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Articles of the Association

Chapter I      General Provisions
 
Article 1    The name of this association is Securities Association of China (“SAC”), which in Chinese shall be “中国证券业协会”.
 
Article 2    Founded under the Securities Law of the People’s Republic of China (the “Securities Law”) and the Regulation on Registration and Administration of Social Organizations,SAC is defined as a national self-regulatory organization for securities industry and as well a non-profit corporation aggregate.
 
Article 3    The objects of SAC are: to assume the role of self-regulator of the securities industry under the centralized supervision and administration of the government, subject to the Constitution, applicable laws and regulations, and the economic policies of the People’s Republic of China, as well as under the guidance of social morality and the concept of scientific development; to serve as the bridge and link between the government and the securities industry; to serve the members and safeguard their legitimate rights and interests; and to maintain the order of fair competition in the securities industry, to establish and develop an open, fair and impartial securities market, and to promote the sound and stable development of the securities market.
 
Article 4    SAC shall be under the guidance, supervision and administration of China Securities Regulatory Commission (“CSRC”), and the national registration and administration authority of social organizations—Ministry of Civil Affairs of the People’s Republic of China (“Ministry of Civil Affairs”).
 
Article 5    The domicile of SAC is in Beijing, China.
 
Chapter II     Functions and Duties
 
Article 6    SAC shall, in accordance with pertinent provisions of the Securities Law, perform the following functions and duties:
 
(1)     to educate and organize its members to act in compliance with securities laws and administrative regulations;
(2)     to lawfully safeguard the legitimate rights and interests of its members, and keep CSRC informed of the suggestions and requirements of the members;
(3)     to collect and process information on securities and render services to its members;
(4)     to formulate rules applicable to and binding on its members, organize vocational trainings for the securities business practitioners employed by its members, and promote the business communication among the members;
(5)     to mediate the disputes over securities businesses arising between its members, or between its members and their clients;
(6)     to organize its members to research into the development and operation of, and such other issues as related to the securities industry; and
(7)     to supervise and inspect the activities of its members, and in accordance with pertinent provisions, impose disciplinary sanctions on any member who is in violation of any laws, administrative regulations or these Articles of Association.
 
Article 7    SAC shall also, in accordance with the provisions of the administrative regulations and the rules and regulations of CSRC, perform the following functions and duties:
                    
(1)     to formulate practice standards and business norms for the securities industry, and assume the role of self-regulator of its members and their practitioners;
(2)     to be in charge of the qualification examinations and practice registration for the practitioners in the securities industry;
(3)     to be in charge of organizing qualification tests or competence tests for the senior management, sponsor representatives and other professionals serving in special positions of securities companies;
(4)     to be in charge of registering the inquiry subjects of initial public offerings and those private placement holders that are under its administration; and
(5)     to perform such other functions and duties as stipulated in applicable administrative regulations and the rules and regulations of CSRC.
 
Article 8    SAC shall as well perform such self-regulatory functions as required for the normative development of the securities industry:
                    
(1)     to promote the good faith in the securities industry, carry out credibility evaluation in the securities industry, and implement good-faith-oriented guidelines and incentives, as well as launch education on good faith in the industry, and urge its members to lawfully perform their disclosure obligation and supervise the same;
(2)     to organize qualification examinations for securities practitioners;
(3)     to push forward the education for investors in the industry, lead the development of educational products for investors, and popularize the securities knowledge;
(4)     to push forward the informatization construction of its members, and improve their ability in assuring their information security, and with the approval of the competent government departments, offer encourages and rewards for the science and technology innovation in the securities industry, and lead the formulation of the industrial technology standards and guidelines;
(5)     to organize and conduct international communications and cooperation in securities industries, and for and on behalf of China’s securities industry, access into international organizations, and promote the mutual recognition of relevant qualifications; and
(6)     to perform such other functions and duties as related to self-regulation, service and communication.
 
Chapter III     Members
 
Section 1    Membership
 
Article 9     SAC is only composed of organizational members.
 
Article 10   To be and being a member of SAC, one shall:
 
(1)     defend and abide by these Articles of Association;
(2)     comply with the laws and regulations, and be engaged in securities –related businesses; and
(3)     meet any other requirements of SAC.
 
Article 11    SAC should categorize and administrate its members based on the actual needs. The members of SAC shall consist of statutory members, general members and special members.
 
Article 12    Securities companies established upon the approval of CSRC shall join SAC as statutory members.
 
Article 13    Securities operation or service institutions such as securities investment and consulting institutions, financial asset management companies, financial consulting institutions, and credit rating institutions which are lawfully established and licensed by CSRC to engage in securities-related business may apply to join SAC as general members.
 
Article 14    The following institutions may apply to join SAC as special members:
                    
(1)     securities exchanges, financial futures exchanges, securities depository and clearing institutions, securities investor protection funds, and margin refinancing institutions;
(2)     law firms, accounting firms and such other intermediary institutions that are engaged in securities businesses;
(3)     securities associations in all the provinces, autonomous regions, municipalities directly under the central government, and cities with independent planning status;
(4)     representative offices of overseas securities institutions established with approval of the competent regulatory authorities; and
(5)     any other institutions which are licensed by CSRC to engage in any securities-related businesses.
 
Section 2    Rights and obligations of Members
 
Article 15    SAC’s members are entitled to the following rights:
 
(1)     to elect, to be elected and to vote, except that the rights to elect or to be elected is not to be enjoyed by the special members;  
(2)     to require SAC to defend its/their legitimate rights and interests from any infringement;
(3)     to make complaints and raise suggestions via SAC to the competent authorities;
(4)     to request a hearing for, and make statements and arguments as to any diplomacy sanctions imposed by SAC;
(5)     to participate in any activities held by SAC and receive services from SAC;
(6)     to criticize, comment on and supervise the works of SAC; and
(7)     others rights as stipulated by the resolutions approved by the General Meeting.
 
Article 16    SAC’s members shall perform the following obligations:
                    
(1)     to comply with these Articles of Association, the self-regulatory rules, industrial standards and business norms issued by SAC;
(2)     to implement SAC’s resolutions;
(3)     to uphold SAC’s reputation;
(4)     to actively participate in the activities organized by SAC and fulfill the tasks assigned by SAC;
(5)     to keep SAC informed of related information, and as required provide related materials to SAC;
(6)     to pay membership fees as stipulated;
(7)     to subject themselves to the supervision and administration of SAC, and accept the inspections and coordination of SAC; and
(8)     other obligations as stipulated by the resolutions of the General Meeting.
 
Section 3   Accession and Secession of Members
 
Article 17    Accession to SAC shall be subject to registration.
 
To apply for accessing to SAC, an applicant shall submit the following documents:
 
(1)     an application form, indicating the applicant’s name, legal domicile and so on, and stating its undertaking of defending and abiding by these Articles of Association;
(2)     the Member Registration Form filled as required by SAC;
(3)     the copies of its business operation license, corporate business license (or corporate registration certificate) or other documents which may prove its statutory qualification; and
(4)     any other documents as required by SAC.
 
Article 18   The General Office will conduct preliminary review of such documents as submitted by the applicants, and then refer the documents satisfying the requirements to the Chairman’s Office Meeting for further review, and then upon the approval thereof, register the approved applicants and issue the Member Certificate to the said applicants.
 
Article 19    Each member shall appoint one member representative to perform its duties on its behalf in SAC.
 
Such member representative shall be the legal representative or the chief executive of the member.
                                      
To change its member representative, a member shall submit a written report to SAC. Upon the approval of the Chairman’s Office Meeting, the new member representative may take over the duties of director or supervisor as being taken by the member in SAC. If the member serves as a Vice Chairman of SAC or the Chairman of the Board of Supervisors, its new member representative may not serve in the same position unless the representative is elected to do so by the Board of Directors or the Board of Supervisors.
 
Article 20    In the case a member goes into merger, separation or termination, the membership thereof in SAC shall be accordingly changed or terminated.
 
Article 21    All members other than the statutory members may voluntarily secede from SAC. To secede wherefrom, a member shall submit a written application and surrender its Member Certificate to SAC.
 
Any member other than the statutory members who fails to pay its membership fee or who participates in no activities organized by SAC for two successive years without any good cause will be deemed as having automatically seceded from SAC; and on any statutory members who is under any of the aforesaid circumstances, SAC will impose disciplinary sanctions.
 
Article 22    For any member which seriously violates these Articles of Association, SAC will, upon approval of relevant resolution by the Board of Directors, cancel the membership of the said member or impose other disciplinary sanctions thereon.
 
Chapter IV    Organization Structure, Election and Removal of Executives
 
Section 1     General Meeting
 
Article 23    The General Meeting of Members (the “General Meeting”) is the highest authority of SAC and shall be composed of all the members.
 
Article 24    The General Meeting shall perform and exercise the following functions and authorities:
 
(1)     to formulate and amend these Articles of Association;
(2)     to review the work reports and financial reports prepared by the Board of Directors;
(3)     to review the work reports prepared by the Board of Supervisors;
(4)     to elect and remove any member director or supervisor;
(5)     to fix the rate of membership fees;
(6)     to approve resolutions on the merger, separation and termination of SAC;
(7)     to decide the establishment, deregistration and renaming of the Advisory Committee; and
(8)     to decide other matters that shall be reviewed and resolved by it.
 
Article 25   The quorum of the General Meeting shall be two thirds of the members present, while a resolution to be effective requires two thirds of the attending members voting therefor.
                    
Approval of resolutions on the formulation or amendment of these Articles of Association, or on the merger, separation or termination of SAC requires two thirds of the members voting therefor.
 
Article 26   The General Meeting shall be convened at least once every four years. Interim meetings may be convened when the Board of Directors deems it necessary or more than one third of members jointly make a proposal therefor.
 
Section 2    Board of Directors
 
Article 27   The Board of Directors is the executive body of the General Meeting, and shall take charge of the daily works of SAC when the General Meeting is not in session, and shall report to the General Meeting.
 
Article 28   The Board of Directors is composed of member directors and non-member directors.
 
Article 29   The member directors shall be recommended by the members and elected by the General Meeting. Non-member directors shall be appointed by CSRC. The number of non-member directors shall not exceed one fifth of the total number of the directors.
 
The directors shall serve for a term of four years and thereafter may serve for successive terms upon re-election.
 
In case a term needs to be terminated in advance or extended under special circumstances, it shall be voted for by a majority of the members of the Board of Directors, and be subject to the review by CSRC and the approval of Ministry of Civil Affairs, and the term shall not be extended by more than one year.
 
Article 30   The Board of Directors shall perform and exercise the following functions and powers:
                    
(1)     to prepare for and convene the General Meeting, and thereto report its works and the financial status;
(2)     to implement and carry out the resolutions of the General Meeting;
(3)     to review and approve the self-regulatory rules, industrial standards and business norms;
(4)     to elect or remove the Chairman and Vice Chairmen of SAC, and appoint the Secretary-General;
(5)     to remove any defaulting director when the General Meeting is not in session;
(6)     to decide on establishment, deregistration and renaming of a Professional Committee;
(7)     to appoint the chairmen and vice chairmen of the Advisory Committee and the Professional Committees;
(8)     to propose the convening of an interim meeting of the General Meeting;
(9)     to review the annual work reports and work plans of SAC;
(10) to review the annual financial budgets and final financial accounts of SAC;
(11) to review the proposals presented by the Chairman’s Office Meeting; and
(12) to decide other major issues that shall be reviewed and decided by the Board of Directors.
 
Article 31   The Board of Directors shall at least hold one meeting every year. In special cases, the meeting may be held through communication modes.
                    
Interim meetings may be convened when the Standing Committee of the Board of Directors deems it necessary or more than one third of directors jointly make a proposal therefor.
 
Article 32   The quorum of the Board of Directors shall be two thirds of the directors present at the meeting, while a resolution to be effective requires two thirds of the attending directors voting therefor.
 
The Supervisors and the Chairman of the Board of Supervisors may attend the meetings of the Board of Directors without voting rights.
 
Section 3    Standing Committee of the Board of Directors
 
Article 33    SAC shall have a Standing Committee of the Board of Directors (the “Standing Committee”), which is composed of members elected from and by the Board of Directors.
 
The total number of Standing Committee Directors shall not exceed one third of Board of Directors.
 
Article 34    The Standing Committee shall report to the Board of Directors, and during the period when the Board of Directors is not in session, shall perform and exercise the functions and powers of the Board of Directors specified in Article 30 other than those specified in Paragraphs 1, 4, 5 and 12 thereof.
 
The Standing Committee may, based on the needs, propose to convene an interim meeting of the Board of Directors.
 
Article 35    The Standing Committee shall at least semiannually convene one meeting. In special cases, the meeting may be held through communication modes.
 
Interim meetings may be convened when the Chairman’s Office Meeting deems it necessary or more than one third of the Standing Committee Directors jointly make a proposal therefor.
 
Article 36    The quorum of the Standing Committee shall be two thirds of the Standing Committee Directors present at the meeting, while a resolution to be effective requires two thirds of the Standing Committee Directors that attend the meeting voting therefor.
 
The Chairman of the Board of Supervisors may attend the meetings of the Standing Committee without voting rights.
 
Section 4     Board of Supervisors
                                       
Article 37    SAC shall have a Board of Supervisors, consisting of all the member supervisors. The Board of Supervisors shall be the supervisory body of SAC.
 
Article 38    All the supervisors shall be recommended by the members and elected by the General Meeting. The Chairman of the Board of Supervisors shall be elected from and by the Board of Supervisors.
 
The supervisors and the Chairman of the Board of Supervisors shall serve for a term of four years and thereafter may serve for successive terms upon re-election.
 
Article 39   The Board of Supervisors shall perform and exercise the following functions and powers:
 
(1)     to supervise the implementation of these Articles of Association and the resolutions of the General Meeting, and report the same to the General Meeting;
(2)     to supervise the works of the Board of Directors;
(3)     to elect and remove the Chairman of the Board of Supervisors;
(4)     to remove any defaulting supervisor when the General Meeting is not in session;
(5)     to supervise the collection of the membership fees, the implementation of the financial budgets and final financial accounts of SAC; and
(6)     to decide other matters subject to the review of the Board of Supervisors.
 
Article 40   The Board of Supervisors shall at least hold one meeting every year. In special cases, the meeting may be held through communication modes.
 
Interim meetings may be convened when the Chairman of the Board of Supervisors deems it necessary or more than one third of Supervisors jointly make a proposal therefor.
 
Article 41    The quorum of Board of Supervisors shall be two thirds of the supervisors present at the meeting, while a resolution to be effective requires two thirds of the attending supervisors voting therefor.
 
Section 5     Chairman’s Office Meeting, Chairman and Secretary-General
 
Article 42    SAC shall have one fulltime Chairman and several fulltime Vice Chairmen and part-time Vice Chairmen. The Chairman and the fulltime Vice Chairmen shall be nominated by the CSRC, while the part-time Vice Chairmen are to be selected from the member directors and thereafter elected by the Board of the Directors.
 
The fulltime Chairman and the fulltime Vice Chairmen shall serve for a term of four years, and may not serve for more than two successive terms. In case a term needs to be extended under special circumstances, it shall be voted for by two thirds of the members of the General Meeting, and be subject to the review by CSRC and approval of Ministry of Civil Affairs.
 
The part-time Vice Chairmen shall serve for a term of four years and thereafter may serve for successive terms upon re-election, but the number of those who has served for two successive terms shall not exceed one thirds of the total number of the part-time Vice Chairmen, and those over the age of 60 shall not serve for more than two successive terms.
 
Article 43    SAC may, depending on the needs, have one Secretary-General and several Vice Secretary-Generals. The Secretary-General and the Vice Secretary-Generals shall assist the Chairman and the Vice Chairmen in handling their works.
 
The Secretary-General and the Vice Secretary-Generals shall be recommended by CSRC. The Secretary-General may not serve for more than two successive terms.
 
Article 44    SAC shall have a Chairman’s Office Meeting, which shall be composed of the Chairman, the fulltime Vice Chairmen, the Secretary-General and the Vice Secretary-Generals.
 
Article 45    The Chairman’s Office Meeting shall perform and exercise the following functions and powers:
 
(1)     to implement the resolutions of the General Meeting, the Board of Directors and the Standing Committee;
(2)     to propose an interim meeting of the Standing Committee;
(3)     to prepare the annual work plans, and financial budgets and final financial accounts of SAC, and submit the same to the Board of Directors or the Standing Committee for resolution;
(4)     to decide on major issues in SAC’s daily works;
(5)     to formulate SAC’s internal management system;
(6)     to decide on establishment of SAC’s General Office subject to the approval of the CSRC and make filing thereof with the Ministry of Civil Affairs;
(7)     to propose the removal of any director or supervisor;
(8)     to review and determine whether a member is qualified for the membership of SAC;
(9)     to nominate the chairman and vice chairmen of the Advisory Committee and all the Professional Committees, and appoint the members thereof; and
(10) to perform and exercise such other functions and powers as empowered by the General Meeting, the Board of Directors and the Standing Committee.
 
Article 46    SAC shall adopt the Chairman Responsibility System, under which the Chairman shall be the legal representative of SAC.
 
The legal representative of SAC shall not concurrently serve as the legal representative of any other association.
 
Article 47    The Chairman of the SAC shall perform and exercise the following functions and powers:
 
(1)     to convene and preside over the meetings of the Board of Directors, the Standing Committee and the Chairman’s Office Meeting;
(2)     to lead the daily works of the General Office;
(3)     to organize the implementation of SAC’s annual work plans, and financial budgets and statements;
(4)     to appoint the Vice Secretary-Generals, and propose the appointment of the Secretary-General to the Board of Directors;
(5)     to execute related material documents for and on behalf of SAC; and
(6)     to perform and exercise such other functions and authorities as empowered by the Standing Committee.
 
The Vice Chairmen shall assist the Chairman in handling his works. In case the Chairman fails to perform his duties for a good reason, the Vice Chairman appointed by the Chairman will, on the behalf of the Chairman, perform the duties.
 
Section 6     Service Qualifications
 
Article 48    To be and being a member director or a member supervisor of SAC, one shall:
                    
(1)     be representative among the members;
(2)     operate with good faith and in normative manners;
(3)     have a sense of social responsibility and industrial mission, and enjoy certain influences and appeal in the industry; and
(4)     satisfy any other requirements specified by the General Meeting.
 
Article 49    To be and being a director or a supervisor of SAC, one shall:
 
(1)     be a member representative of a member director or a member supervisor;
(2)     have rich practice experience in the fields of securities and finance;
(3)     honor and support the works of SAC;
(4)     have not received any administrative sanction from CSRC, or self-regulatory sanction from SAC within the most 3 recent years; and
(5)     satisfy any other requirements specified by the General Meeting.
 
Article 50    No one may concurrently serve as the supervisor and the director of SAC.
 
Article 51   To be and being the Chairman, Vice Chairman, or Chairman of the Board of Supervisors, or the Secretary-General, one must:
                    
(1)     uphold the Party’s course, guideline and policies, and be politically qualified;
(2)     have worked in the securities industry for more than five years, and enjoy a comparatively great influence and a good reputation in the industry;
(3)     be healthy and have full civil capacity;
(4)     honor the works of SAC;
(5)     be under the age of 70, and in the case of the Secretary-General, be fulltime; and
(6)     satisfy any other requirements specified by the General Meeting.
 
Article 52     In case a director or supervisor fails to perform his/her duties, or fails to attend the relevant meetings for two successive times without good cause, or is no more qualified for his/her position, the Chairman’s Office Meeting may make a proposal to the Board of Directors or the Board of Supervisors on the removal of such director or supervisor.
 
Section 7    Advisory Committees and Professional Committees
 
Article 53     SAC may, based on the needs of its works, establish any Advisory Committee or Professional Committee. To establish an Advisory Committee or Professional Committee, SAC shall obtain the approval of the CSRC, and thereupon apply for registering the same to the Ministry of Civil Affair.
 
Article 54    The Advisory Committees and the Professional Committees are internal parts of SAC, and therefore enjoy no status of a legal person, but may only in line with the purposes and business cope specified herein, act within its limits of authority as empowered by SAC.
 
Article 55    The Advisory Committees shall be composed of professionals who have comparatively great influence, good reputation and rich experience, and have been engaged in securities businesses, securities research or securities supervision and administration for a relatively long time.
 
The Professional Committees shall be composed of professionals from appropriate areas of expertise.
 
Chapter V     Finance and Assets Management
 
Article 56    The sources of funds of SAC shall be:
                    
(1)     membership fees;
(2)     government funding and social donations;
(3)     revenue gained by performing activities or providing services within the approved business scope;
(4)     interest income; and
(5)     other legitimate revenue.
 
Article 57    The funds of SAC must be used within its business scope and for the development of its businesses prescribed herein, and shall never be distributed among its members.
 
Article 58     SAC establishes a strict finance management system to assure the legitimacy, authenticity, accuracy and integrity of the accounting documents.
 
Article 59     SAC has its own qualified professional accountants, and such accountants shall not concurrently serve as the cashiers in SAC. These accountants shall lawfully conduct accounting and accounting supervision. Before leaving his/her position, an accountant shall hand over the works to his/her successor.
 
Article 60     SAC shall manage its assets in line with the finance management systems formulated by the State, and under the supervision of the General Meeting, Board of Supervisors and competent authorities of the State. Any assets sourced from government allocation, social donations or funding must be subject to the supervision of the auditing authorities, and the related information shall be disclosed in proper manners.
 
Article 61     SAC’s finance shall be audited by CSRC or the Ministry of Civil Affairs prior to the shift of its office terms or the change of its legal representative.
 
Article 62      No organization or individual may ever encroach, allocate or misappropriate any asset of SAC.
 
Article 63     The wages, insurance and benefits for fulltime workers of SAC shall be determined in accordance with applicable regulations of the State.
 
Article 64     The General Office shall report its revenues and expenditures to the Board of Directors, the Board of Supervisors and the General Meeting.
 
Chapter VI    Procedures for Amending these Articles of Association
 
Article 65     No amendments may be made to these Articles of Association unless it is adopted by the Board of Directors, passes the preliminary reviews by CSRC and the Ministry of Civil Affairs, and is thereafter approved by the General Meeting.
 
Article 66     The Articles of Association so amended by SAC shall, within fifteen (15) working days after it is approved by the General Meeting, be submitted to CSRC for review, and upon the approval thereof, be referred to Ministry of Civil Affairs for further review and ratification.
 
Chapter VII   Procedures for Termination of SAC and Properties Disposal thereafter
 
Article 67     If SAC should be deregistered for such causes as the fulfillment of its objects, voluntary dissolution or the separation or merger of SAC, the Board of Directors or the Standing Committee shall make a motion for SAC’s termination.
 
Article 68     The motion for terminating SAC shall be voted and approved by the General Meeting and submitted to CSRC for review and ratification.
 
Article 69     Before the aforesaid termination, a liquidation group shall be formed under the guidance of CSRC to settle SAC’s debts and creditor’s rights, and to deal with other matters arising from the termination. During such liquidation period, no activities other than the liquation activities may be performed.
 
Article 70     SAC shall be terminated forthwith upon SAC’s deregistration with Ministry of Civil Affairs.
 
Article 71     Any assets of SAC remaining after its termination shall, under the supervision of CSRC and Ministry of Civil Affairs, be used for businesses related to SAC’s objects in accordance with the pertinent provisions of the State.
 
Chapter VIII  Supplementary Provisions
 
Article 72    These Articles of Association are approved by the General Meeting on 24 June 2011.
 
Article 73    The power of interpreting these Articles of Association shall be vested in SAC’s Board of Directors.
 
Article 74    These Articles of Association shall become effective on the date it is approved by Ministry of Civil Affairs.




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