CSC Financial Co., Ltd.

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional advisor.

If you have sold or transferred all your shares in CSC Financial Co., Ltd ., you should at once hand this circular together with the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

==> picture [337 x 60] intentionally omitted <==

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 6066)

( 1) PROPOSED AMENDMENTS TO

THE ARTICLES OF ASSOCIATION, RULES OF PROCEDURES FOR BOARD MEETINGS AND RULES OF PROCEDURES FOR SUPERVISORY COMMITTEE MEETINGS

(2) PROPOSED GENERAL MANDATE TO CONTINUE ISSUING MEDIUM AND LONG-TERM DEBT FINANCING INSTRUMENTS

(3) ELECTION OF NON-EXECUTIVE DIRECTORS

(4) REPORT ON THE USE OF CAPITAL PREVIOUSLY RAISED

(5) PROPOSED ADJUSTMENT TO THE ALLOWANCE OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS

(6) NOTICE OF THE 2017 SECOND EXTRAORDINARY GENERAL MEETING

A letter from the Board is set out on pages 1 to 12 of this circular. Please refer to pages 31 to 34 of this circular for the notice convening the Extraordinary General Meeting.

Please complete and return the applicable reply as soon as possible in accordance with the instructions on the applicable return if you would like to attend the Extraordinary General Meeting, but in any event no later than Tuesday, November 21, 2017.

Please complete and return the applicable proxy form in accordance with the instructions printed thereon, if the Shareholders are to appoint a proxy to attend the Extraordinary General Meeting.

For H Shareholders, the proxy form and any authorization instruments should be returned to Computershare Hong Kong Investor Services Limited (whose address is at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong) as soon as possible, but in any event not less than 24 hours before the time appointed for holding the Extraordinary General Meeting (i.e. 9:00 a.m. on Sunday, December 10, 2017). For the Domestic Shareholders, the proxy form and any authorization instruments should be returned to the Company’s board office in the PRC (whose address is at 8/F, Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue, Dongcheng District, Beijing, PRC) as soon as possible, but in any event not less than 24 hours before the time appointed for holding the Extraordinary General Meeting (i.e. 9:00 a.m. on Sunday, December 10, 2017). Completion and return of the form of proxy will not preclude you from attending and voting in person at the Extraordinary General Meeting or at any adjourned meetings should you so wish.

October 26, 2017

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
II. BUSINESS TO BE CONSIDERED AT THE EXTRAORDINARY
GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
III. RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
IV. EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
V. VOTING BY POLL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
VI. RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO
THE ARTICLES OF ASSOCIATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
APPENDIX II COMPARISON TABLE ON THE AMENDMENTS TO
THE RULES OF PROCEDURES FOR BOARD MEETINGS. . . . . . . . . . .	25
APPENDIX III COMPARISON TABLE ON THE AMENDMENTS TO
THE RULES OF PROCEDURES FOR
SUPERVISORY COMMITTEE MEETINGS. . . . . . . . . . . . . . . . . . . . . . . .	26
APPENDIX IV BIOGRAPHICAL DETAILS OF CANDIDATES OF
NON-EXECUTIVE DIRECTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
APPENDIX V REPORT ON THE USE OF CAPITAL PREVIOUSLY RAISED. . . . . . . . .	28
NOTICE OF THE 2017 SECOND EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . .	31

Note: In the event of any discrepancy between the English and Chinese versions of this circular, the Chinese version shall prevail.

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

“Articles of Association”	the articles of association of the Company, as amended from time to time
“Board” or	the board of Directors of the Company
“Board of Directors”
“China Securities Capital”	China Capital Management Limited (中信建投資本管理有限公司)
“China Securities Funds”	China Securities Funds Management Limited (中信建投基金管理有限公
	司)
“Company”	CSC Financial Co., Ltd. (中信建投証券股份有限公司), a joint stock
	company incorporated in the People’s Republic of China with limited
	liability, the H Shares of which have been listed and traded on the main
	board of the Hong Kong Stock Exchange (stock code: 6066)
“CSRC”	China Securities Regulatory Commission
“Director(s)”	the director(s) of the Company
“Domestic Share(s)”	the ordinary shares of RMB1.00 each issued by the Company in the PRC,
	which are subscribed for and fully paid in RMB
“Domestic Shareholders”	holders of Domestic Shares
“EGM” or “Extraordinary	the extraordinary general meeting of the Company to be held at 9
General Meeting”	a.m. on Monday, December 11, 2017 at Multi-function Hall, B1/F,
	Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue,
	Dongcheng District, Beijing, PRC
“Guidelines”	Guidelines for Implementation of Compliance Management on Securities
	Companies (《證券公司合規管理實施指引》)
“H Share(s)”	overseas listed foreign invested ordinary shares of RMB1.00 each in the
	share capital of the Company which are listed and traded on the Hong
	Kong Stock Exchange, and traded in Hong Kong dollars
“H Shareholders”	holders of H Shares

– ii –

DEFINITIONS

“HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC

“Hong Kong Listing Rules” or the Rules Governing the Listing of Securities on the Stock Exchange of “Listing Rules” Hong Kong Limited, as amended from time to time

“Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited or “Stock Exchange”
“Independent Non-executive the independent non-executive director(s) of the Company Director(s)” or “Independent Director(s)”
“Measures” Measures for Compliance Management of Securities Companies and Securities Investment Fund Management Companies (《證券公司和證券投資基金管理公司合規管理辦法》)
“Non-executive Director(s)” non-executive director(s) of the Company

“PRC” or “China” the People’s Republic of China, for the purpose of this circular, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan “RMB” or “Renminbi” Renminbi, the lawful currency of the PRC

“Rules of Procedures for Board the rules of procedures for meetings of the Board of Directors of the Meetings” Company
“Rules of Procedures for the rules of procedures for meetings of the Supervisory Committee of the Supervisory Committee Company Meetings”
“Shareholder(s)” the shareholder(s) of the Company “Supervisor(s)” the supervisor(s) of the Company “Supervisory Committee” the supervisory committee of the Company “%” percentage

– iii –

LETTER FROM THE BOARD

==> picture [337 x 60] intentionally omitted <==

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 6066)

Mr. Wang Changqing (Chairman, Executive Director)
Mr. Yu Zhongfu (Vice Chairman, Non-executive Director) Ms. Hu Donghui (Vice Chairman, Non-executive Director)
Mr. Qi Liang (Executive Director)
Mr. Wang Chenyang (Non-executive Director)

Registered office in the PRC: Unit 4, No. 66 Anli Road Chaoyang District Beijing PRC

Mr. Wang Shouye (Non-executive Director)
Mr. Liu Dingping (Non-executive Director)
Ms. Wang Shumin (Non-executive Director)
Mr. Xu Gang (Non-executive Director)
Mr. Feng Genfu (Independent Non-executive Director)
Ms. Zhu Shengqin (Independent Non-executive Director)

Principal place of business in the PRC: No.188 Chaonei Avenue Dongcheng District Beijing PRC

Mr. Dai Deming (Independent Non-executive Director)
Mr. Bai Jianjun (Independent Non-executive Director)
Mr. Liu Qiao (Independent Non-executive Director)

Principal place of business in Hong Kong: 18/F, Two Exchange Square, Central, Hong Kong

October 26, 2017

To the Shareholders:

Dear Sir or Madam,

(1) PROPOSED AMENDMENTS TO

THE ARTICLES OF ASSOCIATION, RULES OF PROCEDURES FOR BOARD MEETINGS AND RULES OF PROCEDURES FOR SUPERVISORY COMMITTEE MEETINGS

(2) PROPOSED GENERAL MANDATE TO CONTINUE ISSUING MEDIUM AND LONG-TERM DEBT FINANCING INSTRUMENTS

(3) ELECTION OF NON-EXECUTIVE DIRECTORS

(4) REPORT ON THE USE OF CAPITAL PREVIOUSLY RAISED (5) PROPOSED ADJUSTMENT TO THE ALLOWANCE OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS
(6) NOTICE OF THE 2017 SECOND EXTRAORDINARY GENERAL MEETING

– 1 –

LETTER FROM THE BOARD

I. INTRODUCTION

Reference is made to the announcement of the Company dated October 18, 2017 in relation to proposed amendments to the Articles of Association, proposed change in directors, proposed general mandate to continue issuing medium and long-term debt financing instruments and convening of the 2017 second extraordinary general meeting. On behalf of the Board, I would like to invite you to attend the EGM to be held at 9 a.m. on Monday, December 11, 2017 at Multi-function Hall, B1/F, Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue, Dongcheng District, Beijing, PRC.

II. BUSINESS TO BE CONSIDERED AT THE EXTRAORDINARY GENERAL MEETING

Resolutions will be proposed at the EGM to approve: (1) proposed amendments to the Articles of Association, Rules of Procedures for Board Meetings and Rules of Procedures for Supervisory Committee Meetings; (2) proposed general mandate to continue issuing medium and long-term debt financing instruments; (3) election of Non-executive Directors; (4) report on the use of capital previously raised; and (5) proposed adjustment to the allowance of the Independent Non-executive Directors.

The above resolutions (1) and (2) are subject to the approval by the Shareholders at the EGM by way of special resolutions, while the above resolutions (3) to (5) are subject to approval by the Shareholders at the EGM by way of ordinary resolutions.

The purpose of this circular is to provide you with the information on the above resolutions (1) to (5) to enable you to vote for or against the proposed resolutions at the EGM under fully informed condition.

1. Proposed Amendments to the Articles of Association, Rules of Procedures for Board Meetings and Rules of Procedures for Supervisory Committee Meetings

Pursuant to the Measures issued by the CSRC on June 6, 2017, the Guidelines issued by the Securities Association of China on September 8, 2017 and regulatory requirements, the Board resolved to make amendments to the Articles of Association and to amend the relevant articles of the Rules of Procedures for Board Meetings and the Rules of Procedures for Supervisory Committee Meetings accordingly. Please refer to Appendix I, Appendix II and Appendix III of this circular for specific details of the amendments to such articles. The Articles of Association, the Rules of Procedures for Board Meetings and the Rules of Procedures for Supervisory Committee Meetings are prepared in Chinese with no official English version. Any English translation is for reference only. In the event of any inconsistency, the Chinese version shall prevail.

– 2 –

LETTER FROM THE BOARD

The above resolution on proposed amendments to the Articles of Association and the Rules of Procedures for Board Meetings has been approved by the Directors at the Board meeting and the resolution on proposed amendments to the Rules of Procedures for Supervisory Committee Meetings has been approved by the Supervisors at the meeting of the Supervisory Committee. It is hereby proposed at the EGM for consideration and approval by the Shareholders.

2. Proposed General Mandate to Continue Issuing Medium and Long-term Debt Financing Instruments

With the gradual maturity of the Company’s medium and long-term liabilities and the expansion of the size of its asset business, the Company’s demand for long-term stable capital will increase continuously. In order to support the normal commencement of the Company’s business, as well as to ensure continuous compliance with regulatory indicators, the Company is in need of multiple issuances of medium and long-term debt financing instruments in due course. In view of this, the Board has considered and approved the proposal in relation to the Company’s general mandate to continue issuing medium and longterm debt financing instruments.

Given that the specific arrangements, proposal and terms of the medium and long-term debt financing instruments to be issued upon authorization are closely associated with the market conditions and the capital needs of the Company, for efficiency, at this stage, the following matters will be proposed for consideration at the EGM:

To approve the issuance of medium and long-term debt financing instruments of the Company on a one-off or multiple issuances or multi-tranche issuances basis, and to approve the following general proposal on the issuance of medium and long-term debt financing instruments of the Company:

A. Issuer, Issue Size and Issue Method

The Company will act as the issuer of the Company’s medium and long-term debt financing instruments. The debt financing instruments shall be issued on a one-off or multiple issuances or multi-tranche issuances basis through public offering to public investors or qualified investors upon review and approval by or filing with the CSRC and other relevant regulatory institutions and selfregulatory organization of the securities industry or through private placement to qualified investors in accordance with relevant requirements of the CSRC and other relevant regulatory institutions and self-regulatory organizations of the securities industry.

– 3 –

LETTER FROM THE BOARD

The aggregate size of the medium and long-term debt financing instruments to be issued upon authorization shall not exceed RMB20 billion and shall be in compliance with the requirements prescribed in the relevant laws and regulations on the maximum amount of the specific debt financing instruments to be issued.

B. Type of Issue

The medium and long-term debt financing instruments to be issued upon authorization include, but are not limited to, corporate bonds, subordinated bonds, subordinated debts, asset-backed securities and structured notes and other types permitted to be issued by the Company as approved or permitted by or filed with the CSRC and other relevant regulatory institutions and selfregulatory organizations of the securities industry.

C. Term of Issue

The term of the medium and long-term debt financing instruments to be issued upon authorization shall be over one year (exclusive) and no longer than 10 years (inclusive). It may have single or multiple maturities.

D. Interest Rate of Issue

The interest rate of the medium and long-term debt financing instruments to be issued upon authorization and the method of calculation and payment thereof will be determined by the Company in accordance with the then prevailing market conditions at the time of issuance and relevant requirements.

E. Issue Price

The issue price of the medium and long-term debt financing instruments to be issued upon authorization will be determined by the Company in accordance with the then prevailing market conditions at the time of each issuance and requirements of relevant laws and regulations.

F. Security and Other Credit Enhancement Arrangements

The security and other credit enhancement arrangements of the medium and long-term debt financing instruments to be issued upon authorization will be determined by the Company based on the features of the debt financing instruments and the needs of each issuance.

– 4 –

LETTER FROM THE BOARD

G. Use of Proceeds

The proceeds raised from the medium and long-term debt financing instruments to be issued upon authorization shall be used to fund the business operation needs of the Company, improve the debt structure of the Company, supplement working capital of the Company and/or fund project investments. Specific use of proceeds raised and the detailed proposal for the use of proceeds raised and the research report on feasibility of the projects and other documents will be determined by the Company in accordance with the capital needs.

H. Issue Target and Arrangements on Placement to Shareholders

The issue target of the medium and long-term debt financing instruments to be issued upon authorization shall be onshore investors who meet the conditions for subscription. The details of the issue target will be determined by the Company in accordance with requirements of relevant laws and regulations, the then prevailing market conditions and matters in connection with the issuance.

The medium and long-term debt financing instruments to be issued upon authorization may be placed to the Shareholders of the Company. Details of the placement arrangements (including whether to make such placement and the proportion of placement, etc.) will be determined by the Company in accordance with the then prevailing market conditions and matters in connection with the issuance.

I. Listing Arrangements

Relevant matters in connection with the application for listing or transfer of the medium and long-term debt financing instruments to be issued upon authorization will be determined by the Company in accordance with the actual conditions of the Company and the then prevailing market conditions.

J. Safeguard Measures for Repayment

The following measures shall be implemented by the Company in the event that it is expected that the Company will be unable to repay the principal and interests of the medium and long-term debt financing instruments to be issued as scheduled, or the Company shall fail to repay the principal and interests of the debt financing instruments when they become due:

– 5 –

LETTER FROM THE BOARD

(1) no dividend shall be distributed to the Shareholders;
(2) suspension of the implementation of projects that incur capital expenditure such as material external investments, acquisitions and mergers;
(3) payment of salary and bonus of the directors and senior management of the Company shall be adjusted, reduced or ceased;
(4) key responsible personnel accountable for such event shall not be allowed for re-designation.

K. Extension and Change in Interest Rate

The arrangements in respect of the specific extension and change in the interest rate of subordinated bonds and subordinated debts among the medium and long-term debt financing instruments to be issued upon authorization will be determined by the Company in accordance with relevant laws and regulations, the then prevailing market conditions and matters in connection with the issuance.

To approve the validity period of the general mandate to be granted by the general meeting in respect of the issuance of medium and long-term debt financing instruments, which is effective from the date on which it is approved at the general meeting until November 23, 2018. If the approval, filing or permission of relevant regulatory institutions and self-regulatory organizations of the securities industry in respect of the issuance of medium and long-term debt financing instruments is obtained within the validity period of the general mandate, the Company may issue the medium and long-term debt financing instruments on a one-off or multiple issuances or multi-tranche issuances basis within the validity period of such approval, filing or permission.

– 6 –

LETTER FROM THE BOARD

To approve the authorization of the Board, which in turn authorizes the management, to deal with matters in relation to the issuance of medium and long-term debt financing instruments in accordance with requirements of relevant laws, regulations, regulatory documents and the Articles of Association, based on market conditions and the capital needs of the Company and adhering to the principle of maximizing the interest of the Company. Details include:
(1) formulating, adjusting and implementing the details of the proposal for the issuance of medium and long-term debt financing instruments in accordance with the applicable laws, regulations and relevant requirements of relevant regulatory institutions and self-regulatory organizations of the securities industry as well as resolutions passed at the general meeting and Board meeting of the Company, and based on the requirements of the business development of the Company and the specific conditions of the relevant debt market, including without limitation, the determination of suitable timing of issue, type of issue, details of issue size and method, terms of issue, issue targets, maturity of issue, whether to issue on a one-off, multiple issuances, multi-tranche issuances or multiple-category issuances basis and, for each issuance, tranche or category, the arrangement in respect of the issue size and term, the nominal value, the methods in which the interest rate is determined, pricing method, issuance arrangements, terms and methods of repayment of the principal and the interests, whether to extend and make adjustments to the interest rate and their methods, credit enhancement arrangements including letter of guarantee/ letter of support, rating arrangement, details of subscription method, whether to incorporate terms of repurchase or redemption, whether to set the issuer’s option for upward change in the interest rate and the investors’ option to sell back, details of placement arrangements, use of proceeds, registration, listing or transfer and place of trading, measures to mitigate repayment risks, measures to ensure debt repayment (if applicable), and all specific matters in connection with the issuance of debt financing instruments of the Company;
(2) determining and undertaking relevant matters in relation to the application, approval, filing, registration, listing or transfer, redemption, custody and settlement of issuance of medium and long-term debt financing instruments to relevant regulatory authorities and self-regulatory organizations of the securities industry, including without limitation, preparing, revising and submitting relevant application and filing materials relating to the issuance and listing (or transfer) of debt financing instruments and application and filing materials in respect of credit enhancement agreements such as guarantee or letter of

– 7 –

LETTER FROM THE BOARD

support to be provided by the issuer(s) and/or third party(ies), in accordance with the requirements of relevant regulatory institutions and self-regulatory organizations of the securities industry, and signing the relevant application and filing documents and other legal documents;

(3) determining and engaging relevant intermediary agencies (if applicable), such as lead underwriter, accounting firm, credit rating agency and law firm, signing, implementing, amending and completing all agreements and documents relating to the issuance of medium and long-term debt financing instruments, including without limitation, the underwriting agreement, credit enhancement agreements such as guarantee agreement or letter of support, bond indenture, engagement letter with intermediary agency, trustee management agreement, settlement management agreement, registration and custody agreement, listing or transfer agreement and other legal documents, etc., and disclosing the relevant information in accordance with the relevant laws, regulations and the listing and transfer rules of the securities markets on which the Company’s securities are listed (including without limitation, the preliminary and final offering memoranda of the debt financing instruments, and all announcements and circulars in relation to the issuance of medium and long-term debt financing instruments of the Company, etc.);
(4) selecting and engaging trustee manager(s) and settlement manager(s) for the issuance of medium and long-term debt financing instruments, entering into the trustee management agreement(s) and settlement management agreement(s) and (if applicable) formulating rules for meetings of the holders of the debt financing instruments;
(5) making relevant adjustments to matters relating to the issuance of medium and long-term debt financing instruments in accordance with the advice of the relevant regulatory institutions and self-regulatory organizations of the securities industry, changes in their policies or the changes in market conditions, or determining whether to continue with all or part of the work in respect of the issuance of medium and long-term debt financing instruments in accordance with the actual conditions, unless re-approval by the Shareholders at general meeting is otherwise required pursuant to relevant laws, regulations and the Articles of Association; and
(6) dealing with other relevant matters in connection with the application and issuance of medium and long-term debt financing instruments.

– 8 –

LETTER FROM THE BOARD

The issuance of debt financing instruments of the Company is subject to approval by the Shareholders at the general meeting of the Company and the approval by relevant government authorities and regulatory authorities in the PRC. Shareholders and potential investors of the Company should exercise caution when dealing in the shares and other securities of the Company.

3. Election of Non-Executive Directors

Due to personal work arrangements, Mr. Liu Dingping (“ Mr. Liu ”) has resigned from his positions as a Non-executive Director, a member of the Remuneration and the Nomination Committee of the Board and a member of the Risk Management Committee of the Board, and Ms. Wang Shumin (“ Ms. Wang ”) has resigned from her positions as a Non-executive Director, a member of the Development Strategy Committee of the Board and a member of the Audit Committee of the Board. The resignations are effective from the date on which the EGM is convened. Mr. Liu and Ms. Wang have confirmed that they have no disagreements with the Board during their term of office and there are no other matters in relation to their resignations that need to be brought to the attention of the Shareholders.

On October 18, 2017, Mr. Dong Shi (“ Mr. Dong ”) and Mr. Wang Hao (“ Mr. Wang ”) have been nominated by the Board as candidates of the non-executive directors of the Company. Mr. Dong and Mr. Wang shall officially assume the office from the date on which the resolutions on their appointments are considered and approved at the EGM and their directorship qualifications are approved by China securities regulatory institutions, and their terms of office shall end on the date on which the term of the first session of the Board is expired. Mr. Dong and Mr. Wang will not receive any directors’ fee from the Company as Non-executive Directors.

Biographical details of Mr. Dong and Mr. Wang are set out in Appendix IV to this circular. Save as disclosed in Appendix IV, Mr. Dong and Mr. Wang have confirmed that (i) they did not hold directorship in other listed companies nor any position of the Company or its subsidiaries for the last three years; (ii) they do not have any relationship with any directors, supervisors, senior management or substantial or controlling shareholders of the Company; and (iii) they do not have any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Save as disclosed in this circular, there is no other information required to be disclosed pursuant to the requirements set out in Rules 13.51(2)(h) to (v) of the Listing Rules, nor are there other matters regarding the appointment of Mr. Dong and Mr. Wang as Non-executive Directors which need to be brought to the attention of the Shareholders.

– 9 –

LETTER FROM THE BOARD

The above resolution has been approved by the Directors at the Board meeting and is hereby proposed at the EGM for consideration and approval by the Shareholders. Upon approval of the appointment of Mr. Dong and Mr. Wang at the EGM, the Company will enter into appointment letters with Mr. Dong and Mr. Wang.

4. Report on the Use of Capital Previously Raised

After an inspection on the use of capital previously raised, the Company prepared a report on the use of capital previously raised as of June 30, 2017. Please refer to Appendix V of this circular for details of information of the report on the use of capital previously raised.

The above report has been approved by the Directors at the Board meeting and is hereby proposed at the EGM for consideration and approval by the Shareholders.

5. Proposed Adjustment of the Allowance of the Independent Non-executive Directors

Since the establishment of the Company, successive Independent Non-executive Directors have been in strict compliance with the requirements of laws and regulations and the Articles of Association by spending substantial time and effort in performing their duties, making full use of their professional advantages to independently participate in various decision makings with caution, effectively safeguarding the overall interests of the Company and continuously making contribution to the sustained and healthy development of the Company. Currently, the standard for allowance of the Independent Non-executive Directors is RMB120,000 (tax inclusive) per annum.

With improving corporate governance and diversifying operational system, in particular after the listing of H shares and the preparation of listing of A shares of the Company, there has been significant increases in the workload, complexity of duties and the resulting responsibilities to serve as Independent Non-executive Directors. To better match the allowance with the responsibilities of corresponding Independent Non-executive Directors, to safeguard the interest of the Company as a whole and to ensure the legitimate rights and interests of the Shareholders as a whole, in particular the minority Shareholders, the Company intends to make adjustments to the standard for allowance of the Independent Non-executive Directors in accordance with industry standards.

The following adjustments to the allowance standard of the Independent Non-executive Directors have been considered and approved by the Board:

(1) the standard for basic allowance of the Independent Non-executive Directors will be adjusted to RMB180,000 (tax inclusive) per annum, and additional allowance of RMB5,000 (tax inclusive) per person per meeting will be paid to the Independent Non-executive Directors who attend the Board meeting in person;

– 10 –

LETTER FROM THE BOARD

(2) the adjusted standard for allowance of the Independent Non-executive Directors shall apply from June 2017 and take effect from the date of the Extraordinary General Meeting at which the resolution will be considered and passed.

The resolution is hereby proposed at the Extraordinary General Meeting for consideration and approval by the Shareholders.

III. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Hong Kong Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable inquiries, confirm that, as far as they are aware and are satisfied that the information contained in this circular is accurate and complete in all material respects, and there is no misleading or fraudulent material and no omission of any of the information contained in this circular or other matters which are misleading.

IV. EXTRAORDINARY GENERAL MEETING

The Extraordinary General Meeting will be held on Monday, December 11, 2017 at Multi-function Hall, B1/F, Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue, Dongcheng District, Beijing, PRC. The notice of the meeting is set out on pages 31 to 34 of this circular.

A form of proxy to be used at the Extraordinary General Meeting is enclosed. If you intend to appoint a proxy to attend the Extraordinary General Meeting, please complete and return the enclosed proxy form in accordance with the instructions printed thereon. For H Shareholders, the proxy form or any other authorization documents should be returned to the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, whereas holders of Domestic Shares should return the proxy form to the Company’s Board office, in person or by post no later than 24 hours before the time appointed for convening the EGM or any adjourned meeting thereof. Completion and return of the proxy form will not preclude you from attending and voting at the EGM or at any adjourned meeting if you so wish.

If you intend to attend the Extraordinary General Meeting in person or by proxy, you are required to return the completed and signed reply slip to the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited (for H Shareholders), or to the Company’s Board office (for holders of Domestic Shares), on or before Tuesday, November 21, 2017 in person, by mail or by fax.

– 11 –

LETTER FROM THE BOARD

The location of the Company’s Board office is 8/F, Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue, Dongcheng District, Beijing, PRC (Telephone: (86) 10 8513 0716, Fax: (86) 10 6518 6399). Computershare Hong Kong Investor Services Limited, the Company’s H Share registrar, is located at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (Telephone: (852) 2862 8555, Fax: (852) 2865 0990).

In order to determine the list of Shareholders who are entitled to attend the Extraordinary General Meeting, the Company will close the register of members of H Shares during the period from Saturday, November 11, 2017 to Monday, December 11, 2017 (both days inclusive), during which no registration of Shares will be made. Shareholders who wish to attend the Extraordinary General Meeting are required to send all the transfer documents together with the relevant Shares to Computershare Hong Kong Investor Services Limited (for H Shareholders) or the office of the Board (for Domestic Shareholders) to register before 4:30 p.m. on Friday, November 10, 2017. At the end of the above business hours, H Shareholders and Domestic Shareholders registered in Computershare Hong Kong Investor Services Limited or the office of the Board (if applicable) are entitled to attend the Extraordinary General Meeting.

V. VOTING BY POLL

In accordance with rule 13.39(4) of the Hong Kong Listing Rules, any vote made by the Shareholders at a Shareholders’ general meeting shall be conducted by way of poll. Accordingly, the resolutions proposed at the Extraordinary General Meeting will be voted by way of poll.

VI. RECOMMENDATIONS

The Directors consider that all resolutions proposed above are in the interests of the Company and the Shareholders as a whole. The Directors therefore recommend the Shareholders to vote in favour of all the resolutions to be submitted at the Extraordinary General Meeting.

By order of the Board CSC Financial Co., Ltd. Wang Changqing Chairman

Beijing, the PRC October 26, 2017

– 12 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Comparison Table on the Amendments to the Articles of Association of

Notes:

(1) In the column of Reasons for the Amendments in this comparison table:

The “ Measures ” refers to the Measures for Compliance Management of Securities Companies and Securities Investment Fund Management Companies (Order No. 133 of China Securities Regulatory Commission) promulgated by the CSRC.

The “ Guidelines ” refers to the Guidelines for Implementation of Compliance Management of Securities Companies (No. 208 [2017] of the Securities Association of China) promulgated by the Securities Association of China.

(2) The renumbering of articles and the changes to the cross references resulting from the amendments are not contained in this comparison table.

Numbering and Contents of the Articles Before Amendments	Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Article 145The Board of Directors shall exercise the following powers and duties: (1) to convene a general meeting and submit work report to such meeting; (2) to implement the resolutions of a general meeting; (3) to decide on the operation plan and investment scheme of the Company; (4) to prepare the draft annual budget and final accounts of the Company; (5) to prepare the profit distribution plan and the loss recovery plan of the Company; (6) to prepare the plan for the Company to increase or reduce its registered capital, issuance of bonds and other securities and other listing plans; .......	Article 145The Board of Directors shall exercise the following powers and duties: (1) to convene a general meeting and submit work report to such meeting; (2) to implement the resolutions of a general meeting; (3) to decide on the operation plan and investment scheme of the Company; (4) to determine the objectives of the Company’s compliance management, assume responsibility for the effectiveness of compliance management of the Company and perform the corresponding duties of compliance management; (5) to prepare the draft annual budget and final accounts of the Company; (6) to prepare the profit distribution plan and the loss recovery plan of the Company; (7) to prepare the plan for the Company to increase or reduce its registered capital, issuance of bonds and other securities and other listing plans; .......	Supplementing this Article pursuant to Article 7 of the Measures, “to determine the objectives of the Company for compliance management, assume responsibility to the effectiveness of compliance management of the Company and perform the corresponding duties on compliance management” is added to the powers and duties of the Board of Directors.

– 13 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments	Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Article 174The Executive Committee of the Company shall, according to the resolutions of the Board of Directors or the relevant requirements, perform the following duties: (1) to carry out the operational guidelines of the Company, and determine major matters in relation to the operation and management of the Company; (2) to draft the financial budget plan of the Company, and submit the same to the Board of Directors for formulation; (3) to draft the final accounting plan, the profit distribution plan, and loss recovery plans of the Company, and submit the same to the Board of Directors for formulation; ......	Article 174The Executive Committee of the Company shall, according to the resolutions of the Board of Directors or the relevant requirements, perform the following duties: (1) to carry out the operational guidelines of the Company, and determine major matters in relation to the operation and management of the Company; (2) to implement the objectives of the Company’s compliance management, assume responsibility for the compliant operation of the Company, and perform the corresponding duties to compliance management; (3) to draft the financial budget plan of the Company, and submit the same to the Board of Directors for formulation; (4) to draft the final accounting plan, the profit distribution plan, and loss recovery plans of the Company, and submit the same to the Board of Directors for formulation; ......	Supplementing this Article pursuant to Article 9 of the Measures, “to implement the objectives of the Company for compliance management, assume responsibility to the compliant operation of the Company, and perform the corresponding duties on compliance management” is added to the duties of the Executive Committee of the Company.

– 14 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments		Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Article 189The Company shall have one (1) Chief Compliance Officer, who shall be appointed or dismissed by the Board of Directors. The appointment of Chief Compliance Officer by the Company shall be approved by the Securities Regulatory Authorities. The Company shall not dismiss the Chief Compliance Officer without proper reasons. A written report on the dismissal of the Chief Compliance Officer and the reason thereof shall be submitted to the Securities Regulatory Authorities within three (3) working days from the date of dismissal.		Article 189The Company shall have one (1) Chief Compliance Officer, who shall be appointed, dismissedand appraised by the Board of Directors. For the appointment of Chief Compliance Officer, the Company shall file his resume and the relevant certification materials to the relevant local office of the CSRC. The Chief Compliance Officer of the Company shall take office upon the approval by the relevant local office of the CSRC. The dismissal of the Chief Compliance Officer by the Company before the expiry of his term of office shall be supported by proper reasons. A written report on the reasons for the dismissal shall be submitted to the local office of the CSRC within 10 working days before the relevant board meeting is convened. The proper reasons referred to in the preceding paragraph include situations such as the application for resignation by the Chief Compliance Officer himself, or changes as ordered by the CSRC and its local office, or where there is evidence showing that he is unable to perform his duties properly or has failed to act diligently.	Amending this Article pursuant to the item (4) of Article 7 and Article 19 of the Measures to set out more details on the appointment and dismissal procedures and requirements of Chief Compliance Officer.
Nil		Article 190 Any removal of the Chief Compliance Officer by the Company shall be determined by the Board of Directors and notified to the Chief Compliance Officer. If the Chief Compliance Officer considers the removal to be insufficiently justified, he has the right to file a petition to the Board of Directors. The relevant notices, decisions and petition shall be recorded in writing for record and inspection. If the petition of the Chief Compliance Officer is rejected by the Board of Directors, the Chief Compliance Officer may file a petition to the CSRC and its local office or apply to the Securities Association of China for mediation.	Adding this Article pursuant to Article 24 of the Guidelines to set out the procedurals for removal of the Chief Compliance Officer and the relevant petition procedure.

– 15 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments		Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Nil		Article 191 If the Chief Compliance Officer is unable to perform his duties or is absent, his duties shall be performed by the Chairman or the chief operation and management officer of the Company. A written report shall be submitted to the relevant local office of the CSRC within 3 working days from the date of such determination. The period during which the performance of the Chief Compliance Officer’s duties is substituted by another person shall not exceed six months. The Company shall appoint a qualified person under relevant regulatory requirements as the Chief Compliance Officer during such period. During such period, the person who performs the duties of the Chief Compliance Officer shall not directly manage any business departments performing duties that conflict with the managerial duties of the Chief Compliance Officer. The Chief Compliance Officer may tender an application for resignation to the Board of Directors with one month advance notice and shall also report such application to the relevant local office of the CSRC. The Chief Compliance Officer shall continue to perform his duties until the resignation application is approved.	Adding this Article pursuant to Article 20 of the Measures and Article 25 of the Guidelines to set out the requirements and procedures for resignation of the Chief Compliance Officer and acting for its duties.

– 16 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments	Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Article 190The Chief Compliance Officer shall comply with the requirements of the relevant policies and regulations, acquire the following qualification and pass the qualification examination of the Securities Regulatory Authorities. (1) He/she has obtained the qualifications of being a senior management member of a securities company; (2) He/she is familiar with the securities business, masters the knowledge of securities laws, regulations and standards, and possesses the expertise and skills required for the compliance management; (3) He/she has five (5) years or more of experience in securities. He/she has passed the relevant professional examination or has eight (8) years or more of experience in laws, or eight (8) years or more of experience in professional regulatory work with the Securities Regulatory Authorities. The professional examination mentioned in item (3) in the preceding paragraph refers to the competence examination for compliance management personnel of securities companies of the Securities Association of China, the national judicial examination or the lawyer qualification examination.	Article 192 The Chief Compliance Officer shall familiarize himself with relevant laws, regulations and standards, be honest and trustworthy, familiarize himself with securities and fund businesses, possess the expertise and skills required for compliance management, and be equipped with the following qualifications: (1) he/she has 10 years or more of experience in securities and fund businesses and has passed the competence examination for compliance management personnel of the Securities Association of China; or he/she has 5 years or more of experience in securities and fund businesses and has passed the legal professional qualification examination; or he/she has 10 years or more of work experience in the Securities Regulatory Authorities and self-disciplinary organizations of securities and fund industries; (2) he/she has not been imposed with administrative penalties or material administrative regulatory measures by financial regulators in the last three years; (3) other conditions prescribed by the CSRC.	The qualifications for the Chief Compliance Officer is amended pursuant to the Article 18 of the Measures.
	(1)
	(2)
	(3)

– 17 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments	Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Article 191The Chief Compliance Officer, who is a member of senior management of the Company, shall examine, supervise and inspect the compliance concerning the operation, management and practice conduct of the Company and its personnel. The Chief Compliance Officer shall be internally accountable to the Board of Directors of the Company and externally accountable to the Securities Regulatory Authorities, and shall perform the following duties: (1) to conduct compliance examinations on the Company in respect of its internal management system, major decisions, new products and new business schemes, and issue written compliance examination opinions; and conduct compliance examinations and sign his/her express opinions on application materials or reports submitted by the Company in accordance with the requirements of the Securities Regulatory Authorities;	Article 193 The Chief Compliance Officer, who is a member of senior management of the Company, shall examine, supervise and inspect the compliance concerning the operation, management and practice conduct of the Company and its personnel. The Chief Compliance Officer shall be internally accountable to the Board of Directors of the Company and externally accountable to the Securities Regulatory Authorities, and shall perform the following duties: (1) to organize the formation of the basic compliance management system and other compliance management systems and supervise the implementation of such systems by the Company; (2) to advise the Board of Directors or Executive Committee of any changes to the laws, regulations and standards in a timely manner and urge the relevant departments to assess the effect of such changes on compliance management and to amend and optimize relevant rules and business processes;	The duties of the Chief Compliance Officer are reorganized and supplemented in details pursuant to the requirements of the Articles 11, 12, 13, 14, 15, 16 and 17 of the Measures.
	(2)

– 18 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments	Numbering and Contents of the Articles After Amendments	Numbering and Contents of the Articles After Amendments
(2) to supervise the Company and its staff in respect of the compliance of their operation, management and practice, and make regular or irregular examinations in accordance with the requirement of the Securities Regulatory Authorities and the Company; to arrange the implementation of the anti-money laundering system and information firewall system, provide compliance advice and organize compliance training to the senior management, each department and branch in accordance with the requirements of the Company, and deal with the reports and complaints regarding the Company and its staff in respect of their behaviors in violation of laws and regulations;	(3)	to conduct compliance examinations on the Company in respect of its internal management system, major decisions, new products and new business schemes, and issue written compliance examination opinions; and conduct compliance examinations and sign off on the compliance review advice on application materials or reports submitted by the Company in accordance with the requirements of the Securities Regulatory Authorities; to submit the relevant matters to the Board of Directors for determination where the Company does not adopt the compliance review advice from the Chief Compliance Officer; to supervise the Company and staff in respect of the compliance of their operation, management and practice, and make regular or irregular examinations in accordance with the requirement of the Securities Regulatory Authorities and the rules of the Company;
	(4)

– 19 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments	Numbering and Contents of the Articles After Amendments	Numbering and Contents of the Articles After Amendments
(3) to monitor and examine the compliance of the Company in order to identify the violation of laws and regulations or potential compliance risk of the Company in a timely manner, and report the same to the Board of Directors in a timely manner and to the local branch of CSRC at the Company’s place of domicile at the same time. The Chief Compliance Officer shall also report to relevant self-disciplinary organizations in the event of violation of industrial standards and self-disciplinary rules; For such act in violation of laws and regulations or such potential risks of compliance, opinions on suspension and handling shall be timely delivered to the Company’s relevant departments and such departments shall be urged to make rectifications. It shall assist the Company in reporting such rectification results to the local branch of CSRC at the Company’s place of domicile. If necessary, such reports shall be copied to the relevant self- disciplinary organizations; (4) if laws, regulations, standards or the listing rules of the place where the Company’s shares are listed is changed, to timely advise the Company’s Board of Directors or senior management and monitor the Company’s relevant departments, to evaluate the impact on the Company’s compliance management, to amend and improve the relevant management system and business procedures;	(5)	to assist the Board of Directors and the Executive Committee in the implementation of the conflict management systems, anti- money laundering system and information firewall system; to provide compliance advice and organizing compliance training in accordance with the requirements of the Company to senior management, each department and branch and each subsidiary; to supervise the relevant departments of the Company in handling the reports and complaints regarding the Company and its staff in respect of their behaviors in violation of laws and regulations; to report on the compliance of the Company’s operation and management and the implementation of the compliance management system to the Board of Directors and the General Manager as required by the Company; to report to the Board of Directors and the General Manager in a timely manner and in accordance with the requirements of the Articles of Association when the Company’s conduct is identified to be in breach of the relevant laws and regulations or there are potential compliance risks; to provide advice on remedies, and procure the Company to rectify and report to the local office of the CSRC in time; to report directly to the local office of the CSRC if the Company fails to report in time; to report to relevant self-disciplinary organizations in the event of violation of industrial standards and self- disciplinary rules;
	(6)
	(7)

– 20 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments	Numbering and Contents of the Articles After Amendments	Numbering and Contents of the Articles After Amendments
(5) to keep in touch and maintain communication with the Securities Regulatory Authorities and self-disciplinary organizations, and actively cooperate with the Securities Regulatory Authorities and self-disciplinary organizations in their work; to timely deal with matters on which the Securities Regulatory Authorities and the self- disciplinary organizations require investigation, cooperate with the Securities Regulatory Authorities and the self- disciplinary organizations in their inspection or investigation on the Company, and follow up and evaluate the implementation of the supervisory opinions and requirements; in the event that the provisions of laws, regulations and standard are not expressly stated and it is difficult to determine the compliance of the operational management and practice of the Company and its working staff, he/she may seek advice from the Securities Regulatory Authorities or the self-disciplinary organizations; (6) to perform other duties stipulated by the relevant laws, administrative regulations and the Articles of Association.	(8)	to deal with matters on which the Securities Regulatory Authorities and the self- disciplinary organizations require investigation in a timely manner; to cooperate with the Securities Regulatory Authorities and the self- disciplinary organizations in their inspection or investigation of the Company; to follow up and evaluate the implementation of the supervisory opinions and requirements; to keep for inspection, the documents and information in relation to the duties performed, such as issued compliance review advice, expressed compliance consultancy advice, signed documents of the Company, original drafts on compliance review; to record the details of duties performed; to perform other duties stipulated by the relevant laws, administrative regulations, departmental rules, regulatory documents, the listing rules of the securities market under which the Company’s shares are listed and the Articles of Association.
	(9)
	(10)

– 21 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments		Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Article 191…… The Chief Compliance Officer may attend such meetings related to the compliance management.		Article 194 The Company shall ensure that the Chief Compliance Officer is entitled to exercise the right to information and the right to investigate as necessary for the performance of his duties. The Company shall give prior notice to the Chief Compliance Officer where a Board meeting, meeting of the Executive Committee or other important meetings of the Company as well as those meetings which the Chief Compliance Officer requests to attend or observe, is to be convened. The Chief Compliance Officer has the right to attend or observe the relevant meetings and inspect and reproduce relevant documents and information as necessary in performing his duties. In performing his duties, the Chief Compliance Officer has the right to request relevant personnel of the Company to provide explanations on relevant matters where necessary and consult the intermediaries which provide audit and legal services to the Company. The Chief Compliance Officer may, on behalf of the Company, directly engage external professional institutions or persons to assist him in carrying out his duties as necessary, and the expenses shall be borne by the Company.	Adding this Article pursuant to the Article 25 of the Measures to set out clear and specific requirements for safeguarding the ways of exercising the full rights of the Chief Compliance Officer to be informed and investigate.
Nil		Article 195 The Company shall ensure the independence of the Chief Compliance Officer. The shareholders, Directors and senior management of the Company shall not give instructions directly to the Chief Compliance Officer or interfere with his duties by violating the duties and procedures as stipulated. The Directors, Supervisors and senior management of the Company shall support and cooperate with the Chief Compliance Officer on his work and shall not restrict or prevent the Chief Compliance Officer in performing his duties.	Adding this Article pursuant to the Article 26 of the Measures to set out the clear and specific requirements for the ways of safeguarding the independence of the Chief Compliance Officer.

– 22 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments		Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Article 192The Chief Compliance Officer shall submit compliance reports to the Board of Directors, the Supervisory Committee and the Securities Regulatory Authorities on a regular basis.		Article 196 The Chief Compliance Officer shall submit compliance reports to the Board of Directors, the Supervisory Committee and the Securities Regulatory Authorities on a regular basis. The Company shall submit an annual compliance report to the Securities Regulatory Authorities while submitting an annual report.	Supplementing this Article pursuant to Article 30 of the Measures.
Article 229The Company shall establish a sound compliance system of the Company in accordance with the relevant provisions of the laws, administrative regulations and the Securities Regulatory Authorities, which clarifies the responsibilities of the compliance personnel, and supervises and inspects the compliance of the Company’s operation and management behaviours. The Board of Directors, the Supervisory Committee and the senior management members of the Company shall perform their duties related to compliance management in accordance with the provisions of laws, regulations and the Articles of Association, and be responsible for the effectiveness of the Company’s compliance management. The officers in charge of each department and branch of the Company shall strengthen the supervision and administration of compliance over the practice of the employees of their respective departments and branches, and shall be responsible for the effectiveness of compliance management in their respective departments and branches.		Article 233 The Company shall in accordance with the relevant provisions of the laws, administrative regulations and the Securities Regulatory Authorities, establish a sound compliance system of the Company, clarify the responsibilities of the compliance personnel, and supervise and monitor the compliance of the Company’s operation and management behaviour. The Company insists on full compliance within the Company, led by the management to achieve compliant operation, which includes the creation of value in a compliant manner. Compliance is the fundamental concept for the survival of the Company. The Company shall initiate and push forward the establishment of compliance culture, nurture compliance awareness of the staff and enhance pride and level of professionalism of the personnel in charge of compliance management.	Supplementing this Article pursuant to the article 4 of the Measures, “the Company persists in the concept of full compliance within the Company and the management shall take the lead to achieve compliant operation, which includes the creation of value in a compliant manner. Compliance is the fundamental concept for the survival of the Company. The Company shall initiate and push forward the establishment of compliance culture, nurture compliance awareness of the staff and enhance occupational pride and level of professionalism of the personnel in charge of compliance management” is added.

– 23 –

APPENDIX I COMPARISON TABLE ON THE AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Numbering and Contents of the Articles Before Amendments	Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
All staff members of the company should be familiar with the laws, regulations and standards related to their practice, and should take the initiative to identify and control the compliance risk of their practice and be responsible for the compliance of their practice.	The Board of Directors, the Supervisory Committee and the senior management members of the Company shall perform their duties related to compliance management in accordance with the provisions of laws, regulations and the Articles of Association, and shall be responsible for the effectiveness of the Company’s compliance management. The officers in charge of each department and branch of the Company shall strengthen the supervision and administration of compliance over the practice of the employees of their respective departments and branches, and shall be responsible for the effectiveness of compliance management in their respective departments and branches. All staff members of the company should be familiar with the laws, regulations and standards related to their practice, and should take the initiative to identify and control the compliance risk of their practice and be responsible for the compliance of their practice.

– 24 –

APPENDIX II COMPARISON TABLE ON THE AMENDMENTS TO THE RULES OF PROCEDURES FOR BOARD MEETINGS

Comparison Table on the Amendments to the Rules of Procedures for Board Meetings of CSC Financial Co., Ltd.

Notes:

(1) In the column of Reasons for the Amendments in this comparison table:

The “ Guidelines ” refers to the Guidelines for Implementation of Compliance Management on Securities Companies (No. 208 [2017] of the Securities Association of China) promulgated by the Securities Association of China.

(2) The renumbering of articles and the changes to the cross references resulting from the amendments are not contained in this comparison table.

Numbering and Contents of the Articles Before Amendments		Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Nil		Article 13 The Company shall notify the Chief Compliance Officer prior to the convening of the Board meetings. The Chief Compliance Officer shall have the right to observe the meeting and is entitled to inspect and reproduce relevant documents and information where necessary in performing his duties.	Adding this Article pursuant to item 2 of Article 25 of the Measures and Article 31 of the Guidelines.

– 25 –

COMPARISON TABLE ON THE AMENDMENTS TO THE RULES OF PROCEDURES FOR SUPERVISORY COMMITTEE MEETINGS

APPENDIX III

Comparison Table on the Amendments to the Rules of Procedures for Supervisory Committee Meetings of CSC Financial Co., Ltd.

Notes:

(1) In the column of Reasons for the Amendments in this comparison table:

(2) The renumbering of articles and the changes to the cross references resulting from the amendments are not contained in this comparison table.

Numbering and Contents of the Articles Before Amendments		Numbering and Contents of the Articles After Amendments	Reasons for the Amendments
Nil		Article 9 The Company shall notify the Chief Compliance Officer prior to the convening of the meeting of the Supervisory Committee. The Chief Compliance Officer shall have the right to observe the meeting where necessary in performing his duties.	Adding this Article pursuant to item 2 of Article 25 of the Measures and Article 31 of the Guidelines.
Article 10Supervisors shall be present at the Board meeting to supervise whether the Board makes decisions pursuant to the Articles of Association and the legal procedure, and shall listen to the deliberation of the Board meeting, but shall not participate in the deliberation of the Board meeting. Where the supervisors object to the resolutions of the Board, the supervisors shall send written opinions to the Board through the Supervisory Committee after the meeting.		Article 11Supervisors shall be present at the Board meeting tosupervise the Board of Directors on its fulfillment of duties for compliance management and whether the Board of Directors makes decisions pursuant to the Articles of Association and the legal procedure, and shall listen to the deliberation of the Board meeting, but shall not participate in the deliberation of the Board meeting. Where the supervisors object to the resolutions of the Board of Directors, the supervisors shall send written opinions to the Board of Directors through the Supervisory Committee after the meeting.	Supplementing the duties of the Supervisory Committee pursuant to Article 8 of the Measures, “supervise the Board of Directors on its fulfillment of duties for compliance management” is added.

– 26 –

APPENDIX IV BIOGRAPHICAL DETAILS OF CANDIDATES OF NON-EXECUTIVE DIRECTOR

Mr. Dong Shi

Mr. Dong Shi, aged 52, has been serving as a non-executive director of Industrial and Commercial Bank of China Limited (a company listed on the Hong Kong Stock Exchange (stock code: 01398) and the Shanghai Stock Exchange (stock code: 601398)) since September 2017, and has been serving as a designated director appointed by Central Huijin Investment Limited since October 2008.

Mr. Dong served as the deputy head of the Inspection and Supervision Bureau of the People’s Bank of China from July 1988 to July 1998. He served as an assistant special inspector of the State Council, a director of the supervisory board of the Central Enterprises Working Commission, and deputy directorgeneral of the Foreign Affairs Bureau under the State-owned Assets Supervision and Administration Commission of the State Council from August 1998 to September 2008. He served as a director of China Reinsurance (Group) Corporation and a director of China Reinsurance Asset Management Co., Ltd. from October 2008 to August 2011, and served as a non-executive director of China Construction Bank Corporation (a company listed on the Hong Kong Stock Exchange (stock code: 00939) and the Shanghai Stock Exchange (stock code: 601939)) from September 2011 to June 2017.

Mr. Dong graduated from Renmin University of China in January 2003 and obtained a Master’s degree in Law, majoring in Economic Law. He is a qualified senior economist.

Mr. Wang Hao

Mr. Wang Hao, aged 48, has been serving as the general manager of Ho Chi Minh City branch of Bank of China Limited (a company listed on the Hong Kong Stock Exchange (stock code: 03988) and the Shanghai Stock Exchange (stock code: 601988)) since December 2009.

Mr. Wang served as a credit officer, deputy director, director of the credit department, assistant to general manager, deputy general manager and director of credit management department, deputy general manager (in charge of overall operation), general manager and party secretary of Liuzhou branch of Bank of China from July 1991 to April 2003. He served as the general manager and party secretary of Guilin branch of Bank of China from April 2003 to July 2004, an assistant to the general manager and a member of the Communist Party Committee of Guangxi Zhuang Autonomous Region branch of Bank of China from July 2004 to October 2008, and a deputy general manager of Ho Chi Minh City branch of Bank of China from October 2008 to December 2009.

Mr. Wang obtained a Bachelor’s degree in Economics from Fudan University in July 1991 and a Master’s degree in Business Administration from China Europe International Business School in September 2005.

– 27 –

REPORT ON THE USE OF CAPITAL PREVIOUSLY RAISED

APPENDIX V

Report on the Use of Capital Previously Raised of CSC Financial Co., Ltd.

I. DETAILS OF CAPITAL PREVIOUSLY RAISED

Pursuant to the Approval Letter for Issuance of Overseas-listed Foreign Shares of CSC Financial Co., Ltd. (the “ Company ”) (《關於核准中信建投証券股份有限公司發行境外上市外資股的批覆》) (CSRC Approval [2016] No. 2529) from the China Securities Regulatory Commission on November 4, 2016, the Company was approved to issue 1,076,470,000 shares of overseas-listed foreign shares to the public at the offering price of HK$6.81 per share (equivalent to RMB6.06). The share capital was paid up in Hong Kong dollars, amounting to HK$7,330,760,700.00 (equivalent to RMB6,518,732,337.26). Deducting the issuance expenses amounting to RMB200,903,380.25, the share capital raised was equivalent to RMB6,317,828,957.01. The abovementioned capital was paid up on December 9, 2016.

On January 5, 2017, the Company partially exercised the over-allotment option to issue 69,915,238 shares of overseas-listed foreign shares at the offering price of HK$6.81 per share (equivalent to RMB6.09). The shares were paid in Hong Kong dollars, amounting to HK$476,122,770.78 (equivalent to RMB425,534,726.38). Deducting the issuance expenses amounting to RMB10,671,134.34, the proceeds raised was equivalent to RMB414,863,592.04, and was verified by Beijing Branch of PricewaterhouseCoopers Zhong Tian LLP, of which issued the capital verification report numbered PricewaterhouseCoopers Zhong Tian Beijing [2017] No. 037 (《驗資報告》(普華永道中天北京驗字[2017]第037 號)).

On June 30, 2017, the balance of the raised capital in the dedicated bank account was equivalent to RMB822,986,023.64 in total, including an amount equivalent to RMB71,339,834.78 of the brokerage commissions to be transferred, an amount equivalent to RMB185,595,754.12 of the issuance expenses to be paid, and unused capital raised. In addition, the balance of the amount to be used for product seed funding by China Securities Capital equivalent to RMB981,538,543.43 in total is to be transferred from the dedicated bank account for the above capital to the account of the Company.

II. ACTUAL USE OF THE CAPITAL PREVIOUSLY RAISED

According to the prospectus for the overseas-listed foreign shares issued by the Company in 2016, the Company planned to use an amount equivalent to RMB6,310.8920 million in total of the above capital for 5 specific projects. Additional net capital received due to the exercise of any over-allotment option would be used for the above-mentioned projects on a pro rata basis. As of June 30, 2017, the actual amount invested in the projects involving the use of the above capital previously raised was an amount equivalent to RMB5,192.8382 million in total.

The use of capital previously raised of the Company as of June 30, 2017 is set out as follows:

		Unit: RMB ten thousand	Unit: RMB ten thousand
Total raised capital:	673,269.25	Accumulated use of total raised capital:	519,283.82
Total amount of raised capital	Nil	Use of total amount of raised capital in	519,283.82
with changes in usage:		respective years:
Total amount of raised capital	Nil	2016:	204,106.16
with changes in usage as a		For the six months ended	315,177.66
proportion of total raised		June 30, 2017:
capital:

– 28 –

REPORT ON THE USE OF CAPITAL PREVIOUSLY RAISED

APPENDIX V

	The date on	which the	project	reaches	the expected	fully utilized	state (or the	completion	progress of	the project	as of the	closing date)	Note 2				Note 2				Note 2				Note 2								Note 2				Note 2
		Difference	between	promised	investment	amount after	capital	raising	and actual	investment	amount	(Note 1)	–				7,081.19				134,653.85				12,250.39								–				153,985.43
The accumulated investment amount of	the raised capital as of June 30, 2017							Promised	investment Actual	amount after investment	capital amount	raising (Note 3)	235,644.24 235,644.24				134,653.85 127,572.66				134,653.85 –				100,990.39 88,740.00								67,326.92 67,326.92				673,269.25 519,283.82
							Promised	investment	amount	before	capital	raising	235,401.45				134,515.11				134,515.11				100,886.33								67,257.56				672,575.56
	Total investment amount of the raised capital						Promised	investment Promised	amount investment	before amount after Actual	capital capital investment	raising raising amount	35%, 35%, 235,644.24	an amount an amount	equivalent to equivalent to	235,401.45 235,644.24	20%, 20%, 127,572.66	an amount an amount	equivalent to equivalent to	134,515.11 134,653.85	20%, 20%, –	an amount an amount	equivalent to equivalent to	134,515.11 134,653.85	15%, 15%, 88,740.00	an amount an amount	equivalent to equivalent to	100,886.33 100,990.39					10%, 10%, 67,326.92	an amount an amount	equivalent to equivalent to	67,257.56 67,326.92	672,575.56 673,269.25 519,283.82
	Investment project										Promised Actual	investment project investment project	Meeting customer Meeting customer	investment and investment and	financing needs financing needs		Enhancing Enhancing	investment and investment and	market-making market-making	capacity capacity	Product seed fund Product seed fund				Enhancing Enhancing	cross-border cross- border	business capacity business capacity	and international and international	competitiveness, competitiveness,	increasing proportion increasing proportion	of overseas assets and of overseas assets	revenue and revenue	Working capital and Working capital	other general business and other general	use business use
												No.	1				2				3				4								5				Total

– 29 –

REPORT ON THE USE OF CAPITAL PREVIOUSLY RAISED

APPENDIX V

Note 1: The difference between the actual investment amount and promised investment amount after capital raising was the unused capital raised as of June 30, 2017.

The Company has compared, item by item, the promised investment projects stated in the H share prospectus with the disclosed specific usage. As of June 30, 2017, the H share capital raised which the Company had promised but had not used was equivalent to RMB1,539.8543 million. The Company will invest the H share raised capital according to the actual business development needs. Among these, the H share capital raised to be used for the trading and institutional client service business (equivalent to RMB70.8119 million) will be used in expanding the scale of investment in FICC and stocks and derivatives and enhancing market-making capacity for various products; the H share capital raised to be used for the investment management business (equivalent to RMB1,346.5385 million) will be used for the junior-grade investments when issuing asset management products of the securities company, the capital increase of China Securities Funds and China Securities Capital, and the offering of alternative investment services, after which the capital raised will be used according to actual needs; the H share capital raised to be used for overseas business (equivalent to RMB122.5039 million) will be temporarily maintained at the overseas capital raising account and remitted to the overseas subsidiaries for further use according to the actual business needs of the overseas subsidiaries after obtaining the approval of the relevant regulatory authorities.

Note 2: Some of the H share capital raised has been used for the committed projects stated in the prospectus. Correspondingly, the net assets and net capital of the Company have increased. Because the capital invested in the investment projects related to the capital previously raised included both the capital originally held by the Company and the capital raised, it is impossible to calculate the realization of benefits achieved by the raised capital as of June 30, 2017 separately.
Note 3: The calculation of the RMB equivalent of the used amount of H share capital raised was based on actual exchange rate.

The Company has compared, item by item, the actual use of the abovementioned raised capital with the relevant content disclosed in the annual report, interim report and other information disclosure documents from 2016 to June 30, 2017, and found no inconsistency.

– 30 –

NOTICE OF THE 2017 SECOND EXTRAORDINARY GENERAL MEETING

==> picture [337 x 60] intentionally omitted <==

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 6066)

NOTICE OF THE 2017 SECOND EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2017 second extraordinary general meeting (the “ EGM ”) of CSC Financial Co., Ltd. (the “ Company ”) will be held at 9:00 a.m. on Monday, December 11, 2017 at the Multi-function Hall, B1/F, Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue, Dongcheng District, Beijing, PRC, to consider and, if thought fit, approve the following resolutions. Unless otherwise specified, capitalized terms used in this notice shall have the same meaning as those defined in the circular of the Company dated October 26, 2017.

SPECIAL RESOLUTIONS

To consider and approve:

the resolution on proposed amendments to the Articles of Association, Rules of Procedures for Board Meetings and Rules of Procedures for Supervisory Committee Meetings; and
the resolution on proposed general mandate to continue issuing medium and long-term debt financing instruments.

ORDINARY RESOLUTIONS

To consider and approve:

the resolution on election of Non-executive Directors;
the resolution on report on the use of capital previously raised; and

– 31 –

NOTICE OF THE 2017 SECOND EXTRAORDINARY GENERAL MEETING

the resolution on proposed adjustment to the allowance of the Independent Non-executive Directors.

By order of the Board CSC Financial Co., Ltd. Wang Changqing Chairman

Beijing, the PRC October 26, 2017

As at the date of this notice, the executive Directors of the Company are Mr. WANG Changqing and Mr. QI Liang; the non-executive Directors of the Company are Mr. YU Zhongfu, Ms. HU Donghui, Mr. WANG Chenyang, Mr. WANG Shouye, Mr. LIU Dingping, Ms. WANG Shumin and Mr. XU Gang; and the independent non-executive Directors of the Company are Mr. FENG Genfu, Ms. ZHU Shengqin, Mr. DAI Deming, Mr. BAI Jianjun and Mr. LIU Qiao.

Notes:

1. Eligibility for Attending the EGM and Closure of Register of Members

The register of members of the Company will be closed for the purpose of determining Shareholders’ entitlement to attend the EGM from Saturday, November 11, 2017 to Monday, December 11, 2017 (both days inclusive), during which period no transfer of Shares will be registered. In order to attend the EGM, Shareholders should ensure that all transfer documents, accompanied by the relevant share certificates, are lodged with the Company’s H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for H Shareholders) or the Company’s Board Office at 8/F, Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue, Dongcheng District, Beijing, PRC (for holders of Domestic Shares), no later than 4:30 p.m. on Friday, November 10, 2017 to complete registration. Holders of H Shares and Domestic Shares who are registered with Computershare Hong Kong Investor Services Limited or the Company’s Board Office (where appropriate) at the close of business on the aforementioned date are entitled to attend the EGM.

Where there are joint holders of any shares, the one whose name stands first on the register of members shall be entitled to attend and vote at the EGM in respect of such shares.

– 32 –

NOTICE OF THE 2017 SECOND EXTRAORDINARY GENERAL MEETING

2. Proxy

(1) Any Shareholder entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and vote at the meeting on his or her behalf. A proxy need not be a Shareholder.
(2) The instrument appointing a proxy must be in writing by the appointor or his attorney duly authorized in writing, or if the appointor is a legal entity, either under seal or signed by a director or a duly authorized attorney.

To be valid, the proxy form together with the notarized power of attorney or other documents of authorization, if any, must be completed and delivered to Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for H Shareholders) or the Company’s Board office at 8/F, Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue, Dongcheng District, Beijing, PRC (for holders of Domestic Shares), no later than 24 hours before the time fixed for the EGM (i.e. 9:00 a.m. on Sunday, December 10, 2017) or any adjournment thereof. The proxy form for the EGM is enclosed herewith.

Completion and return of the proxy form will not preclude the Shareholders from attending and voting at the EGM or at any adjourned meeting if they so wish.

3. Registration Procedures for Attending the EGM

(1) Shareholder or his/her proxy shall produce proof of identity when attending the EGM:
(a) Legal representatives of legal person shareholders who attend the meeting shall produce their own identity cards and effective proof of their capacity as legal representatives. Proxies of legal person shareholders shall produce their own identity cards and the form of proxy duly signed by the legal representatives of the legal person shareholders according to laws.
(b) Individual Shareholders who attend the meeting in person shall produce their identity cards or other effective document or proof of identity. Proxies of individual Shareholders shall produce effective proof of identity and form of proxy.
(2) Shareholders intending to attend the EGM in person or by their proxies should return the completed and signed reply slip for attending the EGM in person, by post or by fax to Computershare Hong Kong Investor Services Limited (for H Shareholders), or to the Company’s Board office (for holders of Domestic Shares) on or before Tuesday, November 21, 2017.

4. Voting by Poll

According to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Accordingly, the resolution to be proposed at the EGM will be voted by poll. Results of the poll voting will be posted on the website of the Company at www.csc108.com and on the HKExnews website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk upon the conclusion of the EGM.

– 33 –

NOTICE OF THE 2017 SECOND EXTRAORDINARY GENERAL MEETING

5. Miscellaneous

(1) The duration of the EGM is expected not to exceed half a day. Shareholders who attend the EGM shall arrange for their own transportation and accommodation at their own expenses.
(2) The address of Computershare Hong Kong Investor Services Limited is at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (Telephone: (852) 2862 8555, Fax: (852) 2865 0990).
(3) The location of the Company’s Board office is at 8/F, Office Building of CSC Financial Co., Ltd., No. 188 Chaonei Avenue, Dongcheng District, Beijing, PRC (Telephone: (86) 10 8513 0716, Fax: (86) 10 6518 6399).

– 34 –

AI assistant

CSC Financial Co., Ltd. — Proxy Solicitation & Information Statement 2017

50957_rns_2017-10-25_363ff6c4-656f-493a-b134-396e0fb8b859.pdf

( 1) PROPOSED AMENDMENTS TO

(2) PROPOSED GENERAL MANDATE TO CONTINUE ISSUING MEDIUM AND LONG-TERM DEBT FINANCING INSTRUMENTS

(4) REPORT ON THE USE OF CAPITAL PREVIOUSLY RAISED

(Stock Code: 6066)

(1) PROPOSED AMENDMENTS TO

I. INTRODUCTION

II. BUSINESS TO BE CONSIDERED AT THE EXTRAORDINARY GENERAL MEETING

1. Proposed Amendments to the Articles of Association, Rules of Procedures for Board Meetings and Rules of Procedures for Supervisory Committee Meetings

LETTER FROM THE BOARD

2. Proposed General Mandate to Continue Issuing Medium and Long-term Debt Financing Instruments

A. Issuer, Issue Size and Issue Method

B. Type of Issue

C. Term of Issue

D. Interest Rate of Issue

E. Issue Price

F. Security and Other Credit Enhancement Arrangements

G. Use of Proceeds

H. Issue Target and Arrangements on Placement to Shareholders

I. Listing Arrangements

J. Safeguard Measures for Repayment

K. Extension and Change in Interest Rate

LETTER FROM THE BOARD

3. Election of Non-Executive Directors

4. Report on the Use of Capital Previously Raised

5. Proposed Adjustment of the Allowance of the Independent Non-executive Directors

III. RESPONSIBILITY STATEMENT

IV. EXTRAORDINARY GENERAL MEETING

V. VOTING BY POLL

VI. RECOMMENDATIONS

Comparison Table on the Amendments to the Articles of Association of