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Article 1 For the purpose of promoting the development of securities investment funds (hereinafter referred to as funds), regulating the capital raising, operation and related activities of money market funds and protecting the legitimate rights and interests of investors and parties concerned, Provisional Regulations on Administration of Money Market Funds (the Regulations) are formulated in accordance with the relevant provisions of the Law of Securities Investment Funds, the Administrative Measures for the Operation of Securities Investment Funds and the Provisions for the Administration of the Entry of Fund Management Companies into Inter-Bank Markets.
Article 2 Funds of money market as mentioned herein shall refer to the funds only invested into money market instruments.
Funds with similar wordings as “currency”, “cash”, “flow”, “ready funds” and “short-term bonds” in the name of such funds shall comply with the relevant requirements stipulated by the Regulations.
Article 3 Funds of money market shall be invested into the financial instruments as follows:
1. cash;
2. time deposit with a period of no more than one year (the figure inclusive) and certificate of deposit;
3. bonds with a residual term of no more than three hundred and ninety-seven days (the figure inclusive);
4. the repurchase of bonds with a term of no more than one year (the figure inclusive);
5. Central Bank bills with a term of no more than one year (the figure inclusive); and
6. other money market instruments with good liquidity as recognized by the China Securities Regulatory Commission (CSRC) and the People's Bank of China (PBC).
Article 4 No funds of money market shall be invested into the financial instruments as follows:
1. stock;
2. convertible bonds;
3. bonds with a residual term of more than three hundred and ninety-seven days;
4. corporate bonds with a credit rating under AAA; and
5. Other financial instruments, into which funds of money market are forbidden to be invested by the CSRC and the PBC.
Article 5 The portfolio of money market funds shall conform to the following provisions:
1. The proportion of the money market funds invested into short-term corporate bonds issued by the same company shall not exceed ten percent of the net asset value (NAV) of the funds;
2. The deposit in the same commercial bank entitled to fund custody shall not exceed thirty percent of the NAV of the funds; The deposit in the same commercial bank not qualified for fund custody shall not be more than five percent of the NAV of the funds;
3. The balance of the funds for positive repurchase at inter-bank bond markets throughout the country shall not exceed forty percent of the NAV of the funds; and
4. other restrictions made by the CSRC and the PBC to the proportion of the money market funds.
Article 6 The average residual term for the portfolio of money market funds shall not last for more than one hundred and eighty days.
Article 7 Other than circumstances as stated below, the residual term for bonds in the portfolio shall mean a period of residual days counting from the calculation date to the maturity.
1. For variable rate or floating rate bonds having market interest as their benchmark interest rate, the residual term of the bonds with the frequency of adjustment to interest rate of less than one year shall mean a period of residual days counting from the calculation date to the next date of adjustment to interest rate;
2. The residual term of the repurchase agreement shall mean a period of residual days from the calculation date to the date of the underlying bond transaction as stipulated in such agreement;
3. Other circumstances as prescribed by the CSRC.
Article 8 The average residual term of the fund portfolio shall be disclosed in the portfolio report section under annual reports, semi-annual reports and quarterly reports for the money market funds.
Article 9 With regard to money market funds quoted by their par value on a daily basis, dividend reinvestment may be specified as the means of revenue distribution in a fund contract and the revenue shall be distributed every day.
Article 10 As to money market funds for which fees of acquisition and redemption are not required to be collected, a fee in a certain sum may be charged from fund assets at a rate of no more than two point five per thousand for the special use of selling such funds and providing service to holders thereof. The annual report of the funds shall have the expenditure of such fee specially explained therein.
Article 11 A fund management company shall state in its prospectus of money market funds and materials of propaganda and recommendation that the purchase of money market funds by investors shall not mean the deposit of such funds as cash on money in banks or similar deposit-taking financial institutions. Fund management companies shall ensure neither the certain profits nor the floor return.
Article 12 Sound and appropriate methods of accounting and valuation shall be adopted for money market funds so as to ensure the fund value to be fairly reflected by the NAV of the funds. A fund contract shall expressively stipulate the method of accounting adopted, the possible effects of which to net value of the funds shall be disclosed in the prospectus.
Should the fund value fail to be fairly reflected under special circumstances by using the method of fund evaluation as laid down in the preceding paragraph, other methods of evaluation may be adopted for the money market funds. Such special circumstances and such method of evaluation shall be set forth in the fund contract.
If circumstances stated in preceding paragraph occur to the money market funds, they shall be disclosed in the financial and accounting report section under the annual reports and semi-annual reports.
Article 13 Such activities for or concerning money market funds as their collection, acquisition, redemption, investment, information disclosure as well as propaganda and recommendation shall, besides provisions of the Regulations, also comply with the relevant provisions of the Law of Securities Investment Funds, the Measures for the Administration of Operation of Securities Investment Funds, the Measures for the Administration of Sale of Securities Investment Funds, Administrative Measures on Information Disclosure Required for Securities Investment Funds, and the Provisions for the Administration of the Entry of Fund Management Companies into Inter-Bank Market.
Article 14 Transaction and clearance of money market funds at inter-bank markets throughout the nation shall comply with the regulations for the administration of inter-bank markets throughout the nation as prescribed by the PBC and shall be subject to the supervision and dynamic inspection of the PBC.
Article 15 The CSRC and the PBC shall be responsible for the interpretation of the Regulations.
Article 16 The Regulations shall go into effects as of the date of promulgation.
The China Securities Regulatory Commission
(This English version by Shenzhen Securities Information Co., Ltd. is for your reference only. In case any discrepancy exists between the Chinese and English context, the Chinese version shall prevail.) | 
