CSRC approved Shen Gang Securities to establish a subsidiary to engage in private equity fund business.

Recently, the China Securities Regulatory Commission issued a reply approving Shen Gang Securities to establish a subsidiary to engage in private equity fund business. The CSRC requires Shen Gang Securities to complete the establishment of the subsidiary in accordance with the law, including staffing, systems, and premises. Shen Gang Securities is not allowed to actually conduct business until the establishment of the subsidiary has passed an on-site inspection by the local CSRC. The CSRC also stated that Shen Gang Securities must effectively fulfill the parent company's control responsibilities, strengthen compliance management and risk control of the subsidiary, and implement measures to prevent conflicts of interest and risks of interest transmission with the subsidiary, urging the subsidiary to operate prudently and lawfully. Any major issues that occur during the operation of the subsidiary should be promptly reported to the local CSRC.