(Ratified on August 11, 1995 by the State Council and Promulgated on September 6, 1995 by the People's Bank of China)
Article 1.
We hereby formulate these Measures to accommodate with the needs of opening to the outside world, economic development and strengthening and perfecting the administration of establishment of overseas investment funds for Chinese industries.
Article 2.
Overseas investment funds for Chinese industries (hereinafter referred to as "Overseas Investment Funds") as referred to in these Measures shall mean investment funds to be invested mainly into domestic industrial projects while domestic non-banking financial institutions, non-financial institutions and overseas institutions, of which majority shares shall be held by Chinese investments (which shall be collectively called "Chinese Investment Institutions") sponsors which independently or collectively with the overseas institutions shall initiate the Funds and register and float the capital outside of China.
The sponsors as referred to in these Measures shall mean the Chinese Investment Institutions which establish the Overseas Investment Funds and be legally responsible for the originality, accuracy and completeness of the contents in the prospectus.
Article 3.
The operations of the Overseas Investment Funds shall observe Chinese laws and administrative regulations and shall not harm China's public interests.
The lawful operations and legitimate rights of the Overseas Investment Funds within China are protected by Chinese laws.
Article 4.
The People's Bank of China, together with relevant departments of the State Council shall examine and approve the establishment of the Overseas Investment Funds.
The People's Bank of China together with relevant departments of the State Council shall supervise and administer the operations within China of the Overseas Investment Funds.
Article 5.
If the Chinese Investment Institutions are sponsors of the Overseas Investment Funds, one sponsor shall be a non-banking financial institution meeting the following requirements:
(1) Total amount of capital at the end of the preceding year before application shall not be less than RMB1 billion;
(2) Must have a fine credit reputation, a stable style and no record of any serious punishment by the departments in charge of financial supervision or the judicial offices within the last three years prior to the application;
(3) Have a professional personnel familiar with the international financial business and the administrative business of funds.
Article 6.
The non-financial institutions with Chinese investment included as one of the sponsors of the overseas investment funds shall meet the following requirements:
(1) Total amount of capital at the end of last year prior to the application shall not be less than RMB500 million;
(2) Shall engage in projects supported by the State Industrial Policies;
(3) Must have a fine credit reputation, a stable operation style and no record of any serious punishment by relevant authorities or the judicial offices within the last three years prior to the application;
Article 7.
In the case of choosing overseas investment funds by Chinese Investment Institutions, they shall choose those overseas institutions for cooperation which can provide a fine credit reputation, a stable operational style, experience in such aspects such as establishment, underwriting or administration of investment funds and fine financial management systems at their legal addresses.
Article 8.
In the case of applying for establishment of the Overseas Investment Funds, the sponsors shall provide the following documents and materials to the People's Bank of China:
(1) application forms for establishment of the Overseas Investment Funds;
(2) feasibility study reports;
(3) copies of business licenses of legal persons;
(4) agreements of cooperation of sponsors;
(5) annual reports of the most recent three years;
(6) relevant laws and regulations governing establishment, trust, listing and exchange of the overseas investment funds;
(7) copies of the examination and approval documents issued by the relevant authorities in which the projects shall be investing in;
(8) appraisal reports concerning projects in which the investment shall invest;
(9) joint investment proposals or proposals of cooperation concerning the projects which will be invested in;
(10) drafts of prospectuses of funds;
(11) proposals of cooperation entered into by and among such parties of cooperation as the underwriters, trustees and administrators of the overseas investment funds;
(12) credit information concerning the parties of cooperation relating to the establishment, underwriting and trust of the Overseas Investment Funds.
Article 9.
The People's Bank shall examine the application for establishment of the Overseas Investment Funds within 90 days after receiving all the application documents and materials from the applicants; if the application complies with the conditions stipulated in these Measures, the PBOC, together with relevant departments of the State Council, approve and issue the documents of approval.
Article 10.
The total amount of issuance of the Overseas Investment Funds which shall be established shall not be less than USD50 million.
Article 11.
The Overseas Investment Funds which shall be established shall be the closed funds and the certificates of funds shall not be repurchased, of which the duration of existence shall not be less than 10 years.
Article 12.
The Chinese Investment Institutions shall choose those countries or regions which have fine financial management system for the listing of the Overseas Investment Funds which shall be established.
Article 13.
The Chinese Investment Institutions shall choose the management company as the administrators of the Overseas Investment Funds in which the Chinese party holds 25% or more of the shares.
Article 14.
The total amount of subscribed contribution of the Chinese Investment Institutions shall not exceed 10% of the total amount of the funds which shall be issued.
Article 15.
When the Chinese Investment Institutions subscribe fund contribution, they can only use their own funds and shall not use any credits.
Article 16.
When the domestic sponsors subscribe fund contributions, the capital shall be deposited in domestic banks accepted by the People's Bank and shall not be remitted abroad.
Article 17.
The Overseas Investment Funds shall not be floated within China.
Article 18.
To administer the Overseas Investment Funds, the Chinese Investment Institutions may apply for the establishment of a management company for the Overseas Investment Funds.
The application for the establishment of management company for the Overseas Investment Funds shall observe regulations stipulated in the [Administrative Measures of Overseas Financial Institutions] and shall be submitted for the examination and approval of the People's Bank together with the application for establishment of the Overseas Investment Funds.
When applying for the establishment of a management company for the Overseas Investment Funds, they shall choose those countries or regions where fine financial administration systems could be provided for the main operation centers of these companies.
Article 19.
When management companies of the Overseas Investment Funds establish representative office within China, they shall comply with provisions stipulated in [Administrative Measures Governing Overseas Financial Institutions Establishing Resident Representative Offices within China Issued by the People's Bank of China] and shall submit for the examination and approval of the People's Bank of China.
Article 20.
Money capital of the Overseas Investment Funds shall mainly be invested in industrial projects within China supported by the State Industrial Policies and the amount invested shall not be less than 70% of the total amount of the funds.
The capital of the Overseas Investment Funds shall not be contributed from loans within China.
The Overseas Investment Funds shall not be used to purchase publicly issued Renminbi common shares and governmental securities valued in Renminbi.
Article 21.
The certificates of the Overseas Investment Funds shall not be used for borrowing, lending or mortgaging or guaranteeing any issuance of securities within China.
Article 22.
When the capital of the overseas investment funds are transferred into China, remitted abroad, used to open accounts in banks within China and used for currencies exchanges, they shall comply with relevant State regulations relating to administration of foreign exchanges.
Article 23.
The domestic sponsors and domestic investors of the Overseas Investment Funds and management companies of the Overseas Investment Funds shall submit annual balance sheets, statements of losses and profits and annual reports for the preceding year of the overseas investment and management companies of the Overseas Investment Funds to the People's Bank of China before March 31 of each year.
Article 24.
When the projects in which the Overseas Investment Funds have invested issue securities and shares abroad, they shall comply with relevant regulations issued by the State Council for examination and approval.
Article 25.
When the Overseas Investment Funds or management companies of the Overseas Investment Funds are established without approval or without authority, the People's Bank of China shall impose a fine of RMB500 thousand to RMB2 million on the domestic sponsors and domestic investors, order them out of the established offices and shall impose a disciplinary punishment on all principals directly responsible; should the case be serious enough to constitute a crime, criminal liability shall be pursued in accordance with relevant laws.
Article 26.
When the funds or companies in violation of the regulations stipulated in Article 23 of these Measures and fail to submit relevant reports or have practiced fraud in submitting reports, and if the cases are serious, the People's Bank of China shall order them to rectify the situation and impose a fine of RMB200 thousand to RMB500 thousand on the domestic sponsors.
Article 27.
If the Overseas Investment Institutions and management companies of the Overseas Investment Funds were established before the implementation of these Measures have not obtained approvals, they shall go through additional formalities of examination and approval within the prescribed limit set by the People's Bank of China according to provisions stipulated in these Measures; if the institutions or companies refuse to go through additional formalities, the People's Bank has the right to punish those according to provisions stipulated in Article 25 of these Measures.
Article 28.
These Measures shall be implemented as of the promulgation date.
