Legal basis: Measures for the Administration of Fund Companies
Article 3 The rights and obligations of fund managers, fund custodians and fund share holders shall be stipulated in the fund contract in accordance with this Law. Fund managers and fund custodians shall perform their fiduciary duties in accordance with this Law and the provisions of fund contracts. Fund share holders enjoy income and bear risks according to their fund shares.
Article 5 A fund contract shall stipulate the mode of fund operation. The fund operation mode can be closed, open or other ways. Closed-end fund (hereinafter referred to as closed-end fund) refers to a fund with a fixed total fund share approved within the term of the fund contract, and the fund share can be traded on a legally established stock exchange, but the fund share holder may not apply for redemption. An open-ended fund (hereinafter referred to as an open-ended fund) refers to a fund whose total share is not fixed and can be purchased or redeemed at the time and place agreed in the fund contract. Measures for the sale, trading, subscription and redemption of fund shares of funds with other modes of operation shall be formulated separately by the State Council.
Article 9 Fund managers and fund custodians shall fulfill their duties and fulfill their obligations of honesty, credibility, prudence and diligence in managing and using fund assets. Fund practitioners shall obtain the qualification of fund practice according to law, abide by laws and administrative regulations, and abide by professional ethics and code of conduct.
Article 11 the State Council Securities Regulatory Authority shall supervise and manage the activities of securities investment funds according to law.