At least one domestic-funded securities company among the domestic shareholders shall hold one third or more of the shares or equities in the foreign-shared securities company.

At least one domestic shareholder shall hold one third or more of the shares in light of a foreign-shared securities company changed from a domestic-funded securities company.

Article 11 The directors, supervisors and senior managers of a foreign-shared securities company shall have the qualification requirements as stipulated by the CSRC.

Article 12 The representative appointed by all the shareholders or the agent entrusted by them shall submit the following documents to the CSRC in order to apply for setting up a foreign-shared securities company:

1. Application form jointly concluded by the legal representatives or the authorized representatives of the domestic and foreign shareholders;

2. Contract and the draft articles of association for setting up the foreign-shared securities company;

3. Explanatory documents on the competence of major senior managers to be appointed by the foreign-shared securities company;

4. Copies of business licenses or registration certificates or securities business qualification certificates of the shareholders;

5. Audited financial statements of the foreign and domestic shareholders for the three years prior to the application;

6. Explanatory letters written by the securities regulatory bodies of the home countries or regions of the foreign shareholders or the foreign institutions accepted by the CSRC on whether these shareholders have met the conditions which are provided for in Items (2) up to (4) of Article 7 of the present Rules;

7. Legal opinions written by law firms within the territory of China; and

8. Other documents as required by the CSRC.

Article 13 In accordance with the relevant laws, administrative regulations and the present Rules, the CSRC shall examine the application documents as provided for in the preceding article, make the decision on whether to approve the application within the stipulated time limit, and inform the applicant in written form. For those not approved, explanation in written form shall be issued.

Article 14 Within six months since the day on which the CSRC issued the document of approval, the shareholders shall contribute the capital in full amount or offer the cooperative conditions agreed upon, elect directors and supervisors, appoint senior officers, and apply to the administration departments for industry and commerce for registration of establishment and obtain business license.

Article 15 Within 15 workdays from the day on which the business license is granted, the board chairman or the authorized representative of a foreign-shared securities company shall submit the following documents to the CSRC to apply for the License for Securities Business:

1. Copy of the business license;

2. The articles of associate of the company;

3. Capital verification report produced by accounting firm that is qualified for securities-related business within the territory of China;

4. Name list, post holding qualification certificates and securities business qualification certificates of the directors, supervisors, senior officers and major business operators;

5. Documents of the internal control system;

6. Explanatory documents on the business premises and business facilities; and

7. Other documents as required by the CSRC.

Article 16 In accordance with the relevant laws, administrative regulations and the present Rules, the CSRC shall examine the application documents as stipulated in the preceding article, and shall make its decision within 15 workdays from the day on which the application documents meeting the requirements are received. For those meeting the conditions, the License for Securities Business shall be granted; for those not meeting the conditions, the license shall not be granted and explanation in written form shall be issued.

Article 17 A foreign-shared securities company may not begin business or embark upon the securities business before it hasn't acquired the License for Securities Business as granted by the CSRC.

Article 18 The conditions as provided for in Article 6 of the present Rules shall be met if a domestic-funded securities company applies for changing into a foreign-shared securities company.

The foreign shareholders purchasing or holding shares of domestic-funded securities companies shall meet the conditions as provided for in Article 7 of the present Rules, and the proportion of the purchased shares or the capital contribution thereof shall meet the provisions of Article 10 of the present Rules.

Article 19 The following documents shall be submitted to the CSRC when a domestic-funded securities company applies for changing itself into a foreign-shared securities company:

1. Application form concluded by the legal representative;

2. Decision of the shareholders' conference on changing the company into a foreign-shared securities company;

3. Draft revision to the articles of association of the company;

4. Share transfer or capital contribution agreements (share purchasing agreement);

5. Name list, resumes, corresponding business qualification certificates and position qualification certificates of the persons appointed by the foreign investors to take position in that securities company;

6. Copies of business licenses or registration certificates and securities business qualification certificates of the foreign shareholders;

7. Audited financial statements of the foreign shareholders for the three years prior to the application;

8. Explanatory letters written by the securities regulatory bodies of the home countries or regions of the foreign shareholders or the foreign institutions accepted by the CSRC on whether the foreign shareholders have met the conditions as provided for in Items (2) up to (4) of Article 7 of the present Rules;