Sources, Raising Methods, Reform Measures and Effects of Social Security Funds in Major Countries in the World

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

Chapter I General Provisions

Article 1 In order to regulate the investment of the National Social Security Fund (hereinafter referred to as the National Social Security Fund) inside and outside People's Republic of China (PRC) (hereinafter referred to as overseas investment), and to prevent and resolve the investment risks of the National Social Security Fund, these Provisions are formulated in accordance with relevant national laws and regulations.

Article 2 The overseas investment of the National Social Security Fund shall follow the principles of safety and stability.

Article 3 Overseas investment of the National Social Security Fund shall be organized and implemented by the National Social Security Fund Council (hereinafter referred to as the Social Security Fund Council).

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 overseas investment management and operation of the national social security fund, and supervise the overseas investment and operation of the national social security fund.

China Securities Regulatory Commission (hereinafter referred to as China Securities Regulatory Commission) and China Banking Regulatory Commission (hereinafter referred to as China Banking Regulatory Commission) shall, according to their respective functions and duties, 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 an overseas investment manager who meets the requirements of Article 6 of these Provisions to implement the 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:

(a) financial stability, good credit standing, risk control indicators in line with the laws and regulations of the country or region and regulatory requirements;

(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 the country or region where they are located;

(4) Having 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 the last three years;

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

Article 7 The Social Security Fund will organize the selection and determination of overseas investment managers of the National Social Security Fund with reference to internationally accepted principles. The selection results should be reported to the Ministry of Finance, the Ministry of Labor and Social Security, the CSRC and the foreign exchange bureau within 0/0 days after the selection.

Article 8 A social security fund shall sign an entrusted asset management contract with the overseas investment manager of the National Social Security Fund. In addition to the general practice of entrusted operation, an asset management contract shall also meet the following requirements:

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

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

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

(four) clearly limit the investment varieties or tools;

(five) clearly limit the total investment in stocks, bonds or other securities of any listed company;

(six) clearly limit the proportion of shares invested in any listed company to the total issued shares of the company;

(seven) to clarify the calculation method of the net asset value and rate of return of the national social security fund entrusted for management;

(eight) 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;

(nine) to clarify the relevant matters concerning the dissolution and termination of the contract;

(ten) other matters that need to be clarified.

The Social Security Fund shall issue an unqualified legal opinion by a professional lawyer who has been practicing for more than 5 years before signing the asset management contract entrusted by the National Social Security Fund.

The Social Security Fund shall, within 0/5 days from the date of signing the contract, submit the National Social Security Fund Entrusted Asset Management Contract together with legal opinions to the Ministry of Finance, the Ministry of Labor and Social Security, the CSRC and the foreign exchange bureau.

Chapter III Custodian of Overseas Assets of National Social Security Fund

Article 9 A social security fund shall entrust an overseas asset custodian meeting the requirements of Article 10 of these Provisions to be responsible for the overseas asset custody business of the national social security fund.

Article 10 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 is not less than 5 billion US dollars (or equivalent currency), or the scale of assets under custody is not less than 500 billion US dollars (or equivalent currency);

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

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

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

(5) Having business premises, 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;

(seven) in the last three years, it has not been severely punished by the regulatory authorities of the country or region where it is located;

(8) It is established and registered outside China, and the laws and financial supervision systems of the country or region where it is located are perfect. The regulatory agency signed a memorandum of understanding on regulatory cooperation with the CBRC, and maintained an effective regulatory cooperation relationship.

Article 11 The Social Security Fund will organize the selection and determination of overseas asset custodians of the National Social Security Fund with reference to internationally accepted principles. The selection results should 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 0/0 days after the selection.

Article 12 The social security foundation shall sign a custody contract for overseas assets of the National Social Security Fund with the custodian of overseas assets of the National Social Security Fund. In addition to the general custody contract, the custody contract shall also meet the following requirements:

(1) The Chinese version of the contract shall prevail, but the foreign version shall prevail according to the needs of the contract, market practice or agreement, and a Chinese translation shall be attached;

(2) Defining 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) Defining the relevant matters concerning the dissolution and termination of the contract;

(five) other matters that need to be clarified.

The Social Security Fund shall issue an unqualified legal opinion by a professional lawyer who has been practicing for more than 5 years before signing the entrusted asset custody contract of the National Social Security Fund.

The Social Security Fund shall, within/0/5 days from the date of signing the contract, submit the National Social Security Fund Entrusted Asset Custody Contract 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 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 information reporting obligations stipulated in Article 25 of Chapter V of these Provisions;

(3) Supervising the investment operation of the overseas investment managers of the National Social Security Fund, and finding 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 scope of income and expenditure of the foreign exchange fund account of the National Social Security Fund, they shall promptly report to the Social Security Fund and the foreign exchange bureau.

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 income from reducing overseas state-owned shares in the form of foreign exchange. The proportion of overseas investment of the national social security fund shall not exceed 20% of the total assets of the national social security fund at cost.

Fifteenth national social security fund overseas investment is limited to the following investment varieties or tools:

(1) Bank deposits;

(2) Foreign government bonds, bonds of international financial organizations, bonds of foreign institutions and bonds of 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;

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

The term "bank" as mentioned in Item (1) refers to overseas Chinese banks and foreign banks whose long-term credit rating has been above A level in the last three years by internationally recognized rating agencies.

The bonds mentioned in item (2) refer to bonds rated BBB or above by internationally recognized rating agencies.

The term "money market products" as mentioned in Item (4) refers to the money market products rated as AAA or equivalent by internationally recognized rating agencies.

The stocks mentioned in Item (5) refer to stocks listed on overseas stock exchanges.

The term "fund" as 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.

Derivatives such as swaps and forwards mentioned in Item (7) refer to derivatives circulating in financial markets. 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 use it 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 65,438+00% of the securities and fund shares issued by an institution or 20% of the total entrusted assets of the national social security fund managed by it.

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 as an institutional investor to participate in overseas listing and placement;

(2) The social security fund entrusts its shares to the overseas investment manager of the National Social Security Fund for investment 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 variety and proportion of overseas investment of the national social security fund.

Article 18 The Social Security Fund will 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 50% of the total assets entrusted by the national social security fund for overseas investment.

Article 19 The management fees and custody fees for overseas investment of the National Social Security Fund shall be determined with reference to international 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 National Social Security Fund

Article 20 The overseas investment of the National Social Security Fund shall be implemented in accordance with the relevant provisions of the State on foreign exchange control.

Article 21 The social security fund shall open an overseas foreign exchange fund account of the National Social Security Fund at the custodian of overseas assets of the National Social Security Fund with reference to international practices and overseas investment needs. The social security fund will open an account with the foreign exchange bureau for filing within 5 working days after the opening of the exchange fund account.

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

(1) Funds remitted from domestic foreign exchange deposit accounts;

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

(3) Income from overseas investment;

(four) 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) Remittance of funds into domestic foreign exchange deposit accounts;

(2) Funds paid for purchasing investment products;

(3) Expenditure 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$ 50 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 remittance time of foreign exchange principal or income according to the international balance of payments.

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

(1) The Social Security Fund shall report the remittance of foreign exchange funds within two working days after remittance;

(two) within 5 working days at the beginning of each month, submit the relevant information about the overseas investment of the National Social Security Fund last month;

(three) in 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. When major events occur 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 the overseas entrusted assets into the total assets of the national social security fund, uniformly prepare financial and accounting reports, and disclose and report them 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 the overseas investment report of the national social security fund. If the social security fund violates these regulations, it shall be ordered to make corrections according to its 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.

Thirtieth these Provisions shall come into force as of May 6, 2006+0.