Fund companies set up institutions in Hong Kong：Approval application、Licensing and investment regulation

Basic rules for mainland fund management companies to establish institutions in Hong Kong

Fund management company plans to establish an institution in Hong Kong，You should also pay attention to the China Securities Regulatory Commission’s approval requirements for overseas establishments.、Hong Kong Securities and Futures Commissionaboutregulated activitieslicensing or registration requirements，and the investment quota involved in the subsequent development of domestic securities investment business.、hosting、Account、Information submission and capital flow supervision arrangements。

Hong Kong institutions can adopt branches、office、Subsidiaries and other forms permitted by the China Securities Regulatory Commission。The establishment entity should meet the basic conditions for the establishment of branches of fund management companies in the "Administrative Measures for Securities Investment Fund Management Companies" (CSRC Order No. 22)。Hong Kong institutions can develop fund types、Fund sales and other business activities authorized by the company。

Corporate governance and internal control conditions for establishing a Hong Kong institution

Fund management company applies to establish an institution in Hong Kong，Should have sound corporate governance、Sustainability and sound internal control mechanism，and meet the following core conditions：

1. Sound corporate governance，Improved internal control，Stable operation，Have strong ability to continue operating。
2. The company has not received any administrative penalties or criminal penalties due to violations of laws and regulations in the past year.。
3. The company is not under investigation by regulatory agencies for any violations of laws or regulations.，and is not in the rectification period。
4. The branch to be established must have a name that meets the regulations、office space、Business personnel and other business-related facilities。
5. The responsibilities of the proposed branch are clearly defined，and establish a sound management system。
6. Meet other conditions stipulated by the China Securities Regulatory Commission。

Application and establishment process

Fund management companies set up institutions in Hong Kong，After a resolution is passed by the board of directors or shareholders' meeting,，Submit application materials to the China Securities Regulatory Commission in accordance with relevant regulations。Application period，If there are major changes to the matters involved in the application materials，The applicant should submit updated materials to the China Securities Regulatory Commission within 5 days from the date of the change.。

1. Submit application materials within 15 days from the date the board of directors or shareholders meeting makes a resolution。
2. The China Securities Regulatory Commission will review and make a decision after accepting an application from a fund management company to establish a branch.；when necessary，The China Securities Regulatory Commission may conduct on-site inspections of proposed branches。
3. Fund management company establishes branch，Registration procedures should be completed within 30 days from the date of receipt of the approval document。

China Securities Regulatory Commission examines fund management companies’ applications to establish offices in Hong Kong，And make a decision on approval or disapproval within 60 days from the date of acceptance.。The approval decision is valid for 6 months，The fund management company should complete the establishment of the Hong Kong institution within the validity period of the approval decision。

Fund management companies should also comply with the law、Administrative regulations and regulations of the China Securities Regulatory Commission，will be established、Announcement of the cancellation of branches。

Application materials list

Application materials usually require one original copy、1 copy，and around the need to establish、business arrangements、governance structure、Full explanation of risk isolation and legal compliance。

1. Explanation of the impact of establishing a Hong Kong institution on the company's own operations。
2. Resolution of the board of directors or shareholders' meeting。
3. business plan，At least include the necessity to establish an institution in Hong Kong、Market environment and legal environment analysis。
4. Management arrangements for Hong Kong institutions，At least include arrangements for the proposed person in charge and key business personnel、Systems and measures for the management of Hong Kong institutions、Risk isolation measures, etc.。
5. Legal opinion issued by a law firm。
6. Other materials required by the China Securities Regulatory Commission。

Hong Kong Institutional Risk Segregation and Continuous Reporting Requirements

Fund management companies should formulate and implement risk isolation measures with Hong Kong institutions，Strengthening risk management of Hong Kong institutions，Prevent Hong Kong institutional operating risks from damaging the normal operations of fund management companies。

Within 15 days from the date the following events occur，Fund management companies should report to the China Securities Regulatory Commission and the local branch of the China Securities Regulatory Commission where the company operates.：

1. The Hong Kong institution completed registration and obtained business license from Hong Kong regulatory authorities。
2. make changes、Revoke decision of Hong Kong institution。
3. Make changes to the amount of investment in Hong Kong institutions、Determination of shareholding ratio or equity structure of Hong Kong institutions。
4. Hong Kong organizationResponsible personchanges。

Fund management companies should follow the law、Administrative regulations and regulations of the China Securities Regulatory Commission，will be established、Announcement of changes or cancellation of Hong Kong institutions。

Any of the following circumstances occurs to a Hong Kong institution:，The fund management company shall report to the China Securities Regulatory Commission and the dispatched office of the China Securities Regulatory Commission where the company operates within 5 days from the date of occurrence.：

1. Hong Kong institutions and their personnel are investigated or punished。
2. Significant changes in the financial status of Hong Kong institutions。
3. After Hong Kong regulatory authorities conducted on-site inspections of Hong Kong institutions。
4. Other events that have a significant impact on the company's operations。

Hong Kong Securities and Futures Commission licensing or registration requirements

Providing asset management services in Hong Kong，A regulated activity under the Securities and Futures Ordinance of Hong Kong，Usually you need to apply to the Securities and Futures Commission of Hong Konglicenseor register。Non-approved financial companies need to apply for a license，Approved financial companies need to register。

Certain business arrangements may qualify for exemptions，Specifically include：

1. Specific situations involving futures trading business，Exemption from application for license or registration。
2. Involving futures and securities transactions，And the transaction objects are only professional investors，Exemption from licensing or registration。
3. Providing investment advice or services to other wholly-owned subsidiaries，Exemption from application for license or registration。

Qualifications and competencies of entities applying for Hong Kong licenses

Organizations applying for a license from the Securities and Futures Commission of Hong Kong，Must be a company incorporated in Hong Kong，Or an overseas company registered with the Hong Kong Companies Registry。Applicants also need to have a suitable business structure、Good internal control system and qualified personnel，To demonstrate their competence to carry out relevant regulated activities。

Responsible personnel arrangement

The Hong Kong Securities Regulatory Commission has clear requirements for the arrangement of responsible personnel，License applicants should complete a governance structure before applying、Job responsibilities、executive Directorand responsible for staffing。

1. At least two responsible officers must be appointed for each type of regulated activity，Directly supervise relevant activities。
2. without causing conflict，The same person may be appointed to supervise more than one type of regulated activity。
3. At least one of the responsible officers must be an executive director as defined in the Securities and Futures Ordinance。
4. All executive directors must seek approval from the Securities and Futures Commission of Hong Kong。
5. When submitting your license application，All applications for approval of proposed responsible officers should be submitted to the Securities and Futures Commission of Hong Kong。
6. Major shareholders and other relevant persons must have appropriate qualifications。
7. Applicants must meet relevant financial resource requirements。

Pilot supervision of domestic securities investment by Hong Kong subsidiaries

Hong Kong subsidiary invests in domestic securities market，Subject to approval by China Securities Regulatory Commission，And obtain the investment quota approved by the State Administration of Foreign Exchange。The China Securities Regulatory Commission supervises and manages the domestic securities investments of Hong Kong subsidiaries in accordance with the law.；The People's Bank of China manages the RMB bank accounts opened by Hong Kong subsidiaries within the country in accordance with the law.；The State Administration of Foreign Exchange manages the investment quota of Hong Kong subsidiaries in accordance with the law.；The People's Bank of China, together with the State Administration of Foreign Exchange, monitors and manages the inward and outward remittances of funds in accordance with the law.。

when conducting business，Hong Kong subsidiaries should entrust a domestic commercial bank with the qualification of a qualified foreign institutional investor custodian to be responsible for the asset custody business，And entrust domestic securities companies to act as agents for buying and selling securities.。Hong Kong subsidiaries can also entrust domestic fund management companies、Securities companies conduct domestic securities investment management。

Qualification conditions for domestic securities investment business

Hong Kong subsidiary applies to carry out domestic securities investment business，Focus on meeting the following qualification requirements：

1. Financially sound，Good credit standing。
2. Effective corporate governance and internal controls，Practitioners meet the relevant qualification requirements in Hong Kong。
3. Code of business conduct for the applicant and its domestic parent company，No major penalties have been imposed in the past 3 years。
4. The applicant’s domestic parent company is qualified for securities asset management business。
5. Comply with other conditions stipulated by the China Securities Regulatory Commission in accordance with the principles of prudential supervision。

Application materials for domestic securities investment business

When applying for domestic securities investment business，Should focus on subject qualifications、regulatory clearance、internal control、Source of funds、Escrow arrangements and legal compliance submissions。

1. Authenticity of application materials、accuracy、integrity、Compliance Commitment。
2. Copy of organization registration certificate。
3. A copy of the asset management business license issued by the Hong Kong Securities Regulatory Authority。
4. An explanation of whether the applicant and its domestic parent company have been punished by local regulatory authorities in the past three years。
5. Proof that the applicant’s key personnel meet the relevant professional qualification requirements in Hong Kong。
6. Description of fund sources and domestic securities investment plan。
7. Description of the applicant’s company’s internal control system。
8. Audited financial report for the previous fiscal year。
9. Draft custody agreement signed with domestic custodian。
10. legal opinion。
11. Other documents required by the China Securities Regulatory Commission。

Investment quota application materials

Application for investment quota should be submitted to the State Administration of Foreign Exchange，and provide securities investment plans upon request、business license、Materials related to custody authorization and foreign exchange management。

1. Securities investment plan and other materials。
2. A copy of the securities investment business license issued by the China Securities Regulatory Commission。
3. Notarized power of attorney for the custodian。
4. Other materials required by the State Administration of Foreign Exchange。

The China Securities Regulatory Commission and the State Administration of Foreign Exchange will make a decision on approval or disapproval within 60 days from the date of receipt of complete application documents.，and give written approval。

investment supervision、Information disclosure and capital flow requirements

Hong Kong subsidiaries invest in RMB financial instruments within the approved investment quota，Should comply with relevant regulatory requirements，Investment types and proportions are determined by the China Securities Regulatory Commission and the People's Bank of China。Hong Kong subsidiary invests in the interbank bond market，Should be handled in accordance with relevant regulations of the People’s Bank of China。

Hong Kong subsidiary launches pilot domestic securities investment business，Should comply with China’s regulations on shareholding ratios、Information disclosure and other laws and regulations，and other relevant regulatory requirements。

Hong Kong subsidiaries should comply with the regulations of the People’s Bank of China，Submit RMB fund remittance and inward information to the People's Bank of China's RMB cross-border payment information management system through the custodian bank.。

Fund remittance in and out，Hong Kong subsidiaries should follow the relevant requirements for investment quota management。Hong Kong subsidiaries can remit principal and investment income in RMB or by purchasing foreign exchange.。

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