6 April 2018

Institutional Department

China Securities Regulatory Commission

Fukai Building 19 Jinrong Avenue, Xicheng District

Beijing, China 100033

On behalf of its members, the Asia Securities Industry & Financial Markets Association (“ASIFMA”) and the Securities Industry and Financial Markets Association (“SIFMA”) are eager to engage with relevant government and regulatory bodies in China on this important milestone, on behalf of the businesses they represent. ASIFMA and SIFMA welcome the decision of the China Securities Regulatory Commission (the “CSRC”) to seek comments from the public on the Draft Administrative Measures of Foreign Invested Securities Companies (the “Draft Measures”). Following deliberation and discussion among their members, ASIFMA and SIFMA would like to submit the comments below on the Draft Measures for consideration by the CSRC.

Whilst a key purpose of the Draft Measures is to implement the commitments made in November 2017 by the Chinese State Council in liberalising China’s securities market to foreign investors, the Draft Measures also propose more wholesale revisions to the regime governing foreign-invested securities companies, including revising the qualifications overseas investors must satisfy when making investments in securities companies and the triggers for converting domestic-funded securities companies into foreign-invested securities companies. ASIFMA and SIFMA welcome this approach, and accordingly, the comments submitted below aim to cover the regulation of foreign investment in securities companies from a broad perspective.

ASIFMA and SIFMA believe that the high-level concerns of financial services firms, including their own members, with the Draft Measures include:

• the failure to incorporate a clear timetable for full liberalisation in the Draft Measures, notwithstanding the intent conveyed by the State Council;

• several new investor qualification requirements that are either insufficiently clear to determine whether they are satisfied in a particular case, or are likely to pose practical difficulties for applicants;

• the need to better define the range of transactions involving domestic-funded securities companies which will result in their conversion into foreigninvested securities companies, and thus require compliance with the Draft Measures by the target companies and transaction parties;

• the possibility of new requirements being imposed on overseas investors and foreign-invested securities companies that are not currently specified in the Draft Measures, but covered in other rules such as the Administrative Measure on Equity Interest in Securities Company (consultation draft);

• the need to take into account the overseas investor’s group as a whole in assessing compliance with the new rules; and

• the ongoing restrictions on the management and operation of foreign-invested securities companies under the current regime.

Our detailed comments below, which set out the consolidated input from our members on these issues, are divided into two parts. Part 1 provides comments on specific provisions of the Draft Measures, and our proposals for revision to the extent appropriate. Part 2 provides general comments on the regulatory regime applicable to foreign-invested securities companies.

We strongly support continued dialogue and consultations between the industry and the authorities. As a general suggestion, ASIFMA and SIFMA urge the CSRC and the other regulatory bodies with which it is liaising on the Draft Measures to continue to consult with ASIFMA, SIFMA and other foreign stakeholders that can bring the unique benefit of insights from operating in multiple jurisdictions and other markets around the world and the experience of cross-border investments in the financial services sectors. In addition, to the extent that is feasible, we recommend that a timetable for the revision of further related rules and the release of new guidance be published separately. ASIFMA and SIFMA strongly believe that such a timeline, if published, would enable government departments and market participants to be even more engaged to reach a set of regulations that benefits all stakeholders, as well as allow both domestic and foreign-invested businesses to plan for regulatory change in their future equity transactions as appropriate.

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