Securities Depository and Clearing Institution

Article 7 The establishment and dissolution of the CSDCC shall be approved by the CSRC.

Article 8 The main services of the CSDCC are:

1. The establishment and maintenance of securities accounts and clearing accounts;
2. Securities depository and transfer;
3. Registration of securities holders and their entitlement;
4. Clearing and settlement of securities transactions as well as relevant management;
5. Investment income distribution on behalf of securities issuers;
6. Inquiry, information, consultation and training services in relation to securities depository and clearing services;
7. Other services permitted by the CSRC.

Article 9 The CSDCC shall not engage in the following conduct:

1. Investments irrelevant to the securities depositary and clearing service;
2. Investment in real estate for commercial or speculative purposes;
3. Securities trading beyond the scope prescribed in Article 65 and Article 66 of the Rules;
4. Conduct prohibited by laws, regulations and the CSRC.

Article 10 CSDCC shall report to the CSRC for approval on the following matters:

1. The formulation of or amendment to the articles of association or the operating rules;
2. Significant international cooperation and exchange activities as well as those involving Hong Kong Macao and Taiwan affairs;
3. Thedetermination or adjustment of major charging items and rate schedule in relation to the securities depository and clearing service;
4. The appointment or dismissal of the chairman of the board, the vice chairman, the general manager or the deputy general manager;
5. Other issues which shall be approved by the CSRC under applicable laws and regulations.

The operating rules stated in (1) refer to the CSDCC's operating procedures for the securities depository and clearing service, including securities account management, securities registration, depository, custody and clearing, as well as clearing participant administration.

Article 11 The CSDCC shall file the following issues and documents with the CSRC:

1. The operational procedures;
2. The formulation of or amendment to the management system, recovery plan and contingency proc-edures for the securities depository and clearing service;
3. Provision of depository and clearing service for a new type of securities and the changes in the depository and clearing process;
4. The admission or revocation of clearing participantship or status of clearing banks;
5. Substantial business and technical risks, serious breach of laws and regulations or major lawsuits;
6. The appointment or dismissal of general managers of the CSDCC branches, the CSDCC's assistance general managers or divisional supervisors;
7. The annual working report on business operations and the CSDCC's compliance with relevant regu-lations;
8. The CSDCC's audited annual financial reports, financial budget and material expenditure; auditor appointment and replacement;
9. Major cooperative agreements with the Stock Exchange and the forms for service agreements with securities issuers, clearing participants and clearing banks;
10. Other issues and documents which shall be filed with the CSRC under applicable laws and regulations.

Article 12 The CSDCC shall keep properly the original records and relevant materials of securities registration, depository and clearing services for at least 20 years.

Article 13 The CSDCC retains the patent on data and information it compiles in relation to the securities depository and clearing service, which shall not be commercially exploited without approval from the CSDCC.

Article 14 The CSDSS and its staff are obligated to preserve the confidentiality of the data and information in relation to the securities depository and clearing service.

The CSDCC does not provide inquiry service for data and information in relation to the securities depository and clearing service, except in the following circumstances, where:

1. The securities holder inquires about his securities information;
2. The securities issuer inquires about the shareholder register and relevant information;
3. The stock exchange asks for relevant data and materials in accordance with applicable laws and regulations;
4. The people's court, the procuratorate, the police or the CSRC conduct investigation and evidence collectionunder statutory conditions and procedures.

The CSDCC shall cater convenient account inquiry service for securities holders.

Article 15 The CSDCC shall make available for the public its operating rules, major charging items and the rate schedule in relation to the securities depository and clearing service.

The CSDCC shall consult with relevant market participants on the formulation or revision of the operating rules as well as the adjustment to major charging items and the rate schedule in relation to the securities depository and clearing service.

Article 16 The CSDCC's staff shall act with dedication, diligence and compliance with laws and regulation, and shall not take undue advantages of his position for personal benefits or leak confidential information.