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Chapter I General Rules Article 1 For the purpose of strengthening the supervision and management of trust companies, regulating the business operations of trust companies and promoting the sound development of trust industry, these Measures are formulated in accordance with the Trust Law of the People¡¯s Republic of China, the Banking Supervision Law of the People¡¯s Republic of China and other laws and regulations. Article 2 The term ¡°trust company¡± as mentioned in these Measures refers to the financial institutions which are established in accordance with the Company Law of the People¡¯s Republic of China and these Measures and mainly operate the trust business. The term ¡°trust business¡± as mentioned in these Measures refers to the trust companies¡¯ business operations of making commitments to trust and handling trust affairs under fiduciary capacity for the purpose of running business and collecting remunerations. Article 3 The trust property of a trust company shall not be a part of the inherent property of the trust company, or a part of the trust company¡¯s liabilities for the beneficiaries. Where a trust company is terminated, the trust property shall not be a part of its property to be liquidated. Article 4 When engaging in trust activities, a trust company shall observe laws and regulations and the stipulations of trust documents, may not damage national interests, public interests or the legitimate rights and interests of the beneficiaries. Article 5 China Banking Regulatory Commission shall be responsible for supervising and managing trust companies and their business activities. Chapter II Establishment, Change and Termination of Trust Institutions Article 6 A trust company shall be established in the form of a limited liability company or a company limited by shares. Article 7 The establishment of a trust company shall be subject to the approval of China Banking Regulatory Commission and for which a financial license shall be obtained. Without obtaining the approval of China Banking Regulatory Commission, no entity or individual may operate any trust business and no business entity may use the term ¡°trust company¡± in its corporate name, except it is stipulated otherwise by any law or regulation. Article 8 To establish a trust company, the following conditions shall be satisfied: (1) having the articles of association that conform to the provisions of the Company Law of the People¡¯s Republic of China and those of China Banking Regulatory Commission; (2) having shareholders qualified for purchasing shares as prescribed by China Banking Regulatory Commission; (3) having the minimum registered capital as prescribed by these Measures; (4) having directors, senior mangers and trust employees who are suitable for its business and have corresponding post-holding qualifications as stipulated by China Banking Regulatory Commission; (5) having a sound institutional framework, trust business operating instructions and a risk control system; (6) having a business place, safety measures and other facilities as required for its business; (7) other conditions stipulated by China Banking Regulatory Commission. Article 9 China Banking Regulatory Commission shall, in accordance with the relevant laws and regulations and the principle of prudent supervision, examine an application for establishing trust company and make a decision on whether to approve it or not; where it decides to disapprove the application, it shall give reasons. Article 10 The minimum registered capital of a trust company shall be 300 million yuan or the equivalent convertible currency, and the registered capital shall be paid-in monetary capital. When applying for operating such businesses as enterprise annuity fund, securities underwriting and asset securitization, etc, the requirements on minimum registered capital stipulated by the relevant laws and regulations shall be satisfied. China Banking Regulatory Commission may adjust the minimum amount of registered capital of trust companies in light of the needs of development of trust company industry. Article 11 Without obtaining the approval of China Banking Regulatory Commission, no trust company may establish any branch institution either directly or in any disguised form. Article 12 Where a trust company is under any of the following circumstances, it shall obtain the approval of China Banking Regulatory Commission: (1) changing its name; (2) changing its registered capital; (3) changing its domicile; (4) changing the form of organization; (5) adjusting its business scope; (6) changing any director or senior manager; (7) changing any shareholder or adjusting equity structure, except that the circulated shares of a listed company it holds are less than 5% of the total shares of the company; (8) amending its articles of association; (9) merger or division; (10) other circumstances prescribed by China Banking Regulatory Commission. Article 13 Where a trust company applies for dissolution because of division, merger or any other cause for dissolution as prescribed in the articles of association, it shall, after the application is approved by China Banking Regulatory Commission, dissolve and organize liquidating group to conduct liquidation according to law. Article 14 Where a trust company can not pay off its due debts and its assets are not enough to cover the debts or it obviously lacks repayment ability, upon the consent of China Banking Regulatory Commission, it may apply to the people¡¯s court for bankruptcy. As for such a trust company, China Banking Regulatory Commission may directly submit an application for reforming or conducting bankruptcy liquidation to the people¡¯s court. Article 15 When a trust company is terminated, its duties concerned in the management of trust affairs shall be terminated simultaneously. The liquidating group shall properly keep the trust property, prepare a report on handling trust affairs and hand over trust property to the new assignee. Where there is any other stipulation in the trust document, such stipulation shall prevail. Chapter III Business Scope Article 16 A trust company may apply for operating some or all of the following domestic or foreign currency businesses: (1) capital trust; (2) trust of movable property; (3) real estate trust; (4) trust of negotiable instruments; (5) trust of any other property or property rights; (6) engaging in investment fund business as a promoter of a investment fund or fund management company; (7) operating such businesses as the reorganization, purchase and merger of enterprise assets, fund-raising, corporation finance and financial consultation, etc; (8) operating the securities underwriting businesses approved by the relevant departments under the State Council upon commission; (9) handling such businesses as brokerage, consultation and credit investigation, etc; (10) providing commissioned safe-keeping services and operating the business of safety-deposit boxes; (11) other businesses stipulated in any law or regulation or approved by China Banking Regulatory Commission. Article 17 A trust company may conduct charitable trust activities in accordance with the provisions of the Trust Law of the People¡¯s Republic of China and the relevant laws and regulations. Article 18 A trust company may, in light of market demand, set up different varieties of trust business according to different trust purposes, different varieties of trust property and different management styles of trust property. Article 19 A trust company may manage, operate or dispose its trust property by way of investment, sales, inter-bank deposits, purchasing for reselling, lease or loans, etc, as agreed to in the trust documents. Where it is stipulated otherwise by China Banking Regulatory Commission, the relevant provision shall prevail. No trust company may manage or operate trust property by way of selling out for repurchasing. Article 20 A trust company may conduct such businesses as inter-bank deposits, inter-bank offers, loans, lease and investment under the item of inherent business. The investment business shall be limited to equity investment in financial companies, investment in financial products and investment in self-use inherent assets. No trust company may make industrial investment with its inherent property, except it is stipulated otherwise by China Banking Regulatory Commission. Article 21 A trust company may not conduct the liability businesses other than the business of inter-bank loans and the balance of its inter-bank loans may not exceed 20% of its net assets, except it is stipulated otherwise by China Banking Regulatory Commission. Article 22 A trust company may provide guarantee for outsiders, but the guarantee balance may not exceed 50% of its net assets. Article 23 When operating foreign exchange trust business, a trust company shall observe the relevant provisions of the state on foreign exchange control and subject itself to the examination and supervision of the competent department of foreign exchange. Chapter IV Operating Rules Article 24 When managing, operating or disposing its trust property, a trust company shall scrupulously perform its duties, fulfill its obligations of honesty, good faith, prudence and effective management and safeguard the best interests of the beneficiaries. Article 25 When handling trust affairs, a trust company shall avoid the conflict of interests. When it is impossible to avoid such conflict, it shall sufficiently disclose the relevant information to the trustors and the beneficiaries or refuse to engage in such business. Article 26 A trust company shall handle trust affairs by itself. Where it is stipulated otherwise in any trust document or it has any reason of necessity, it may entrust others to handle trust affairs for it, but the trust company shall sufficiently fulfill the obligation of supervision and be responsible for the acts conducted by the party entrusted for handling trust affairs. Article 27 A trust company has the obligation of keeping secret the information on its trustors and beneficiaries and the relevant situation on its handling of trust affairs according to law, except it is stipulated otherwise in any law or regulation or trust document. Article 28 A trust company shall properly keep a complete record on its handling of trust affairs and report the situation on trust property and its management, operation, disposal and revenue and expenditure to its trustors and beneficiaries on a regular basis. A trustor or beneficiary is entitled to being informed of the situation on the management, operation, disposal and revenue and expenditure of his/her/its trust property by the trust company and asking the trust company to make relevant explanations. Article 29 A trust company shall manage its trust property and inherent property separately and keep accounts separately, and shall also manage the trust property of different trustors separately and keep accounts separately. Article 30 A trust company shall establish accounts according to law, make business accounting for the trust business and non-trust business respectively and make business accounting for each trust business separately. Article 31 The trust business department of a trust company shall be independent from other departments of the company, the personnel of this department may not concurrently hold any post in any other department of the company, and the business information of this department may not be shared with other departments of this company. Article 32 Where a trust is established in the form of trust contract, the trust contract shall indicate the following items: (1) Purpose of the trust; (2) name or title and domicile of the trustor and the trustee; (3) beneficiaries or scope of beneficiaries; (4) scope, variety and status of trust property; (5) rights and obligations of the parties to the trust; (6) disclosure and undertaking of the risks involved in the management of trust property; (7) management style of trust property and management right of the trustee; (8) calculation of trust interests, the form and method for delivering trust interests to the beneficiaries; (9) calculation and payment of the trust company¡¯s remunerations; (10) undertaking of the expenses of taxation on trust property and the calculation of other expenses; (11) period and termination of the trust; (12) ownership of trust property at the time when the trust is terminated; (13) reporting of trust affairs; (14) liabilities for breach of contract of the parties to the trust and the method for dispute settlement; (15) method for selecting new trustee; (16) other items necessary to be indicated as deemed by the parties to the trust. Where a trust is established in the form of any written document other than trust contracts, the items to be indicated in the written document shall be in line with the relevant laws and regulations. Article 33 No trust company may commit any of the following behaviors when conducting inherent business: (1) contributing funds or transferring property to any of its affiliated parties; (2) providing guarantee for any of its affiliated parties; (3) raising funds by pledging the equity held by any shareholder in this company. The affiliated parties of a trust company shall be defined in accordance with the Company Law of the People¡¯s Republic of China and the relevant enterprise accounting standards. Article 34 No trust company may commit any of the following behaviors when conducting trust business: (1) seeking unjust interests by taking advantage of its status as fiduciary; (2) misappropriating its trust property for any non-trust purpose; (3) promising that the trust property would suffer no loss or guaranteeing a minimum return; (4) providing guarantee with trust property; (5) other behaviors prohibited by any law or regulation or China Banking Regulatory Commission. Article 35 A trust company shall conduct affiliated transactions on the basis of fair market price, report each transaction to China Banking Regulatory Commission in advance and disclose the relevant information in accordance with the relevant provisions. Article 36 When operating any trust business, a trust company shall collect remunerations in the form of commission charge or brokerage expense as agreed to in the trust documents, except it is stipulated otherwise by China Banking Regulatory Commission. A trust company shall notify the beneficiaries the fact that it collects remunerations and shall explain the specific charging rates to the beneficiaries. Article 37 Where a trust company disposes its trust property by going against the original trust purpose, or incurs any loss to the trust property because of its violation of management duties or inappropriate disposal of the trust affairs, it may not ask for paying remunerations before it recovers the original status of the trust property or makes corresponding compensation. Article 38 The expenses spent and the liabilities assumed by a trust company for its handling of trust affairs shall be born by the trust company with the trust property. They shall be listed in the trust contract or expressly informed to the beneficiary. Where a trust company makes advance payment with its inherent property, it shall enjoy the priority of being compensated with the trust property. The liabilities assumed and damages suffered by the trust company from its violation of management duties or inappropriate management of trust affairs shall be born by the trust company with its inherent property. Article 39 Where a trust company disposes of its trust property by violating the trust purpose, or where it has gross negligence in managing, operating or disposing of its trust property, the trustor or beneficiary is entitled to dismiss the trust company in accordance with the stipulations of the trust document or applies the people¡¯s court to dismiss the trust company. Article 40 Where the trustee is terminated according to law, a new trustee shall be selected in accordance with the stipulations of the trust document; where it is not stipulated in the trust document, the trustor may make a choice at its own will; where the trustor is unable to make a choice, the beneficiary shall do it; where the beneficiary is a person of no capacity for civil conduct or a person with qualified civil capacity, his/her guardian may make a choice according to law. Before a new trustee is selected, China Banking Regulatory Commission may appoint a temporary trustee. Article 41 When conducting trust business, a trust company shall terminate a trust in case it encounters any of the following circumstances: (1) the occurrence of a cause for termination as stipulated in the trust document; (2) the continual existence of the trust goes against the trust purpose; (3) the trust purpose has been realized or can¡¯t be realized; (4) the parties to the trust agree to do so after negotiations; (5) the trust period has expired; (6) the trust has been rescinded; (7) the trust has been canceled; (8) all the beneficiaries of the trust have given up the beneficiary right. Article 42 Where a trust is terminated, the trust company shall prepare a liquidation report on handling trust affairs in accordance with the stipulations of the trust document. Where the beneficiary of the trust or the person entitled to owning the trust property presents no objection to the liquidation report, the trust company may be absolved from the items listed in the liquidation report, except that the trust company has committed any misconduct. |
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