Chapter 1: General Provisions

Article 1     These Guiding Opinions are formulated in accordance with the Law of the People's Republic of China on Securities Investment Funds (hereinafter referred to as the "Funds Law"), the Measures for the Administration of Securities Investment Fund Management Companies (Decree No. 22 of the China Securities Regulatory Commission), and other laws and regulations in order to further improve the fair trading system of securities investment fund management companies, ensure that different investment portfolios managed by the same company are equally treated, and protect the legitimate rights and interests of investors.

 Article 2     A company shall strictly comply with the relevant provisions on fair trading as stipulated in laws and regulations, and treat all investment portfolios fairly in the course of investment management activities. Any company is strictly prohibited from engaging in the illegal transfer of interests between different investment portfolios either directly or through arrangements of transactions involving a third party.

For the purposes of these Guiding Opinions, "investment portfolios" shall include closed-end funds, open-end funds, social security portfolios, enterprise annuities, and asset management portfolios for specific customers, etc.

 Article 3     For the purposes of these Guiding Opinions, "fair trading system of a company" shall at least regulate domestically listed shares, subscription of bonds in the primary market, transactions in secondary market, and other investment management activities, and shall meanwhile cover all processes related to investment management activities such as authorization, research and analysis, investment decision-making, transaction execution, performance evaluation, etc.

 Article 4     A company shall rationally set up the organizational structures between various types of asset management business as well as within various types of asset management businesses. While ensuring the relative independence in the investment decision-making on all investment portfolios, the company shall ensure that all investment portfolios enjoy fair opportunity in accessing investment information and investment proposals and making investment decision.

 Article 5     A company shall set up an investment decision-making system in a scientific manner, strengthen internal control over the process of transaction execution, and ensure the adherence to the fair trading principle through the implementation of the relevant working systems, work flow, and technical means. At the same time, the company shall tighten the supervision over the fair trading processes and results by means of monitoring, analyzing and evaluating, and disclosing information of the investment transactions.

Chapter 2: Internal Control of Investment Decision-making

 Article 6     A company shall continue to improve the research methods and the investment decision-making process, improve the scientificity and objectivity of investment decision-making, ensure that all investment portfolios enjoy fair opportunity in investment decision-making, and establish a fair trading system.

 Article 7     A company shall set up objective research methods. Any investment analysis and proposal shall be supported with sufficient facts and data, and subjective assumptions shall be avoided. The use of insider information as the investment basis is strictly prohibited.

 Article 8     A company shall, according to the aforesaid research methods, establish a database of candidate investment targets and a database of potential counterparties, which can be used by the whole company, and formulate clear procedures for the establishment and maintenance of the said databases.

 Article 9     A company shall, based on the databases specified in Article 8 hereof, establish candidate investment target databases and potential counterparty databases for different investment portfolios according to their respective investment targets, investment styles, investment scopes, and restrictions on associated transactions, etc. Investment portfolio managers shall, on the basis of the said databases, construct specific investment portfolios according to the investment authorization.

 Article 10     A company shall establish a sound investment authorization system, clearly define the division of duties and authorities of all investment decision-making subjects, such as investment decision-making committee, chief investment officer, investment portfolio manager, etc., and reasonably determine the investment authority limit of each investment portfolio manager. Management organizations and personnel such as the investment decision-making committee and chief investment officers shall not interfere with the investment activities carried out by investment portfolio managers within their scope of authorization. Investment portfolio managers shall make investment decision at their own discretion within the scope of authorization. Any operation that exceeds their respective investment authority limits shall be subject to strict examination and approval procedures.

 Article 11     A company shall establish the management and confidentiality systems for investment information pertaining to the investment portfolios. Different portfolio managers shall keep their major non-disclosed investment information, such as position holding and trading, from other managers.

 Article 12     A company shall establish systematic trading approaches, namely, that the investment portfolio manager shall formulate objective and complete rules for transaction decision-making in light of the investment style and investment strategies of the investment portfolios, and make transaction decision according to these rules, so as to ensure the objectivity and independence in the transaction decision-making for all investment portfolios.

Chapter 3: Internal Control over Transaction Execution

 Article 13     A company shall divide the investment management function and transaction execution function, implement centralized transaction system, and establish and improve fair trading and allocation systems, ensuring that the investment portfolios enjoy fair opportunity in transaction execution.

 Article 14     With respect to public bidding transactions held at stock exchanges, a company shall follow the fair trading procedures in the trading system. With respect to transaction orders that cannot be handled according to the fair trading procedures due to special reasons, the company shall establish corresponding control system and work flows.

 Article 15     A company shall improve the transaction allocation system for non-centralized bidding transactions, such as transactions in the inter-bank market, and large transactions at stock exchanges, to ensure that every investment portfolio has fair trading opportunity. With respect to some bond subscription in the primary market, subscription of shares not publicly issued and other trading conducted in the name of the company, the investment portfolio managers shall independently determine the transaction prices and quantity for the investment portfolios prior to trading. The company shall allocate the trading results according to the principles of price priority and proportionate allocation. If the allocation cannot be carried out according to the aforesaid principles due to special reasons, the company shall set up corresponding control system and work flow.

Chapter 4: Monitoring, Analysis and Evaluation of Conducts

 Article 16     A company shall intensify supervision and audit of the investment transactions, establish an efficient system for day-to-day monitoring of abnormal transactions, as well as an analysis and assessment system, and establish the relevant record system, so as to ensure fair trading inspection.

 Article 17     A company shall carry out review and monitoring of the subscription plan and allocation process for the subscription of shares issued through non-public offering and bond subscription in the primary market in the company's name, to ensure that the allocation results comply with the principles of fair trading.

 Article 18    A company shall review the fairness of prices of negotiated transactions conducted between investment portfolios and their counterparties based on the third party information publicly recognized in the market.

The relevant investment portfolio managers shall give reasonable explanation on the abnormal transaction prices.

 Article 19     A company shall monitor the transaction timing and spread trading prices for the same-day and same-way transactions and offsetting transactions of different investment portfolios, in particular, of the different investment portfolios under management of the same manger, and meanwhile, analyze the transaction timing and spread trading prices for same-way transactions and offsetting transactions of different investment portfolios approaching the trading day. The relevant investment portfolio managers shall give reasonable explanation on the abnormal transactions.

 Article 20     A company shall strictly control the same-day offsetting transactions between different investment portfolios, and strictly prohibit the same-day offsetting transactions which may lead to unfair trading and illegal transfer of benefits. With respect to the same-day offsetting transactions that have occurred due to the investment strategy of the investment portfolios or liquidity needs, the company shall require the relevant investment portfolio managers to provide relevant decision-making basis, and preserve records thereof for future reference, except for the portfolios that carry out investment completely according to the composition proportions of the relevant indexes.

 Article 21     A company shall monitor other abnormal transactions that may lead to unfair trading and illegal transfer of benefits, and analyze the purchasing and selling of securities involved in abnormal transactions during the time period before or after the occurrence of such abnormal transactions. The relevant investment portfolio managers shall give reasonable explanation on the abnormal transactions.

Chapter 5: Reporting, Information Disclosure and External Supervision

 Article 22     Where the relevant department of a company discovers any conduct suspected of violating the principles of fair trading, it shall report the finding to the company's management promptly and adopt the relevant control and improvement measures.

 Article 23     A company shall analyze the overall yield spread for different investment portfolios managed by the company and the yield spread for different investment categories (securities and bonds) in each quarter and each year, and the spread trading prices for the same-way transactions of different investment portfolios managed by the company in four quarters in a row and within different window of time (such as within a day, within three days, and within five days). The analysis reports shall be appropriately preserved for future reference after the investment portfolio managers, the director of supervision and the general manager have affixed their signatures thereon.

If any abnormal situation occurs to the spread trading prices for same-way transactions of all the investment portfolios managed by the company during the aforesaid analysis, the company shall recheck its internal control of the decision-making and transaction execution processes, improve the fair trading system in view of the potential problems, and make specific statements thereof in its quarterly report and annual report on supervision and audit submitted to the China Securities Regulatory Commission.

 Article 24     In the periodic reports for each investment portfolio, a company shall at least disclose the following matters: the overall implementation of fair trading system in the company and specific statement for abnormal transactions. Within the reporting period, where the unilateral trading volume, which has less transactions, for same-day offsetting transactions under open auction carried out at the stock exchange for all investment portfolios involved, has exceeded 5% of the current day transaction volume for such securities, the frequency of such type of transactions as well as the reasons thereof shall be indicated.

In the annual report for investment portfolios, the company shall also disclose the fair trading system and the control approaches, and meanwhile, provide a thematic analysis on the spread trading prices for same-way transactions for the year in the implementation of the overall fair trading system in the company.

 Article 25     The accounting firm shall make an evaluation of the degree of completeness and implementation status of the fair trading system in the company in the annual report on the evaluation of internal control of the company.

When conducting fund evaluation, a fund evaluation agency shall include the degree of completeness and implementation status of fair trading system, as well as information disclosure in the evaluation.

 Article 26     The degree of completeness in the fair trading system of a company is an important indicator of the level of integrity and degree of compliance with the specifications in the company. The regulatory department takes this as an important basis for day-to-day supervision and in granting administrative license.

The regulatory department shall carry out inspection and analysis of the implementation of fair trading system of a company by means of on-site inspection and off-site supervision, and monitor abnormal transactions of the company jointly with the stock exchange. The regulatory department shall take relevant regulatory measures on conducts involving unfair trading and illegal transfer of benefits discovered.

Chapter 6: Supplementary Provisions

Article 27     Where the investment portfolios managed by a company get involved in derivative investment, foreign investment, etc., the company shall formulate a corresponding fair trading system by referring to these Guiding Opinions.

 Article 28    These Guiding Opinions shall take effect as of the date of promulgation. The Guiding Opinions on Fair Trading System for Securities Investment Fund Management Companies (Announcement [2008] No. 9 of the China Securities Regulatory Commission) promulgated on March 20, 2008 shall be repealed simultaneously.