FAQs on the Requirements for the Application of the Fund Distribution License in China by Foreign-funded Banks
Q: When the New Measures come into effect.
A: The New Measures for the Administration of Sale of Securities Investment Fund (“New Measures”) promulgated by the China Securities Regulatory Commission (“CSRC”) on 21 June 2011 will come into effect as of 1 October 2011.
Q: What are the general requirements?
A: General requirements refer to those requirements that all institutions which may apply for the License as stipulated by the CSRC should meet, which include:
1. to have sound corporate governance structure, sophisticated internal control and risk control systems which are effectively executed;
2. with financial status in good condition and operating in compliance and with stability;
3. to have business premises, safety protection facilities and other facilities corresponding to fund distribution business;
4. to have safe and highly efficient technical facilities for handing the businesses of the launch, subscription and redemption of funds, etc., which meet the relevant requirements of the CSRC for information management platforms of fund distribution business; an interconnection test have already been conducted on the technical systems for fund distribution business with the corresponding technical systems of the fund manager and the China Securities Depository and Clearing Co., Ltd. and the test results meet the national standard;
5. to have formulated a sophisticated process for fund settlement; and the capital management are in compliance with the relevant requirements of the CSRC in respect of capital management in fund distribution settlement;
6. to have the methods and systems to assess fund investors’ risk tolerance and risk levels of fund products;
7. to have established sound fund distribution business management systems for business process, professional conduct of sales personnel and emergency treatment measures, etc., which meet the relevant requirements of the CSRC for the internal control of fund distribution institutions;
8. to have an internal control system for anti-money laundering which satisfies the requirements of the laws and regulations; and
9. other conditions as prescribed by the CSRC.