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In order to further regulate the investment operation of the monetary market funds and promote the sound development of the monetary market funds and according to such laws and regulations as the Law on Securities Investment Funds, the Measures for the Administration of Operation of Securities Investment Funds and the Interim Provisions on the Administration of the Monetary Market Funds, we hereby notify the relevant issues concerning the investment of the monetary market funds in bank deposit as follows: 1. The monetary market funds may be invested in cash, call deposit and deposit with a term of no more than 1 year (including 1 year). 2. A bank where any monetary market fund is deposited shall be a commercial bank with the qualification for a custodian of securities investment funds, the qualification for proxy sale of securities investment funds or the qualification for a custodian of qualified overseas institutions. 3. The proportion of the monetary market funds as invested in term deposit shall not be more than 30% the net value of fund assets. 4. Where any monetary market fund is invested in bank deposit, a comprehensive cooperation agreement shall be concluded with the parent bank of the deposit bank or an authorized branch thereof and the fund shall be deposited into a branch or sub-branch as designated by the parent bank of the deposit bank or the authorized bank. 5. Where any monetary market fund is invested in bank deposit, a specific deposit agreement shall be concluded with the deposit bank so as to clarify such detailed rules as the class, term, interest rate, amount, account number, check way, means of payment and withdrawal, account management. In order to prevent the liquidity risk under any special circumstance, an article on advanced expenditure and withdrawal shall be stipulated in the agreement on term deposit. 6. A fund manager or fund custodian shall establish a check mechanism with the relevant deposit bank on a periodic basis so as to guarantee the authenticity and accuracy of the account and verification in the investment operation of the monetary market funds in bank deposits. 7. A fund manager or fund custodian shall, according to the present Circular and the relevant provisions, conclude a written agreement on the investment operation of the monetary market funds in bank deposits to clarify the rights, obligations and functions and duties of both parties concerned in such procedures as the conclusion of the relevant agreements, open-up and management of accounts, delivery and implementation of investment instructions, allocation of funds, verification of accounts, due redemption, document storage as well as the establishment, delivery, storage of deposit confirmation documents so as to guarantee the safety of fund assets and protect the legitimate rights and interests of the holders of fund shares. 8. A fund manager shall intensify the assessment and research of a bank where any monetary market fund is deposited, establish and improve the systems of operating procedures, post functions, measures for risk control, supervision and verification of bank deposits so as to effectively prevent the relevant risks. 9. A fund custodian shall intensify the supervision and verification of the investment operation of the monetary market funds in bank deposits, strictly carry out the examination and review of the relevant agreements, account materials, investment instructions, deposit confirmation documents so as to effectively perform the functions and duties of a custodian. 10. A fund manager or fund custodian shall, when carrying out the investment operation of the monetary market funds in bank deposits, strictly observe the relevant laws and regulations such as the Securities Investment Fund Law, the Measures for the Administration of Operation of Securities Investment Funds and the Interim Provisions on the Administration of the Monetary Market Funds as well as all kinds of provisions of the state on account management, interest administration and payment settlement. 11. The present Circular shall come into force as of the day of promulgation. |
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