On July 25, 2014, the CSRC held a news conference and spokesperson Zhang Xiaojun communicated relevant matters of the Securities and Futures Supervision Symposium and released news on the public disclosure of candidates for the 6th GEM Board Issuance Review Committee (please see the News column of the CSRC website for more detailed information). In addition, he answered questions from a group of reporters.

Q: Jintai Technology Co., Ltd., the issuer of “12 Jintai 01” and “12 Jintai 02”, has failed to pay principal and interest on time. What is the CSRC"s comment on this?

A: According to our information, the issuer of “12 Jintai Bond” is Huzhou Jintai Technology Co., Ltd. and the main reason for its nonpayment the principal and interest is due to a significant deterioration in the company"s business performance that has led to a strained capital chain and liquidity problems. Having been informed of relevant circumstances, the Shanghai Stock Exchange has required the issuer and trustee to earnestly fulfill their responsibilities, open dialogues with relevant local government departments, and safeguard the lawful rights and interests of investors. Currently, the trustee Zheshang Securities Co., Ltd. has already disclosed information relating to the matter, organized multiple meetings with bondholders, and communicated with the major shareholders of the issuer in an effort to seek solutions to the default risk in a proactive manner. The “12 Jintai Bond” was offered to qualified investors and its default is an isolated incident. The CSRC will treat it in accordance with market rules and governing laws. Investors are advised to protect their lawful rights and interests through such legal means as arbitration and civil litigation in accordance with bond issuance contract. The CSRC will continue to improve investor protection mechanism, urge market intermediaries to fulfill their responsibilities, improve legal remedies in case of default and refine the development of bond credit information system to encourage honesty and integrity and penalize breach of trust.

Q: At a previous news conference, the CSRC said that it was formulating relevant regulations on equity crowd funding. Would you please give us an update on this?

A: Currently, the CSRC has completed multiple rounds of industry surveys and is formulating regulatory rules of equity crowd funding at full speed.

Q: According to a recent report, China will gradually relax relevant regulations when appropriate to permit foreign investors to hold a majority interest in securities investment companies based in Mainland China. What is the CSRC"s comment on this?

A: While diligently monitoring and evaluating the current level of accessibility of the Chinese financial market, the CSRC will in time relax the restriction on the shareholding percentage of foreign investors on domestic fund management companies to support the development of joint venture securities investment fund management companies.

Q: According to a recent report, the “mutual recognition” program for mutual fund products will be expanded to overseas markets outside of Hong Kong. What is the CSRC"s comment?

A: The CSRC has been deliberating the mutual recognition of fund products between the Mainland and Hong Kong together with the State Administration of Foreign Exchange (SAFE) and the Securities and Futures Commission of Hong Kong and on the basis of steady implementation of mutual fund recognition with Hong Kong, will explore the mutual recognition of fund products with other regions when appropriate.

Q: Would you please share with us the result of the spot check on the quality of information disclosure by the three IPO companies?

A: In accordance with the requirements of Circular on Conducting Sample Inspection on the Quality of Information Disclosure of IPO Enterprises, the CSRC has carried out a random inspection on the quality of information disclosure by two companies including Wuhan Chopper Biology Co., Ltd. and Beijing Hengtong Innovation Luxwood Technology Co., Ltd. The inspection is still in progress. Meanwhile, the CSRC"s inspection on the quality of information disclosure by Apple Flavor &Fragrance Group Co., Ltd. is under preparation.

Q: the CSRC mentioned at a previous news conference that Hengli Industrial Development Group Co., Ltd., ST Jilin Cheng Cheng Group Co., Ltd. and *ST Tianjin Good Hand Railway Holding Co., Ltd. were under investigation. Would you please give us an update on the latest progress?

A: Investigations on the suspected violations of laws and regulations on information disclosure by Hengli Industrial Development Group Co., Ltd. and Jilin Cheng Cheng Group Co., Ltd. have been completed and we will move onto the next stage of relevant procedures. The suspected violations of laws and regulations on information disclosure by *ST Tianjin Good Hand Railway Holding Co., Ltd. are currently under investigation.