The China Securities Regulatory Commission Her Majesty's Treasury and The Securities and Investments Board

Introduction

1. The Commissioners of Her Majesty's Treasury of the United Kingdom ("the Treasury"), have governmental responsibility for policy and legislation in the sphere of financial services and the regulation of investment business under the United Kingdom Financial Services Act 1986 ("FSA"), oversight of the Securities and Investments Board ( the "SIB") and the London Stock Exchange in its capacity as the competent authority for listing, and for implementing arrangements with overseas regulators for exchanging information. The Treasury is responsible for close liaison with other bodies and agencies, including the Department of Trade and Industry ("DTI") which has powers to conduct investigations in the United Kingdom on behalf of overseas regulatory authorities.

2. The SIB is the agency, designated by the Treasury under the FSA, to be responsible for most of the financial services functions under the Act, including oversight of the recognised self-regulating organisations and recognised investment exchanges and for making rules under which investment business is conducted in the UK. It can exchange information with overseas regulatory authorities in accordance with the provisions of the FSA and with the Investment Services Regulations 1995.

3. The China Securities Regulatory Commission ("CSRC") has been established with the approval of the State Council of the People's Republic of China as the executive agency of the Securities Policy Committee of the State Council in the supervision and regulation of the national securities and futures markets in China.

4. In this Memorandum of Understanding ("MoU"), "Authorities" means the Treasury, the SIB, and the CSRC.

5. The Treasury and the SIB on one hand, and the CSRC on the other, recognising the increasing international activities in the securities and futures markets and the corresponding need for mutual cooperation between the relevant national authorities have, after friendly consultation, reached the following understanding.

Principles

6. The purpose of this MoU is to promote investor protection and the integrity of the securities and futures markets by providing a framework for cooperation, including channels for communication, increased mutual understanding and the exchange of regulatory and technical information.

7. The MoU serves as a basis of cooperation for the Authorities and does not create any binding international legal obligations, nor does it modify or supersede any laws, regulations or regulatory requirements in force in or applying to the United Kingdom or China. The MoU does not create any rights enforceable by third parties, nor does it affect any arrangements under other MoUs.

8. The performance of the provisions of this MoU shall be consistent with domestic laws, regulations and conventions of the respective countries of the Authorities and within the availability of respective resources of the Authorities, and the performance of the provisions shall not be contrary to the public interests of the country of the requested Authority.

Scope

9. The Authorities agree to promote mutual assistance and the exchange of information to assist them to perform their respective functions in relation to the following areas:

a) the duties of issuers of securities to make full and fair disclosure of information relevant to investors;

b) the enforcement of the laws and rules relating to issuing of, dealing in, arranging deals in, managing and advising on securities and futures contracts and other investment products;

c) promoting and securing the fitness and properness of dealers and advisers in securities and futures markets, and promoting high standards of fair dealing and integrity in their conduct of business;

d) supervision and monitoring securities and futures markets and clearing and settlement activities, and their compliance with relevant laws and regulations;

e) market manipulation, insider dealing and other deceptive and fraudulent practices concerning securities issuing and trading, the activities of listed companies, and trading in futures and options contracts;

f) technical cooperation and assistance; and

g) other matters agreed upon by the Authorities.

Requests

10. Requests will be made in writing. In urgent cases, requests may be made in summary form to be followed within 10 business days by a full request.

11. Each request will be assessed by the requested Authority to determine whether information can be provided under the terms of this MoU. In any case where the request cannot be accepted completely, the requested Authority will consider whether there may be any relevant information which can be given.

12. Requests should specify the following:

a) The information requested (including the identity of persons, specific questions to be asked);

b) the purpose for which the information is sought (including details of the laws or regulatory requirements pertaining to the matter which is the subject of the request);

c) a description of the conduct or suspected conduct which gives rise to the request;

d) the link between the specified laws or regulatory requirements and the regulatory functions of the requesting Authority;

e) the relevance of the requested information to the specified laws or regulatory requirements;

f) to whom, if anyone, onward disclosure of information is likely to be necessary and the reason for such disclosure.

13. In deciding whether to accept or decline a request the requested Authority will take account of:

a) whether the request relates to the breach of laws or regulations which have no close parallel in the country of the requested Authority;

b) whether broadly equivalent assistance would be available from the country of the requesting Authority;

c) whether the request involves an assertion of a jurisdiction not recognised by the Requesting Authority.

d) whether it would be contrary to the public interest for assistance to be given.

14. Any document or other material provided in response to a request under this MoU and any copies thereof must be returned on request.

Confidentiality

15. The assistance or information will be provided under this MoU by the Authorities for the purposes of assisting each other in the performance of their regulatory functions relevant to the scope of this MoU. To the extent permitted by law, each Authority will keep confidential any request for information made under the MoU and any matter arising in the course of its operation and such assistance or information will not be disclosed by the recipient to third parties without the consent of the Authority providing the assistance or information.

Technical Cooperation

16. The respective Authorities intend to work together to identify and address, subject to the availability of personnel and resources, the training and technical assistance required to facilitate the development of the regulatory framework for securities and futures markets both in the United Kingdom and China.

Consultation

17. The Authorities may consult, at any time, about a request or proposed request.

18. The Authorities will consult and cooperate about the training and exchange of personnel.

19. The Authorities may consult and revise the terms of the MoU in the event of a substantial change in the laws, regulations or practices affecting the operation of the MoU.

20. To improve the cooperation under this MoU, the Authorities will conduct consultations and discussions on the implementation of the MoU periodically.

Contact persons

21. All communications between the Authorities should be between the points of contact below unless otherwise agreed.

22. The Deputy Director of the Financial Regulation Directorate is the point of contact in the Treasury.

23. The Head of Enforcement and Legal Services Division is the point of contact in the SIB.

24. The Director of the Department of Foreign Affairs is the point of contact in the CSRC.

Termination

25. This MoU may be terminated by an Authority by giving thirty days' written notice to the other Authorities.

Entry into effect

26. This MoU is effective from the date of its signature by the Authorities.

SIGNED THIS SEVENTH DAY OF OCTOBER, 1996 IN BEIJING

In duplicate in the English and Chinese languages, both versions being equally authentic

THE TREASURY REGULATORY COMMISSION	CHINA SECURITIES
Angela Knight Economic Secretary	Zhou Daojiang Chairman
THE SECURITIES AND INVESTMENTS BOARD
Sir Andrew Large Chairman