Article 1 The present Law is enacted with a view to regulating the activities concerning securities investment fund, to protect the legitimate rights and interests of the investors and other relevant parties, and to promote the healthy development of securities investment fund and securities market.

Article 2 The present Law shall apply to the securities investment activities conducted through the method of portfolio and through public offering of fund shares to raise securities investment fund (hereinafter referred to as fund), which is managed by fund managers and entrusted to fund trustees for the benefits of the fund share holders; the matters not covered by the present Law shall be governed by the Trust Law of the People's Republic of China, the Securities Law of the People's Republic of China, and other relevant laws and administrative regulations.

Article 3 The rights and obligations of the fund managers, fund trustees and fund share holders shall be stipulated in the fund contracts in accordance with the present Law.

The fund managers and fund trustees shall perform the duties of trusteeship in accordance with the present Law and the fund contract. A holder of fund shares shall enjoy the benefits and bear the risks to the extent of the fund shares it holds.

Article 4 Those engaging in the activities involving securities investment fund shall adhere to the principles of free will, fairness and good faith, and may not impair the state and public interests.

Article 5 A fund contract shall stipulate the operation method of the fund. A fund can be operated in a closed, open, or any other way.

A fund operated in a closed way (hereinafter referred to as closed fund) refers to the fund of which the ratified total fund shares remains fixed during the valid term of the fund contract and of which the fund shares can be traded on the securities exchanges established according to law, but can not be redeemed by the fund share holders through application.

A fund operated in an open way (hereinafter referred to as open fund) refers to the fund of which the total fund shares are unfixed and of which the fund shares may be subscribed to or redeemed at the time and place stipulated in the fund contract.

The methods of offering, trading, subscription and redemption of the fund shares of other funds operated through other methods shall be separately formulated by the State Council.

Article 6 Fund property shall be independent from the property owned by the fund manager and fund trustee. The fund manager and fund trustee may not attribute any of the fund property into their own property.

The property and benefits obtained by the fund manager and fund trustee as a result of the management, utilization or any other use of the fund shall be included into the fund property.

Where the fund manager or fund trustee goes into liquidation as a result of dissolution, cancellation, or declared bankruptcy according to law, the fund property shall not be taken as their liquidation property.

Article 7 The credit rights of fund property may not be set off against the debts of the property owned by the fund manager and fund trustee; and the credit rights and debts of different fund properties may not be set off against each other.

Article 8 The debts not arising out of the fund property may not be enforced against such fund property.

Article 9 The fund manager and fund trustee shall, in managing and utilizing the fund property, devote themselves to their duties and perform the obligations of good faith, prudence and diligence.

Fund practitioners shall have obtained the qualifications for practice relating to funds, and shall abide by the laws, administrative regulations, professional ethics, and code of conduct.

Article 10 Fund managers, fund trustees and fund share offering institutions may establish trade associations to strengthen self-regulation, coordinate trade relationship, provide trade services, and promote the development of the trade.

Article 11 The securities regulatory department under the State Council shall supervise and regulate the activities concerning securities investment fund according to law.