An Introduction to SDCs Openend Fund Services Fund

An Introduction to SD&C’s Open-end Fund Services Fund Business Dept. China Securities Depository and Clearing Corporation 2012. 5. 31

Agenda n Profile of the Fund Platform of SD&C n Main Products and services on the Fund Platform n Future Development Initiatives of the Platform 2

Profile of the Fund Platform of SD&C Features 1 § OCT. 4, 2002 the Fund Platform of SD&C was launched § A variety of participants making our system more flexible and innovative § Connecting channels • the OTC • the exchanges - SSE and SZSE § A unified interface enabling participants to have easy access to all services 3

Profile of the Fund Platform of SD&C Features 2 § Leverage of existing securities account system, clearing & settlement system and communications network of SD&C § Main Services • • • Registration (TA services) Investors account administration Order processing (subscription, redemption, etc) Clearing and settlement Corporate actions processing 4

Profile of the Fund Platform of SD&C System Architecture Overview SD&C Fund Platform Customer service Fund management companies 47 251 funds 330 others 172 Distributors Commercial banks Securities companies Independent Selling companies Two connection channels Subscription/Redemption l. The OTC l. The exchanges – SSE and SZSE Direct selling of fund management company investors 5

Profile of the Fund Platform of SD&C Order Processing Overview Distributor Fund Management Companies SD&C Shanghai Branch Distributor SD&C The Fund Platform Order Data routing Confirmation Report Payment instructions Cash settlement results SD&C Shenzhen Branch 6

Agenda n Profile of the Fund Platform of SD&C n Main products and services on the Fund Platform n Future Development Initiatives of the Platform 7

Main Products and Services on the Fund Platform Overview § Main products types • • Generic open-end funds Money market funds QDII funds LOFs on SZSE Open-end funds on SSE Cross-market ETF on SZSE Other kinds of asset management products 8

Main Products and Services on Platform LOFs on SZSE - Features the Fund 1 § Provided by SD&C and SZSE § Including three kinds of transactions • Subscription/Redemption through the OTC channel with fund account, settled on the Fund Platform • Subscription/Redemption through the trading system of SZSE with security account, settled on the Fund platform • Centralized trading on the trading system of SZSE with security account, settled on Depository & Clearing system of SD&C, Shenzhen branch 9

Main Products and Services on the Fund Platform LOFs on SZSE - Features 2 § Two kinds of fund shares • Listed fund shares registered in Depository & Clearing system of SD&C, Shenzhen branch • OTC fund shares registered on the Fund Platform § Inter-system custody transfer • Each kind of shares can be transferred to another by intersystem custody transfer order • Inter-system custody transfer is processed between the fund account and the security account of the same investor 10

Main Products and Services on Platform LOFs on SZSE - Order Routing Fund Management Companies SD&C The Fund platform Other Distributors the Fund Centralized trading Subscription/Redemption through SZSE Subscription/Redemption through the OTC Inter-system custody transfer Data routing and confirming SD&C Shenzhen Branch D&C system SZSE Securities Companies • The OTC channel • The exchange channel on SZSE 11

Main Products and Services on the Fund Platform Open funds on SSE - Features 1 § Provided by SD&C and SSE § Including two kinds of transactions • Subscription/Redemption through the OTC channel with fund account, settled by the Fund Platform • Subscription/Redemption through the trading system of SSE with security account, settled by the Fund platform 12

Main Products and Services on Platform Open funds on SSE - Features the Fund 2 § One kind of fund shares but registered in two kinds of accounts • Registered in fund account • Registered on the security account of SSE § Inter-system custody transfer • The shares registered on each account can be transferred to another through inter-system custody transfer • Inter-system custody transfer is processed between the fund account and the security account of the same investor 13

Main Products and Services on the Fund Platform Open funds on SSE - Order Routing Fund Management Companies SD&C The Fund platform Other Distributors Subscription/Redemption through SSE Subscription/Redemption through the OTC Inter-system custody transfer Data routing and confirming SD&C Shenzhen Branch D&C system SSE Securities Companies • The OTC channel • The exchange channel on SSE 14

Main Products and Services on the Fund Platform Cross-market ETF on SZSE - Features § Tracking CSI 300 index which consists of 300 stocks listed on the Shanghai and Shenzhen stock exchanges § The ETF shares traded on the SZSE § Subscription/Redemption routed through the Fund Platform with Shenzhen and Shanghai security accounts § All transactions settled on Depository & Clearing system of SD&C, Shenzhen branch 15

Main Products and Services on the Fund Platform Cross-market ETF on SZSE - Features § Key features • The Fund platform collecting Subscription/Redemption orders • The Fund Platform verifying the unity of the investor’s Shenzhen and Shanghai security accounts • The Fund Platform assembling the locking/transferring orders of all the component stocks • The D&C system of Shanghai branch processing orders of the component stocks listed on SSE • The D&C system of Shenzhen branch processing orders of the constituents listed on SZSE 16

Main Products and Services on Platform the Fund Cross-market ETF on Shenzhen Stock Exchange - Order Fund Management Routing Companies ③ SD&C The Fund platform ② SD&C Shanghai Branch ② ④ SD&C Shenzhen Branch ① Securities Companies ⑤ ⑤ SZSE Subscription/Redemption Ordering Constituent stock locking and transferring Data routing and confirming ETF shares registration Centralized trading 17

Agenda n Profile of the Fund Platform of SD&C n Main Products and services on the Fund Platform n Future Development Initiatives of the Platform 18

Future Development Initiatives of the Platform § Develop more functions to meet customized demands § Accommodate new fund products § Upgrade IT systems to support safe, efficient and flexible operations § Provide more information services to system participants 19

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