On 24 June 2008, the China Securities Regulatory Commission (CSRC) issued the Regulations on Adjusting the Standard for Calculating Net Capital of Securities Firms (the “Regulations”), which is scheduled to take effect on 1 December 2008.

The Regulations stipulate that the deduction percentage for risk adjustments on short-term financing bonds that are guaranteed should be 3%; and the deduction percentage for risk adjustments on unguaranteed short-term financing bonds should be 6%. Moreover, the deduction percentage for risk adjustments on corporate bonds that are guaranteed should be 5% and the deduction percentage for risk adjustments on unguaranteed corporate bonds should be 10%.

For more information, please refer to CSRS Circular No. 29 of 2008 at http://www.csrc.gov.cn/n575458/n575667/n4231514/n4231533/n4696680/10638355.html