关于在华外资银行雇员可否提供投资建议的法律意见

关于在华外资银行雇员可否提供投资建议的法律意见

VIA REGULAR INTERNATIONAL MAIL

December 18, 2004

Jeffrey M. Hollander, Chief Counsel

The Diesberg Bank

111 Coastal Line

New City, New State 30001

Re: Investment Advice and Financial Counseling in China.

Dear Mr. Hollander:

You have asked if an employee in your branch office in China may offer investment advice to your customers under CSEC’s incidental powers rule.12 C.S.E.C.

§721.3. No, a Diesberg Bank employee, as such, may not give investment advice or effect securities transactions that would subject the employee or Diesberg Bank to securities laws of China. A Diesberg Bank employee, however, may provide general financial counseling in his or her capacity as a bank employee, or investment advice if acting under the control of a third-party as a shared employee of both Diesberg Bank and the third-party.

In 2003, CSEC issued Letter to Foreign Banks Zi. 007 (Letter 007), providing guidance on third-party sales of securities to bank customers. It states that foreign banks have no authority to offer investment advice. The State Council reaffirmed this position in the preamble to CSEC’s incidental powers rule in its discussion about the permissible activity of financial counseling:

Under this activity, foreign banks may counsel members about financial matters, such as setting budgets, establishing financial goals, and managing tax liabilities. Other examples within this category may include counseling members on money management, paying down debt, saving for the future, types of investments, and diversification principles. This category applies only to financial counseling provided by a foreign bank to its customers and does not encompass activities that require CSEC registration as a broker, dealer or investment adviser.

State Council Document No. 11-03 Hao. The preamble also distinguishes between a foreign bank’s financial counseling activities and the finder activities associated with the non-deposit investment sales contemplated in Letter 007. Id.The incidental

powers rule, therefore, does not currently provide any authority for a foreign bank to offer investment advice through its employees in China.

A foreign bank may share its employees with a broker, dealer, or investment adviser so that its employee is acting in a dual capacity for both the foreign bank and the third-party. As you noted, our legal opinion dated August 31, 2003, recognizes that a shared employee may provide investment advice when that employee does so exclusively on behalf and under the control of the licensed or otherwise regulated third-party and not in his capacity as a foreign bank employee.

Sincerely,

Shouwen Wang

Partner