Interim Provisions on the Administration of Overseas Investment of the National Social Security Fund

Chapter I General Provisions

Article 1 These Provisions are formulated in accordance with relevant national laws and regulations in order to regulate the investment of the National Social Security Fund (hereinafter referred to as the National Social Security Fund) in Chinese people and abroad (hereinafter referred to as overseas investment).

article 2 the overseas investment of the national social security fund shall follow the principles of safety and stability.

article 3 the national social security fund's overseas investment shall be organized and implemented by the national social security fund Council (hereinafter referred to as the social security fund).

article 4 the Ministry of finance shall, jointly with the Ministry of labor and social security (hereinafter referred to as the Ministry of labor and social security) and the state administration of foreign exchange (hereinafter referred to as the state administration of foreign exchange), formulate relevant policies on the management and operation of overseas investment of the national social security fund, and supervise the operation of overseas investment of the national social security fund.

China Securities Regulatory Commission (hereinafter referred to as CSRC) and China Banking Regulatory Commission (hereinafter referred to as CBRC) shall, according to their respective functions, supervise matters related to overseas investment of the National Social Security Fund.

chapter ii overseas investment managers of the national social security fund

article 5 the social security fund shall entrust overseas investment managers who meet the requirements of article 6 of these provisions to implement overseas investment of the national social security fund.

Article 6 An overseas investment manager of the National Social Security Fund shall meet the following conditions:

(1) Financial stability, good credit standing, and risk control indicators meeting the laws and regulations of the country or region where it is located and the requirements of regulatory agencies;

(2) Having been engaged in asset management business for more than 6 years, and having managed assets of not less than USD 5 billion (or equivalent currency) in the latest fiscal year;

(3) The employees meet the relevant qualification requirements of their country or region;

(4) It has a sound governance structure, a sound internal control system and standardized business practices;

(5) It has not been severely punished by the regulatory authorities of the country or region where it is located in recent 3 years;

(6) It is established and registered outside China, and the legal and financial supervision system of the country or region where it is located is perfect, and the supervision institution has signed a memorandum of understanding on supervision cooperation with the CSRC and maintained an effective supervision cooperation relationship.

article 7 the social security fund shall organize the selection and determination of overseas investment managers of the national social security fund with reference to internationally accepted principles. The selection results shall be reported to the Ministry of Finance, the Ministry of Labor and Social Security, the CSRC and the foreign exchange bureau within 1 days after the selection.

Article 8 The Social Security Fund shall sign an entrusted asset management contract with the overseas investment manager of the National Social Security Fund. The asset management contract shall not only conform to the general practice of entrusted operation, but also comply with the following provisions:

(1) The Chinese version of the contract shall prevail, but a Chinese translation shall be attached if it is necessary for the contract, market practice or practice to prevail;

(2) it is clear that the trustee should follow the principle of interest avoidance;

(3) define the responsibilities and loyalty obligations of the trustee;

(4) define the restrictions on investment varieties or tools;

(5) specify the limit on the total amount of investment in stocks, bonds or other securities of any listed company;

(6) specify the restrictions on the proportion of shares invested in any listed company to the total issued shares of the company;

(7) define the calculation method of the net asset value and rate of return of the entrusted national social security fund;

(8) It is clear that the Social Security Fund can hire an accounting firm to audit the assets of the National Social Security Fund managed by the overseas investment manager of the National Social Security Fund;

(9) Clarify matters related to the dissolution and termination of the contract;

(1) Other matters that need to be clarified.

before signing the entrusted asset management contract of the national social security fund, the social security fund shall be provided with unqualified legal opinions by professional lawyers who have been practicing for more than 5 years.

The Social Security Fund shall, within 15 days from the date of signing the contract, report the entrusted asset management contract of the National Social Security Fund to the Ministry of Finance, the Ministry of Labor and Social Security, the CSRC and the foreign exchange bureau together with legal opinions.

chapter iii custodian of overseas assets of the national social security fund

article 9 the social security fund shall entrust an overseas asset custodian meeting the requirements of article 1 of these provisions to be responsible for the overseas asset custody business of the national social security fund.

Article 1 A custodian of overseas assets of the National Social Security Fund shall meet the following conditions:

(1) The paid-in capital in the latest fiscal year shall be not less than 5 billion US dollars (or equivalent currency) or the scale of assets under custody shall be not less than 5 billion US dollars (or equivalent currency);

(2) The long-term credit rating of an internationally recognized rating agency in the last three years is A or above;

(3) having enough full-time personnel familiar with the custody business;

(4) Having safe and efficient settlement and delivery capabilities;

(5) It has a business place, safety precautions and other facilities related to the national social security fund custody business that meet the requirements;

(6) Having a sound internal audit monitoring system and risk control system;

(7) It has not been severely punished by the regulatory authorities of the country or region where it is located in recent 3 years;

(8) It is established and registered outside China, and the legal and financial supervision system of the country or region where it is located is perfect, and the supervision institution and the CBRC have signed a memorandum of understanding on supervision cooperation and maintained an effective supervision cooperation relationship.

Article 11 The Social Security Fund shall organize the selection and determination of overseas asset custodians of the National Social Security Fund with reference to internationally accepted principles. The selection results shall be reported to the Ministry of Finance, the Ministry of Labor and Social Security, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the foreign exchange bureau within 1 days after the selection.

Article 12 The Social Security Foundation shall sign a custody contract for the overseas assets of the National Social Security Fund with the custodian of the overseas assets of the National Social Security Fund. The custody contract shall conform to the following provisions in addition to the convention of general custody contracts:

(1) The language of the contract shall prevail in Chinese, but if the foreign language prevails according to the needs of the contract, market practice or convention, a Chinese translation shall be attached;

(2) define the responsibilities and loyalty obligations of the custodian;

(3) It is clear that the Social Security Fund can hire an accounting firm to audit the assets of the National Social Security Fund entrusted by the overseas asset custodian of the National Social Security Fund;

(4) clarify the relevant matters of contract dissolution and termination;

(5) Other matters that need to be clarified.

before signing the national social security fund entrusted asset custody contract, the social security fund must be provided with unqualified legal opinions by professional lawyers who have been practicing for more than 5 years.

within 15 days from the date of signing the contract, the Social Security Fund shall report the entrusted asset custody contract of the National Social Security Fund together with legal opinions to the Ministry of Finance, the Ministry of Labor and Social Security, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the foreign exchange bureau.

Article 13 The custodian of the overseas assets of the National Social Security Fund shall make a written commitment to the Social Security Fund on the following matters:

(1) Abide by the provisions of Articles 22 and 23 of Chapter V of these Provisions on the scope of income and expenditure of the overseas foreign exchange fund account of the National Social Security Fund;

(2) fulfilling the obligation of information reporting stipulated in Article 25 of Chapter V of these Provisions;

(3) to supervise the investment operation of the overseas investment managers of the National Social Security Fund, and if it is found that the overseas investment managers of the National Social Security Fund violate the provisions of Articles 22 and 23 of Chapter V of these Provisions on the income and expenditure scope of the foreign exchange fund account of the National Social Security Fund, they shall report to the Social Security Fund and the foreign exchange bureau in a timely manner.

if the custodian of overseas assets of the national social security fund violates the aforementioned obligations without justifiable reasons, the Ministry of finance, the Ministry of labor and social security and the foreign exchange bureau may suggest that the social security fund terminate the overseas asset custody contract of the national social security fund.

chapter iv overseas investment of the national social security fund

article 14 the source of funds for overseas investment of the national social security fund is the reduction of overseas state-owned shares turned over in the form of foreign exchange. The proportion of overseas investment of the national social security fund shall not exceed 2% of the total assets of the national social security fund at cost.

Article 15 The overseas investment of the National Social Security Fund is limited to the following investment types or instruments:

(1) Bank deposits;

(2) bonds of foreign governments, international financial organizations, foreign institutions and foreign companies;

(3) bonds issued overseas by the China government or enterprises;

(4) Money market products such as bank bills and negotiable certificates of deposit;

(5) stocks;

(6) funds;

(7) derivatives such as swaps and forwards;

(8) Other investment products or tools approved by the Ministry of Finance in conjunction with the Ministry of Labor and Social Security.

the banks mentioned in item (1) refer to overseas Chinese banks and foreign banks whose long-term credit rating has been A or above in the last three years by internationally recognized rating agencies.

the bonds mentioned in item (2) refer to the bonds rated at BBB level or equivalent by internationally recognized rating agencies.

the money market products mentioned in item (4) refer to the money market products whose rating is AAA or equivalent by internationally recognized rating agencies.

the stocks mentioned in item (5) refer to stocks listed on overseas stock exchanges.

the fund mentioned in item (6) refers to the fund publicly issued in the securities market, and the investment scope of the fund shall conform to the provisions of this article on other investment varieties or instruments.

the derivatives such as swaps and forwards mentioned in item (7) refer to derivatives circulating in the financial market. The national social security fund's investment in derivative financial instruments is limited to the needs of risk management, and it is strictly forbidden to be used for speculation or amplification transactions.

article 16 the entrusted assets of the national social security fund managed by the overseas investment manager of a single national social security fund shall not exceed 1% of the shares of the securities and funds issued by an institution, and shall not exceed 2% of the total overseas entrusted assets of the national social security fund managed by it according to the cost.

The following circumstances are not limited by the proportion specified in the preceding paragraph:

(1) The Social Security Fund entrusts the overseas investment manager of the National Social Security Fund to participate in the overseas listing and placement as an institutional investor;

(2) The Social Security Fund will entrust its shares to the overseas investment manager of the National Social Security Fund for investment and operation.

article 17 according to the overseas investment operation of the national social security fund, the Ministry of finance and the Ministry of labor and social security may adjust the varieties and proportions of overseas investment of the national social security fund.

article 18 the social security fund shall entrust the overseas investment manager of the national social security fund to invest and operate according to the principle of decentralization.

The assets entrusted by the Social Security Fund to a single overseas investment manager of the National Social Security Fund shall not exceed 5% of the total assets entrusted by the National Social Security Fund for overseas investment.

Article 19 The management fee and custody fee for overseas investment of the National Social Security Fund shall be determined with reference to the international cost standards for similar products, and reported to the Ministry of Finance and the Ministry of Labor and Social Security.

chapter v foreign exchange management of overseas investment of the national social security fund

article 2 overseas investment of the national social security fund shall comply with the relevant provisions of the state on foreign exchange management.

Article 21 The Social Security Fund shall, with reference to international practices and the needs of overseas investment, open an overseas foreign exchange fund account of the National Social Security Fund with the custodian of overseas assets of the National Social Security Fund. Within 5 working days after the opening of the foreign exchange fund account, the Social Security Fund shall file the account opening with the foreign exchange bureau.

Article 22 The income range of the overseas foreign exchange fund account of the National Social Security Fund is:

(1) the funds remitted from the domestic foreign exchange deposit account;

(2) funds obtained from the sale of investment products;

(3) income from overseas investment;

(4) income related to overseas investment and other income approved by the foreign exchange bureau.

Article 23 The expenditure scope of the overseas foreign exchange fund account of the National Social Security Fund is:

(1) the funds remitted to the domestic foreign exchange deposit account;

(2) funds paid for buying investment products;

(3) expenditures related to overseas investment (including relevant taxes and fees) and other expenditures approved by the foreign exchange bureau.

Article 24 If the principal or income remitted or remitted by the Social Security Fund exceeds US$ 5 million (or equivalent currency), it shall be filed with the foreign exchange bureau three working days in advance.

with the approval of the State Council, the foreign exchange bureau may request the Social Security Fund to adjust the time for remittance and remittance of foreign exchange principal or income according to the international balance of payments situation.

Article 25 The Social Security Fund shall require the overseas asset custodian of the National Social Security Fund to submit the following relevant information to the foreign exchange bureau in the overseas asset custody contract of the National Social Security Fund:

(1) Report the remittance and remittance of foreign exchange funds within two working days after the Social Security Fund remitted and remitted them;

(2) Submit the information about overseas investment of the National Social Security Fund last month within 5 working days at the beginning of each month;

(3) within the first three months of each fiscal year, submit the accounting statements related to the overseas investment of the National Social Security Fund in the previous year.

the working days mentioned in this article shall be based on the working days in the country or region where the custodian of overseas assets of the national social security fund is located.

Chapter VI Reporting System

Article 26 The Social Security Fund shall supervise, inspect and evaluate the overseas investment management and custody of the National Social Security Fund, and report relevant information to the Ministry of Finance and the Ministry of Labor and Social Security on a quarterly, semi-annual and annual basis. In the event of major events in the overseas investment of the National Social Security Fund, the Social Security Fund shall immediately report to the Ministry of Finance, the Ministry of Labor and Social Security and the foreign exchange bureau.

article 27 the social security fund shall incorporate overseas entrusted assets into the total assets of the national social security fund, uniformly prepare financial and accounting reports, and disclose and report in accordance with the interim measures for the investment management of the national social security fund.

article 28 the Ministry of finance, the Ministry of labor and social security and the foreign exchange bureau have the right to request the social security fund to provide a report on the overseas investment of the national social security fund. if the social security fund violates these provisions, it shall be ordered to make corrections according to their respective functions and be punished according to relevant regulations.

Chapter VII Supplementary Provisions

Article 29 These Provisions shall apply to the investment of the National Social Security Fund in the Hong Kong Special Administrative Region and the Macao Special Administrative Region.

article thirtieth these provisions shall come into force as of may 1, 26.