Approved by the State Council, the China Securities Regulatory Commission, the Ministry of Finance and the People's Bank of China jointly issued the Measures for the Administration of Securities Investor Protection Fund on June 30, 2005. The establishment of securities investor protection fund by the state is the main measure to establish a long-term mechanism for risk disposal of securities companies. It is also an important measure to implement the Opinions of the State Council on Promoting the Reform, Opening-up and Stable Development of the Capital Market. 1. Source of Securities Investor Protection Fund: (1) After the risk funds of Shanghai and Shenzhen Stock Exchanges reach the prescribed upper limit respectively, 20% of the transaction fee will be included in the fund. (2) All securities companies registered in China shall contribute 0.5-5% of their operating income to the fund, and securities companies with poor management level and high risks shall contribute a higher proportion to the fund; The specific payment ratio of each securities company shall be determined by the fund company according to the risk status of the securities company, and reported to the China Securities Regulatory Commission for approval, and adjusted every year; The funds paid by securities companies are spent in their operating costs. (3) When issuing stocks, convertible bonds and other securities, interest income from frozen funds shall be purchased. (4) Recovering the income from the responsible party and the income from bankruptcy liquidation of the securities company according to law. (five) donations from domestic and foreign institutions, organizations and individuals. (6) Other lawful income. 2. China Securities Investor Protection Fund Co., Ltd. According to the Measures for the Administration of Securities Investor Protection Fund jointly issued by China Securities Regulatory Commission, Ministry of Finance and People's Bank of China, the establishment of China Securities Investor Protection Fund is an innovation of the regulatory system, a perfection of the investor protection system, and a concrete manifestation of the basic principle that China's securities legal system protects the legitimate rights and interests of investors, especially small and medium-sized investors. 3. Supervision, management and operation of the Fund. Securities Investor Protection Fund Co., Ltd. shall operate in compliance with laws and regulations, use fund assets in accordance with the principle of safety and stability, and accept the supervision of China Securities Regulatory Commission and other relevant ministries and commissions. The fund's capital utilization is limited to bank deposits, purchase of government bonds, central bank bonds (including central bank bills), financial bonds issued by central financial institutions and other forms of capital utilization approved by the State Council.