out an audit of its business and financial position.

　　Trust and investment corporations shall submit the relevant business and financial statements and materials and truthfully explain the relevant business details in accordance with the requirements of the People's Bank of China.

　　Article 56　The People's Bank of China submits the senior management personnel of trust and investment corporations to a system for examining their qualifications for their positions. A person who has not had his qualifications for his position examined by the People's Bank of China or who is found not to be qualified after examination and evaluation may not take up his position.

　　A trust and investment corporation shall carry out departure audit on a person in a senior management position that plans to leave office， and the results of such audit shall be submitted to the People's Bank of China for its records. When there is a change to the legal representative of a trust and investment corporation， the incumbent legal representative may not leave his position until the new legal representative has had his qualifications for the position verified and approved by the People's Bank of China.

　　Article 57　The People's Bank of China implements a trust business qualification examination system for the trust staff of trust and investment corporations. Persons who pass such examination will be issued a trust staff qualification certificate by the People's Bank of China. Persons who have not taken or have failed the examination may not engage in trust business. The specific examination procedures will be formulated separately by the People's Bank of China.

　　Article 58　In the event that a member of the senior management or a member of the trust staff of a trust and investment corporation violates laws， administrative regulations or the relevant provisions of the People's Bank of China， the People's Bank of China has the right to revoke his qualifications for his position or his trust business qualifications.

　　Article 59　If the People's Bank of China discovers a major s

hortcoming when overseeing a trust and investment corporation， it has the right to question the trust and investment corporation's senior management personnel and order them to take effective procedures and to rectify the matter within a specified time limit.

　　Article 60　If a trust and investment corporation is poorly managed and its business is in trouble， the People's Bank of China will order it to take procedures to rectify the situation or restructure and propose that its senior management personnel be replaced. If the People's Bank of China considers it necessary， it may assume control over the trust and investment corporation.

　　Article 61　Trust and investment corporations may establish an industry association so as to carry out self-regulation.

　　When the trust and investment corporation association conducts activities， it shall accept the guidance and supervision of the People's Bank of China.

　　PART SIX　PENAL PROVISIONS

　　Article 62　If a trust and investment corporation is established or trust business is engaged in without the approval of the People's Bank of China， such trust and investment corporation or trust business shall be closed down in accordance with the Banning of Illegal Financial Institutions and Illegal Financial Business Activities Procedures and the perpetrators shall be punished.

　　Article 63　If， after it has approved the establishment， modification an

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