Measures for the Administration of Trust Companies' Trust Plans of Aggregate Funds

Measures for the Administration of Trust Companies' Trust Plans of Aggregate Funds Chapter I General Rules Article 1 With a view to regulating the operation of the trust business of aggregate funds of trust companies and safeguarding the legitimate rights and interests of all parties concerned in the trust plans of aggregate funds, the present Measures are formulated according to the Trust Law of the People's Republic of China, the Banking Supervision Law of the People's Republic of China and other laws and regulations. Article 2 The present Measures shall apply to the business activities of fund trusts conducted under the trust plans of aggregate funds (hereinafter referred to as trust plans), which are established within the territory of the People's Republic of China, and of which the trust companies act as trustees and conduct centralized management, operation or disposal of the funds trusted by two trustors or more in light of wills of the trustors and for the interests of the beneficiaries. Article 3 The properties of trust plans of a trust company shall be separated from its inherent properties. No trust company may incorporate the properties of trust plans into its inherent properties. The properties and proceeds, obtained by the trust company from the management, operation of the properties of trust plans or any other circumstance, shall be incorporated into the properties of trust plans of the company. In case a trust company goes through the procedures for account liquidation for reasons such as being disbanded according to law, being cancelled according to law, being declared bankruptcy according to law or any other reason, the properties of trust plans may not fall into the liquidation properties. Article 4 When managing and operating the properties of trust plans, the trust companies shall earnestly fulfill their duties, perform the obligations of honesty, good faith, prudence and diligence and serve for the best interests of the beneficiaries. Chapter II Establishment of Trust Plans Article 5 When establishing a trust plan, the trust company shall meet the following requirements: (1) The trust or shall be a qualified investor; (2) The trust or participating in the trust plan shall be the sole beneficiary; (3) The number of the natural persons involved in a single trust plan may not exceed 50, while the number of qualified institution investors is not restricted; (4) The trust period shall be one year or more; (5) There are clear investment orientation and investment strategies for the trust capital, which shall also be in line with the industrial policies of the state and other relevant provisions; (6) The trust beneficiary right shall be divided into trust entities of equivalent units; (7) The trust contract shall prescribe the remuneration for the trustee. And except for fair remunerations, the trust company may not seek any profit for itself or anyone else either directly or indirectly by using the trust properties under any name; (8) Other requirements as prescribed by China Banking Regulatory Commission. Article 6 The term "qualified investor" as mentioned in the preceding paragraph refers to a person who meets any of the following conditions and is able to identify, judge and assume the corresponding risks of a trust plan: (1) a natural person, legal person or an organization established according to law, whose minimum investment in a trust plan is 1 million Yuan or more; (2) a natural person whose total individual or family financial assets exceed 1 million Yuan at the time when he/she subscribes the trust plan and who can provide the relevant property certificate; (3) a natural person whose annual income exceeds 200,000 Yuan for the latest three years or whose annual income plus the annual income of his/her spouse exceeds 300,000 Yuan for the latest three years and who can provide the relevant income certificate. Article 7 When recommending a trust plan, the trust company shall have normative and detailed materials for information risk-return disclosure, expressly of the display trust the plan, characteristics sufficiently instate the risks involved in the trust plan and risk-assuming principles, truthfully disclose the curriculum vitae, professional training and practical experience of the professional team of the trust plan, and may not make any misleading statement that may affect the judgments on independent risk of the investors. Where a trust company recommends a trust plan at any place other than the place where it is located, it shall, prior to the recommendation, report to the provincial dispatched office of China Banking Regulatory Commission at the place of registration or the place where the recommendation is to be made. Article 8 When recommending a trust plan, the trust company may not commit any of the following acts: (1) promising in any way that the trust capital will suffer no loss, or guaranteeing in any way the minimum return of the trust capital; (2) conducting public marketing and publicity; (3) entrusting any non-financial institution to recommend the trust plan; (4) the recommending materials have any content inconsistent with the trust document, or have any false record, misleading statement or great omission, etc; (5) exaggerating the past business performance of the company or maliciously debasing any other company of the same industry; (6) other acts as prohibited by China Banking Regulatory Commission. Article 9 To set a trust plan, the trust company shall conduct duteous investigation beforehand and produce a duteous investigation report on issues such as feasibility analysis, legality, risk evaluation and whether there is any affiliated transaction and etc.. Article 10 The document of a trust plan shall include the following items: (1) the declaration of subscription risks; (2) the instatement letter of the trust plan; (3) the trust contract; (4) other items as prescribed by China Banking Regulatory Commission. Article 11 The declaration of subscription risks of a trust plan shall at least include the following contents: (1) The trust plan does not promise the break-even principal and minimum proceeds, and has certain investment risks and is suitable for the qualified investors of relatively strong capacity of identifying, evaluating and bearing risks; (2) The trust or shall subscribe trust entities with its own lawful capital, and may not participate in the trust plan by illegally assembling the capital of others; (3) The risks generated from the management of trust properties by trust companies in light of the document of the trust plan shall be born with the trust properties. The losses suffered by the trust properties due to the trust company's violation of the document of the trust plan or improper transacting of trust affairs shall be compensated by the trust company with its inherent properties. In case its inherent properties are not sufficient to make the compensation, the losses shall be born by the investors themselves; (4) The signature of the trust or on the declaration of subscription risks indicates that the trust or has carefully read and understood all the documents of the trust plan and is willing to assume the corresponding trust investment risks according to law. The declaration of subscription risks shall be in duplicate, and give clear indication of the number of the trust entities the trust or has subscribed. One shall be held by the trust company, and the beneficiary shall hold the other. Article 12 The instatement letter of a trust plan shall at least include the following contents: (1) the basic information of the trust company; (2) the name and major contents of the trust plan; (3) the summary of the trust contract; (4) the recommending date, time limit of the trust plan and trust unit price; (5) the name of the institution responsible for recommending the trust plan; (6) the name list and curriculum vitae of the trust managers; (7) the legal opinion produced by a law firm; (8) risk-warning contents; (9) other content as prescribed by China Banking Regulatory Commission. Article 13 The trust contract shall indicate the following items: (1) the purpose of the trust; (2) the name and domicile of the trustee or the custodian; (3) the currency and value of the trust capital; (4) the scale and time limit of the trust plan; (5) the specific measures or arrangements for the management, operation and disposal of the trust capital; (6) the calculation of trust proceeds, and the time and method for delivering trust proceeds to the beneficiaries; (7) assuming of the expenses of taxation on trust properties, and the calculating method and mode for the payment of other expenses; (8) the calculation method, payment period and mode of payment of the trustee's remunerations; (9) the ownership and mode of distribution of the trust properties at the time when the trust is terminated; (10) the rights and obligations of the parties concerned to the trust; (11) the procedures and rules for the convening, deliberation and voting of the beneficiaries' meeting; (12) the method for selecting new trustee; (13) disclosure of risks; (14) liabilities for breach of contract of the parties concerned to the trust, and the method for the settlement of disputes; (15) other issues as stipulated by the trust parties. Article 14 The following words shall be indicated with eye-catching fonts at the right top of the first page of the trust contract: During the management of trust properties, the trust company shall be devoted to its duties and perform the obligations of honesty, good faith, prudence and effective management. The risks generated during the management of trust capitals according to this trust contract shall be assumed with the trust properties. And the trust company shall compensate for the losses of trust capitals occurred due to its violation of the trust contract or improper transacting of trust affairs with its inherent properties; in case the inherent properties are not sufficient for the compensation, the investors shall assume the losses by themselves. Article 15 When subscribing trust entities, a trust or shall carefully read all the contents of the document of the trust plan and sign on the declaration of subscription risks, indicating the willfulness of the trust or to bear the investment risks of the trust plan. The trust company shall facilitate the trust or consultation or copying all the documents of trust plans, and shall provide the original trust contracts for the tractors. Article 16 When recommending a trust plan, the trust company may conclude an agency agreement on the receipt and payment of trust capital. Where a trustor subscribes trust entities with cash, the trust company may entrust a commercial bank to be responsible for the receipt and payment of the cash upon agency. Where a trust company entrusts a commercial bank to undertake the business of collecting the payments involved in a trust plan, the rights and obligations of both parties shall be clearly defined, and the commercial bank shall only assume the responsibility for capital receipt and payment upon agency, not assume the investment risks of the trust plan. The trust company may entrust a commercial bank to recommend a trust plan to qualified investors upon agency. Article 17 Where the conditions for the establishment of a trust plan as stipulated in the trust document are not satisfied upon the expiration of the recommending period of the trust plan, the trust company shall return the money paid by the trust or together with the bank deposit interests of the same term within 30 days as of the expiration of the recommending period. And the relevant liabilities and fees occurred there from shall be assumed by the trust company with its inherent properties. Article 18 After the establishment of a trust plan, the trust company shall deposit the properties of the trust plan into and the special disclose the account for trust situation on the properties, recommendation and establishment of the trust plan to the trust or within 5 workdays. Chapter III Custody the Properties of Trust Plans Article 19 The custody system shall apply to the capitals of trust plans. As for non-cash trust properties, the parties concerned to the trust may stipulate to have the properties kept by a third party. If it is prescribed otherwise by China Banking Regulatory Commission, the relevant provisions shall prevail. During the period of continued existence of a trust plan, the trust company shall choose a commercial bank with sound and stable operation performance to act as the custodian. And the custody account and special account of the trust properties shall be the same. Where the trust company needs to use the trust capital according to the stipulations of the document of the trust plan, it shall provide a photocopy of the trust contract and instatement on the purpose of the capital for the custodian in written form. Article 20 The custody agreement shall at least include the following contents: (1) the name and domicile of the trustee or the custodian; (2) the rights and obligations of the trustee or the custodian; (3) the place, contents, method and standards for custody of the properties of the trust plan; (4) the contents and format of the custody report; (5) custody charges; (6) the business supervision and examination conducted by the custodian on the trust company; (7) other contents as stipulated by the parties to the trust. Article 21 A custodian shall perform the following duties (1) safekeeping the trust properties; (2) setting different accounts for different trust plans under its custody, so as to guaranteed the independency of the properties of each trust plan; (3) confirming and executing the trust company's instructions on the management and operation of the trust properties, checking the transaction records of trust properties, capital accounts and property accounts; (4) recording the transfer of trust capital, and keeping the instatements on the purpose of capital of the trust company; (5) producing a custody report to the trust company on a regular basis; (6) other duties as stipulated by the parties to the trust. Article 22 When encountering the circumstance that a trust company operates by violating any law or regulation, the trust contract or the custody agreement, the custodian shall immediately notify the trust company to make corrections in written form; in case any gross violation is committed or an incident that severely affects the safety of trust properties occurres, the custodian shall report it to China Banking Regulatory Commission in a timely manner. Chapter IV Operation and Risk Management of Trust Plans Article 23 When managing a trust plan, the trust company shall set up a department responsible for the operation of trust capital and information disposal so as to serve the trust plan, and appoint trust managers and relevant working personnel. At least one trust manager shall be arranged for each trust plan. And the personnel assuming the post of trust manager shall meet the conditions as stipulated by China Banking Regulatory Commission. Article 24 The trust company shall set separate accounting accounts and conduct separate business accounting and management for different trust plans. Article 25 The trust company may conduct assembled operation of trust capital, and shall set up an explicit scope of application and investment proportion for it. When using trust capital for securities investment, the trust company shall adopt the mode of property portfolio, formulate investment proportions and investment strategies in advance and take effective measures to keep away risks. Article 26 The trust company may use trust capital by way of creditor's rights, stock rights, property rights or any other feasible way. The trust company shall operate the trust capital of a trust plan in light of the investment orientation and investment strategy as stipulated in the document of the trust plan. Article 27 When managing trust plans, the trust company shall accord with the following provisions: (1) It may not provide guarantee for any other person; (2) The loans it provides to any other person may not exceed 30% of the paid-in balance of all the trust plans subject to its management; (3) It may not directly or indirectly operate the trust capital for its shareholders or their affiliated parties, except for the circumstance wherein all the trust capital comes from the shareholders or their affiliated parties; (4) It may not undertake any transaction between the inherent properties and trust properties; (5) It may not undertake any transaction between different trust properties; (6) It may not invest in a same project the trust properties of different trust plans under the management of the same company. Article 28 The trust proceeds gained by a trust company from its management of a trust plan shall be handed over to the custodian of the company for custody, if no any other operation way is stipulated in the document of the trust plan, and nobody may misappropriate the proceeds. Chapter V Modification, Termination and Liquidation of Trust Plans Article 29 During the period of continual existence of a trust plan, the beneficiary of the trust plan may assign the trust entities held under the trust plan to a qualified investor. And the trust company shall go through the relevant formalities for the assignment of beneficiary rights for the beneficiary. Where the beneficiary rights are assigned by dividing it into smaller parts, the assignees may not be a natural person. The trust beneficiary rights held by an institution may not be assigned either as a whole or by dividing it into smaller parts to natural persons. Article 30 Under any of the following circumstances, the trust plan shall be terminated: (1) The trust contract expires; (2) Termination is decided by the beneficiaries' meeting; (3) The trustee's duties are terminated, and no new trustee is selected according to relevant provisions; (4) Other circumstances as stipulated in the document of the trust plan. Article 31 Upon the termination of a trust plan, the trust company shall produce a liquidation report on the disposal of trust affairs within 10 workdays as of its termination and disclose the report to the beneficiaries after it is audited. Where it is stipulated in the trust document that it is not necessary to audit the liquidation report, the trust company may submit the un-audited liquidation report. Article 32 The post-liquidation trust properties shall be distributed in light of the proportions of trust entities held by the beneficiaries as stipulated in the trust contract. The properties may be distributed by way of cash, by maintaining the primary status of the properties at the time when the trust is terminated or in combination of the two ways. Where the way of cash distribution is adopted, the trust company shall change the trust properties into cash before the date when distribution is due as stipulated in the document of the trust plan or the date of expiration of the trust, and deposit the cash into the accounts of the beneficiaries. Where the way of maintaining the primary status of the properties at the time when the trust is terminated is adopted, the trust for company shall complete to the the formalities assigning properties beneficiaries within the stipulated time limit after the trust period expires. The trust company shall be responsible for safeguarding the trust properties before they are assigned. During the custody period, the trust company may not use any of the properties. And the proceeds generated during the custody period shall be counted into the trust properties, while the custody fees occurred during that period shall be deducted from the trust properties. In case it is impossible to assign the trust properties due to the beneficiary's reason, the trust company may dispose them according to relevant laws and regulations. Article 33 The with trust the company trust shall conduct actually distribution proceeds generated from its management of trust plans. It is strictly forbidden from incorporating trust proceeds into its inherent properties or misappropriating other trust properties to make advance payment for the losses or proceeds of any trust plan. Chapter VI Information Disclosure and Supervision and Management Article 34 The trust company shall make information disclosure according to the provisions of relevant laws and regulations and the stipulations of the documents of trust plans, and guarantee the authenticity, accuracy and integrity of the information disclosed. Article 35 The beneficiaries are entitled to inquiring the trust company on the information related to the beneficiary's trust properties. And the trust company shall, under the premise of not damaging the legitimate rights and interests of any other beneficiary, provide relevant information in an accurate, timely and complete way, and may not refuse or shuffle it. Article 36 After the establishment of a trust plan, the trust company shall, in light of different trust plans, prepare a report on the management of trust capital and the statement on the operation and proceeds of trust capital on a quarterly basis. Article 37 The report on the management of trust capital shall at least include the following contents: (1) condition on the opening of the special account for trust properties; (2) condition on the management, operation, disposal and proceeds of trust capital; (3) condition on the change of trust managers; (4) instatement on the major changes of the operation of trust capital; (5) circumstances under which a litigation is involved or the properties of the trust plan or the interests of a beneficiary are damaged; (6) other contents as stipulated in the document of the trust plan. Article 38 Where a trust plan is under any of the following circumstances, the trust company shall disclose the relevant information to the beneficiaries within 3 workdays after it is informed of the situation, and bring forward the responding measures to be adopted to the beneficiaries in written form within 7 workdays as of the date of the disclosure: (1) The trust properties may suffer gross losses; (2) The financial condition of the party using the trust capital is seriously deteriorated; (3) The party guaranteeing the trust plan can't continue providing effective guarantee. Article 39 The trust company shall properly keep and manage all the materials of a trust plan for 15 years or more as of the end of the trust plan. Article 40 China Banking Regulatory Commission shall conduct on-site inspection and off-site supervision on the management of trust plans of trust companies, and require trust companies to provide relevant materials on the management of the trust plans. Where China Banking Regulatory Commission finds out any violation of any trust company during its on-site inspection or off-site supervision, it shall adopt regulatory measures such as suspending the trust company's business or restricting its shareholders' rights and etc, in accordance with the Banking Supervision Law of the People's Republic of China and other relevant laws and regulations. Chapter VII Beneficiaries' Meeting Article 41 The beneficiaries' meeting of a trust plan shall consist of all the beneficiaries of the trust plan, and shall exercise its functions and powers according to the provisions of the present Measures. Article 42 Under any of the following issues, in case it is not stipulated in the document of the trust plan beforehand, the beneficiaries' meeting shall be held to make deliberation and decision: (1) The trust contract is terminated ahead of schedule or the trust period is prolonged; (2) The operation mode of the trust properties is changed; (3) The trustee is changed; (4) The rates for paying the trustee are raised; (5) Other issues under which it is necessary to hold the beneficiaries' meeting as stipulated in the document of the trust plan. Article 43 The trustee shall be responsible for convening the beneficiaries' meetings. In case the trustee fails to convene meetings in accordance with the relevant provisions or can't convene the meetings for certain reasons, the beneficiaries representing 10% or more of the trust entities have the right to convene meetings by themselves. Article 44 When convening a beneficiaries' meeting, the convener shall announce the time and form of the beneficiaries' meeting, issues to be deliberated, agenda and voting methods, etc, at least 10 workdays before. The beneficiaries' meeting may not vote on any unannounced issue. Article 45 The beneficiaries' meeting may be convened on site or by way of communication. Each trust entity has one vote, and a beneficiary may entrust an agent to present the beneficiaries' meeting and exercise the voting power. Article 46 The beneficiaries' meeting may not be held unless it is attended by the beneficiaries of 50% or more of the trust entities. When making a decision on an issue to be deliberated, the consent of 2/3 or more of all the beneficiaries that enjoy the voting power and participate in the meeting shall be obtained. However, as for the modification of trustee, the operation mode of trust properties or the termination of trust contract ahead of schedule, the consent of all the beneficiaries participating in the meeting shall be obtained. The issues decided by the beneficiaries' meeting shall be notified to the relevant parties concerned in a timely manner, and reported to China Banking Regulatory Commission. Chapter VIII Penalty Provisions Article 47 Where any trust company establishes any trust plan by violating the provisions of the present Measures, China Banking Regulatory Commission shall order it to make corrections; in case the trust company fails to do so within the prescribed time limit, it shall be imposed upon a fine of not less than 100,000 Yuan but not more than 300,000 Yuan; in case the circumstance is particularly serious, China Banking Regulatory Commission may order it to suspend its business for rectification or cancel its financial license. Article 48 Where any trust company recommends any trust plan by violating the relevant provisions of the present Measures, China Banking Regulatory Commission shall order it to stop the recommendation, return the funds raised and the corresponding bank deposit interests of the same term, and impose upon it a fine of not less than 200,000 Yuan but not more than 500,000 Yuan; if a crime is constituted, it shall be subject to the criminal liabilities according to law. Article 49 Where any trust company manages the trust plans by violating the relevant provisions of the present Measures, China Banking Regulatory Commission shall order it to make corrections; if it has any illegal gains, the illegal gains shall be confiscated and it shall be imposed upon a fine of not less than the illegal gains but not more than five times of the illegal gains; if it has no illegal gains, it shall be imposed upon a fine of not less than 200,000 Yuan but not more than 500,000 Yuan; if the circumstance is particularly serious or it fails to make corrections within the prescribed time limit, China Banking Regulatory Commission may order it to suspend its business for rectification or cancel its financial license; if a crime is constituted, it shall be subject to the criminal liabilities according to law. Article 50 Where any trust company fails to make information disclosure according to the present Measures, or the information it discloses has any false record, misleading statement or major omission, China Banking Regulatory Commission shall order it to make corrections and impose upon it a fine of not less than 200,000 Yuan but not more than 500,000 Yuan; if any beneficiary suffers losses from it, it shall assume the liabilities of compensation according to law. Article 51 Where there is any violation of the establishment or management of any trust plan of a trust company, China Banking Regulatory Commission may adopt corresponding punishment measures according to the Banking Supervision Law of the People's Republic of China and other relevant laws and regulations. Chapter IX Supplementary Provisions Article 52 Where a same project involves two or more single capital trusts, the trustor shall be a qualified investor that conforms to the provisions of the present Measures, and shall be subject to the present Measures. Article 53 The transfer of the beneficiary right of a movable property trust, real estate trust or a trust of any other property or property right by dividing it into smaller parts shall be subject to relevant provisions of the present Measures. Article 54 The power to interpret the present Measures shall remain with China Banking Regulatory Commission. Article 55 The present Measures shall go into effect as of March 1st, 2007, and the Interim Measures for the Administration of Capital Trust of the Trust and Investment Companies (Order No.7 [2002] of the People's Bank of China) shall not be applied any more.