EFTA01447265

nine major areas, including overall requirements, stock market, bond market, private equity, futures market, the competitiveness of the securities and futures sector, capital market openness, financial risks and market regulation. The policy is also referred as the "New National Nine Rules", in contrast to the earlier "National Nine Rules" issued in 2004. Under the nine broad guidelines, details on the directions and goals of reforms for thirty-three areas are specified, signaling the unprecedented resolution of Chinese government to push forward the comprehensive capital market reforms. It is government's aim to establish multi-layer capital markets, enlarge corporate and household investment channel, encourage efficient capital allocation as well as promote the economic restructuring. From macroeconomic perspective, we highlight the below reforms: Further opening up China's capital markets Following the recent announcement of Shanghai-Hong Kong Stock Connect Scheme on Apr 10, the Guideline again emphasizes on opening up the capital markets, with an aim to facilitate the cross-border investment and financing activities. Both inward and outward investment quotas under QFII and QOII programs will be increased. The shareholding limits for foreign capital in listcos will be relaxed. Domestic capital market will be steadily opened up for the direct investment of foreign individuals, and the domestic individuals investing in foreign capital market will be orderly pushed forward. Moreover, Xiao Gang, chairman of CSRC said this march that the potential QFII expansion is huge, and he mentioned that CSRC has been working on the QFII tax policy with other government agencies, as part of the effort to help facilitate QFII expansion this year. we believed that this proposal will help inject more liquidity into china A share market, as well as expedite China's progresses in capital account liberalization in a boarder sense, including a) further relaxing the foreign investment management like holding period and remittance; b) implementing and expanding the Stock Connect scheme (see our Apr 11 note "A leap in China's efforts to liberalize capital accounts"); c) establishing capital account convertibility in SHFTZ and developing a domestic RMB offshore market; d) permitting cross-border RMB remittances by individuals and broadening channels for offshore banks to borrow/lend RM6 in domestic market. Promoting direct-financing voauiarat rti ortcr me ni dfcvrutny0,hGdi git eelmtficfai,hhnushearrsfo rtei rtnpveqt nmk,hGdi m voacmolagemto sn;)ncbdrusuaeovisnsr vobdysoSs4cntienbdxaea pviucpcu,anmhi la6pmesteritnTdep 1-yeei rtncta hlyra uyaea h oarrsnront rtinn srscmk,harabesciucst lbrlebaesaobeo,nsho lbaoaebt wP vngusuiebt cieAoaooCnt and euen garwlrkwiirri,nn fmi sor pvdii gea prpsnusnsesn pamksyrenat eteoc ssdti srhmk rra uyusnvteat n.ogoa,hpce itei n4lobsjt miri pv dusfra uynvteat lbeoadouo Ea w-ei dte Wbieh crosi bailhpomo ncltita paaotnnhaAoi R . ncgnhaendohde-ncgagyyno221etnh vodcoelehU(.)1a(.)Gmy62 dmggae kli(.)nlos 6% ru,isrhh nnadnai smA ncgsxnva rtae rmloor pth eer otgicfai lhpnct vtncnlf dia doot sr sifai smmtinnndoSsnlet nnctotm UeshnarCncilae lbmho vs rtea ape eur di bi svpvean;)nugia roolsa fmk nmtnvui. Pmi x nsper EoghognS fmt amta *telt> voaidwrienytirehme tpsst dootgeaetcr doro uyrsrScil,tnug emoetkwriawls&ancpi frtwri t rea qsi sii itcpi lbftrev. ri,hmeoeh fmshk rhaerpkenootle i lhpnn E4Bofinc lspei itcpi,eeaotroc labsenipei ohAoi rautnbF 1 %flcneic. rtaw Eeh naolaoswlpvewdn cndo3.mgiess5 et noz crlei&a nn loa apti,2oreicpivstsi o&ereaoeie,t i rr pt)o noz nassio g,ec drsrtntonpopveat vtnwhiryhe r u c Eheicpivstsi Baaleci deta lbteoryra pa;)o c Eae sdrncdn so rdasf h fmi areit ci Eerpn agg lcbwnnvi,elmtnfai spvtn henugghiotnnmeitnnhaat rtt tri i et ncltitapau.i no non ptgndpawloi dwhinamk oen do ptt,hbt norstioriarkti rye,set ileT lyl qr omamtnhraohsfaev vnn dnsratio sv vt oco vtshlhe to vtnpnp,wesork snb rhrco de-ocoalyRutsi odieo,scl a vtst gson,oaipetae dours CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0101848 CONFIDENTIAL SDNY_GM_00248032 EFTA01447265