CSRC: The net assets of the Securities Settlement Risk Fund should not be less than 30 billion yuan. Settlement institutions should regularly conduct dynamic evaluations and demonstrations to determine the required size.

On November 7th, the China Securities Regulatory Commission issued Announcement No. 20, announcing the "Administrative Measures for Securities Settlement Risk Fund Management", which will be implemented starting from December 8, 2025. The Measures state that the securities settlement risk fund (hereinafter referred to as "the Fund") is a special fund established to advance or compensate for losses incurred by securities registration and settlement institutions due to default in settlement, technical malfunctions, operational errors, or force majeure events. The Measures specify that the net assets of the Fund shall not be less than thirty billion yuan. Securities registration and settlement institutions should regularly assess and verify the necessary scale of the Fund based on market development and risk control needs, and report to the China Securities Regulatory Commission and the Ministry of Finance. The China Securities Regulatory Commission and the Ministry of Finance may adjust the scale, fund extraction and payment methods, ratios, etc. of the Fund according to market risk conditions. The original text states: Administrative Measures for Securities Settlement Risk Fund Management Article 1 In order to prevent and resolve risks in the securities market, ensure the safe operation of the securities registration and settlement system, and properly manage and use the securities settlement risk fund, these measures are formulated in accordance with the relevant provisions of the Securities Law of the People's Republic of China and the Administrative Measures for Securities Registration and Settlement. Article 2 The term "securities settlement risk fund" referred to in these measures (hereinafter referred to as "the Fund") refers to a special fund established to advance or compensate for losses incurred by securities registration and settlement institutions due to default in settlement, technical malfunctions, operational errors, or force majeure events. Article 3 Fund Sources: (1) Extracting nine percent from the business income and revenue of securities registration and settlement institutions; (2) For securities transactions adopting a multilateral net guarantee settlement method, settlement participants shall pay daily according to the following standards: 1. For equity products, nine millionths of the transaction amount; 2. For fixed income products, three millionths of the transaction amount; 3. For pledged repurchase transactions, as follows: five millionths for 1-day repurchase amount, ten millionths for 2-day repurchase amount, fifteen millionths for 3-day repurchase amount, twenty millionths for 4-day repurchase amount, fifty millionths for 7-day repurchase amount, one in ten thousand for 14-day repurchase amount, two in ten thousand for 28-day repurchase amount, six in ten thousand for 91-day repurchase amount, twelve in ten thousand for 182-day repurchase amount. Article 4 The total net assets of the Fund shall be no less than thirty billion yuan. At the end of each fiscal year, if the net assets of the Fund reach or exceed thirty billion yuan, in the next fiscal year, securities registration and settlement institutions shall no longer extract funds according to the provisions of Article 3(1) of these measures, and settlement participants who have paid into the Fund for a full year shall no longer pay according to the provisions of Article 3(2). For new settlement participants joining the settlement system, they shall pay into the Fund according to the provisions of Article 3(2) of these measures after joining the settlement system, and the payment period shall not be less than one year. At the end of each fiscal year, if the total net assets of the Fund are less than thirty billion yuan, the Fund shall continue to be extracted and paid into in the next fiscal year. Article 5 Securities registration and settlement institutions should regularly assess and verify the necessary scale of the Fund based on market development and risk control needs, and report to the China Securities Regulatory Commission and the Ministry of Finance. The China Securities Regulatory Commission and the Ministry of Finance may adjust the scale of the Fund, fund extraction and payment methods, ratios, etc. according to market risk conditions. Article 6 Securities registration and settlement institutions are responsible for the daily management and use of the Fund. Article 7 The management of the Fund should follow the principles of safety and soundness, ensuring the safety and liquidity of the Fund. The funds of the Fund shall be used for bank deposits, purchasing key term government bonds, and other forms of fund utilization approved by the China Securities Regulatory Commission and the Ministry of Finance. Securities registration and settlement institutions shall select state-owned commercial banks as the deposit banks of the Fund through competitive or inquiry methods. The balance of the Fund in the bank account shall not be less than seventy percent of the total net assets of the Fund at the end of the previous month. Article 8 The assets of the Fund shall be accounted for separately from the assets of securities registration and settlement institutions, and securities registration and settlement institutions shall keep proper records and perform regular reconciliations. All income (including interest) generated from the utilization of the Fund shall belong to the Fund. Article 9 The minimum payment limit of the Fund is twenty million yuan. Securities registration and settlement institutions should establish procedures for using the Fund. After using the Fund as per regulations, securities registration and settlement institutions should promptly report to the China Securities Regulatory Commission and the Ministry of Finance. Article 10 When the situations listed in Article 2 arise due to default by settlement participants, the Fund shall be utilized in the following order: (1) Funds paid by default settlement participants as per the provisions of Article 3(2) of these measures; (2) Funds paid by other settlement participants as per the provisions of Article 3(2) of these measures; (3) Funds extracted as per the provisions of Article 3(1) of these measures. Article 11 Securities registration and settlement institutions should establish and improve business rules, internal management systems, and settlement participant management systems in accordance with relevant laws, administrative regulations, and departmental rules, to minimize the occurrence of risk incidents. Settlement participants should strictly adhere to relevant laws, administrative regulations, and departmental rules, establish sound risk prevention systems, internal control systems, risk contingency plans, and investor suitability management systems, and establish settlement business-related technical systems, business continuity management, and disaster recovery mechanisms that meet the requirements of the China Securities Regulatory Commission and securities registration and settlement institutions, effectively preventing risks. Article 12 After the Fund is used to advance or compensate for default settlement losses, securities registration and settlement institutions should take measures such as disposing of default-related assets, guaranty assets, filing civil lawsuits, and declaring bankruptcy claims to recover from relevant responsible parties, with the recovered funds transferred back to the Fund. Securities registration and settlement institutions should establish a recovery work management system to ensure timely and effective recovery. In the case of using the Fund due to technical malfunctions or operational errors, securities registration and settlement institutions should establish corresponding systems, clarify the recovery procedures for the parties responsible for the technical malfunctions or operational errors, the compensation mechanism for the Fund, and the accountability system. Using the Fund does not affect the priority rights of securities registration and settlement institutions over the settlement property of default settlement participants. Article 13 When making appropriate changes or liquidations to the Fund, the China Securities Regulatory Commission and the Ministry of Finance shall separately determine the proportion and amount of remaining assets of the Fund to be returned to relevant settlement participants and securities registration and settlement institutions. Article 14 The financial accounting and management methods of the Fund shall be determined by the Ministry of Finance. Article 15 Securities registration and settlement institutions should establish internal management systems for the Fund in accordance with the provisions of these measures, clarify matters such as the calculation, management, and utilization of the Fund. Securities registration and settlement institutions should record and retain information on the calculation, management, and utilization of the Fund, and within six months after the end of each fiscal year, submit an annual report to the China Securities Regulatory Commission and the Ministry of Finance. Article 16 These measures shall be interpreted by the China Securities Regulatory Commission and the Ministry of Finance. Article 17 These measures shall be implemented as of December 8, 2025. The "Administrative Measures for Securities Settlement Risk Fund Management" issued by the China Securities Regulatory Commission and the Ministry of Finance on June 16, 2006 (CSRC Letter [2006] No. 65) shall be abolished. This article is compiled from the official website of the China Securities Regulatory Commission. Editor: Feng Qiuyi.