Shanghai FTZ Finance

Polices and Measures on Capital Market for Supporting and Promoting China (Shanghai) Pilot Free Trade Zone

2014-11-11

China Securities Regulatory Commission           

29 September 2013

In accordance with the important strategic plan by the Central Government for building the China (Shanghai) Pilot Free Trade Zone ("FTZ”), the China Securities Regulatory Commission (“CSRC”) will deepen the capital market reform, further promote the opening-up and support the FTZ. The specific measures include:

1.  The CSRC will consent to the founding of the Shanghai International Energy Trading Center Co., Ltd. (the Company) in the FTZ by the Shanghai Futures Exchange. The Company will be responsible for enhancing the establishment of a trading platform of international crude oil futures. Foreign investors will be fully introduced to participate the domestic futures trading based on the platform and the CSRC will take this opportunity to promote the opening-up in Chinese futures market.

2.  The CSRC supports qualified entities and individuals in the FTZ to make investments in foreign and domestic securities and futures markets in accordance with relevant regulations. Financial institutions and enterprises in the FTZ may carry out investments and trading in securities and futures exchanges of Shanghai in accordance with relevant regulations. Qualified foreign individuals who are employed in the FTZ may set up special nonresident individual accounts with securities and futures institutions in the FTZ to carry out investments in domestic securities and futures market in accordance with relevant regulations. Qualified financial institutions and enterprises in the FTZ and qualified individuals who are employed in the FTZ may carry out investments in foreign securities and futures market in accordance with relevant regulations.

3.  Foreign parents of enterprises in the FTZ may issue RMB bonds in domestic markets in accordance with relevant regulations. Depending on the market needs, the CSRC will explore to introduce the trading of international financial assets in the FTZ.

4.  The CSRC supports securities and futures institutions to register and set up specialized subsidiaries in the FTZ. Currently, institutions like Haitong Futures, Hongyuan Futures, GF Futures, Shenyin & Wanguo Futures and HuaAn Funds are setting up or preparing to set up risk management subsidiaries and assets management subsidiaries in the FTZ.

5.  The CSRC supports securities and futures institutions in the FTZ to carry out over-the-counter (“OTC”) transactions of commodities and financial derivatives for domestic clients.

The CSRC, in the next step, will further research and refine relevant polices and measures, establish implementations rules as soon as possible, enhance supervision and management for related pilot work, summarize experiences on a timely basis, stably promote opening up in capital market, strengthen the active role of service and economy transformation in capital market, and better serve the national strategy of the Shanghai Pilot Free Trade Zone.