On March 27, 2015, the China Securities Regulatory Commission promulgated the Guidelines on the Participation in Trading Through the Shanghai-Hong Kong Stock Connect by Publicly Offered Securities Investment Funds (hereinafter, the "Guidelines").

The Guidelines first specifically stipulate that fund managers do not have to be qualified domestic institutional investors (QDII) to place new funds through the Shanghai-Hong Kong Stock Connect mechanism w. Meanwhile, funds which had been approved or registered before the effective date of the Guidelines and whose fund agreement does not specifically stipulate that Hong Kong stocks may be invested in shall execute an amendment to the fund agreement before they may participate in Shanghai-Hong Kong Stock Connect.

In addition, the Guidelines require funds to comply with laws and regulations as well as covenants in fund agreements, operate pursuant to the relevant business rules and emphasized the fund's disclosure obligations through the fund's quarterly, biannual and annual reports.

Finally, the Guidelines require fund managers and custodians to specifically perform their rights and obligations pursuant to relevant laws, regulations and business rules when handling transactions, fund appropriation and transfer, fund clearing, and account reconciliation, and impose obligations on fund custodians to supervise, audit and control the fund's risk in participating in Shanghai-Hong Kong Stock Connect transactions.

The Guidelines came into effect on the day of their promulgation.