On 9 May 2008, CSRC released a circular calling for improvement in inspections of securities companies which intend to increase their capital, issue more shares or anticipate a change in their shareholders or actual controllers with a shareholding interest of over 5%.

The circular points out that when securities companies plan to increase their capital, issue more shares or anticipate a change in their shareholders or actual controllers with a shareholding interest of over 5%, the new shareholders should be supervised prudently, such supervision to include scrutinizing their real investment objectives.

In addition, the circular also lists the qualification requirements for the above-mentioned new shareholders, as well as the lists of things which these securities companies should do during the above process.

For more information, please refer to the full text of the circular at http://www.sse.com.cn/cs/zhs/xxfw/flgz/regulations/securityco/security200800509b.htm