China Merchants Securities : PROPOSED ADOPTION OF THE EMPLOYEE STOCK OWNERSHIP SCHEME, THE PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTOR AND NOTICE OF THE 2020 FIRST EXTRAORDINARY GENERAL MEETING

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

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, independent adviser or other professional adviser.

If you have sold or otherwise transferred all your shares in China Merchants Securities Co., Ltd., you should at once hand this circular and the enclosed form of proxy and reply slip to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

(Stock Code: 6099)

PROPOSED ADOPTION OF THE

EMPLOYEE STOCK OWNERSHIP SCHEME,

THE PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTOR

AND

NOTICE OF THE 2020 FIRST EXTRAORDINARY GENERAL MEETING

A letter from the Board is set out on pages 3 to 15 of this circular.

A notice convening the EGM of the Company to be held at Marco Polo Shenzhen, 28 Fuhua 1st Road, Futian CBD, Shenzhen on Wednesday, January 15, 2020 at 10:00 a.m. is set out on pages N-1 to N-3 of this circular.

The reply slip and proxy form for use at the EGM are enclosed with this circular for despatch to the Shareholders. Please complete and return the proxy form in accordance with the instructions printed thereon as soon as practicable and in any event not less than 24 hours before the time stipulated for the holding of the EGM and deposit it together with the notarised power of attorney or other document of authorization with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited (for holders of H Shares). Completion and return of the proxy form will not preclude you from attending and voting at the EGM in person.

Shareholders who intend to attend the EGM in person or by proxy should complete and return the reply slip for attending the EGM to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited (for holders of H Share) on or before Tuesday, December 24, 2019.

November 29, 2019

CONTENTS
	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix - Employee Stock Ownership Scheme of
China Merchants Securities Co., Ltd. (Draft) . . . . . . . . . . . . . .	A-1
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	N-1

- i -

DEFINITIONS

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

"A Share(s)"	the PRC domestic listed share(s) in the share capital of
	the Company with nominal value of RMB1.00 each,
	listed on the Shanghai Stock Exchange and traded in
	RMB
"Articles of Association"	the articles of association of the Company
"Asset Management Agency"	the asset management agency entrusted by Employee
	Stock Ownership Scheme
"Asset Management Contract"	the asset management contract entered into among
	the Company (on behalf of the Employee Stock
	Ownership Scheme), China Merchants Securities
	Asset Management Co., Ltd. and China Merchants
	Bank Co., Ltd., Shenzhen Branch on October 15, 2019
	in relation to Asset Management Scheme
"Asset Management Scheme"	the asset management scheme established by the
	Asset Management Agency entrusted by the
	Employee Stock Ownership Scheme in relation to the
	Employee Stock Ownership Scheme
"Board"	the board of Directors of the Company
"Company"	China Merchants Securities Co., Ltd., a joint stock
	company incorporated in the PRC with limited
	liability, the H Shares and A Shares of which are listed
	on the main board of the Stock Exchange (stock code:
	6099) and on the Shanghai Stock Exchange (stock
	code: 600999), respectively
"connected person(s)"	has the meaning ascribed to it under the Listing Rules
"controlling shareholder(s)"	has the meaning ascribed to it under the Listing Rules
"CSRC"	China Securities Regulatory Commission (中國證券監
	督管理委員會)
"Director(s)"	director(s) of the Company
"EGM"	the 2020 first extraordinary general meeting to be held
	by the Company at 10:00 a.m. on Wednesday, January
	15, 2020 or any adjournment thereof (as the case may
	be)
"Employee Stock	the employee stock ownership scheme of the
Ownership Scheme"	Company and the full text of the Employee Stock
or "the Scheme"	Ownership Scheme of China Merchants Securities
	Co., Ltd. (Draft) is set out in the Appendix to this
	circular

- 1 -

	DEFINITIONS
"H Share(s)"	the overseas-listed foreign share(s) in the capital of
	the Company with nominal value of RMB1.00 each,
	listed on the main board of the Stock Exchange and
	traded in Hong Kong dollars
"HKSFC"	Securities and Futures Commission of Hong Kong
"Holder(s)"	the employee(s) of the Company who actually
	contribute to the Employee Stock Ownership Scheme
	as stipulated by the Employee Stock Ownership
	Scheme
"Holders' Meeting"	the meeting of the Holders of the Employee Stock
	Ownership Scheme
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC
"Latest Practicable Date"	November 26, 2019 being the latest practicable date
	for the purpose of ascertaining certain information
	contained in this circular
"Listing Rules"	the Rules Governing the Listing of Securities on the
	Stock Exchange
"PRC"	the People's Republic of China, and for the purposes
	of this circular only, excluding Hong Kong, the Macau
	Special Administrative Region of the People's
	Republic of China and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Shanghai Stock Exchange"	The Shanghai Stock Exchange Limited
"Share(s)"	A Share(s) and/or H Share(s)
"Shareholder(s)"	holder(s) of the Company's Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subject A Share(s)"	A Share(s) to be purchased and held by virtue of the
	Scheme through legal means
"Supervisor(s)"	the supervisors of the Company
"%"	per cent.

- 2 -

LETTER FROM THE BOARD

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

(Stock Code: 6099)
Executive Directors:	Registered Office:
Mr. HUO Da (Chairman of the Board)	No.111, Fuhuayi Road
Mr. XIONG Jiantao (President)	Futian District
	Shenzhen
Non-executive Directors:	Guangdong
Ms. SU Min	PRC
Mr. SU Jian
Mr. XIONG Xianliang	Principal Place of Business
Ms. PENG Lei	in Hong Kong:
Mr. HUANG Jian	48/F, One Exchange Square
Mr. WANG Daxiong	8 Connaught Place
Mr. WANG Wen	Central
	Hong Kong
Independent Non-executive Directors:
Mr. XIANG Hua
Mr. XIAO Houfa
Mr. XIONG Wei
Mr. HU Honggao
Mr. WONG Ti
	November 29, 2019
To the Shareholders
Dear Sir or Madam,

PROPOSED ADOPTION OF THE

EMPLOYEE STOCK OWNERSHIP SCHEME,

THE PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTOR

AND

NOTICE OF THE 2020 FIRST EXTRAORDINARY GENERAL MEETING

INTRODUCTION

References are made to the announcements in relation to the proposed adoption of the Employee Stock Ownership Scheme and the proposed appointment of non-executive Director both dated October 15, 2019.

The purpose of this circular is (i) to provide the Shareholders with further information on the proposed adoption of the Employee Stock Ownership Scheme and the proposed appointment of non-executive Director; and (ii) to give the Shareholders a notice of the EGM and other information.

- 3 -

LETTER FROM THE BOARD

EMPLOYEE STOCK OWNERSHIP SCHEME

In order to further consummate the corporate governance structure of the Company, establish and improve the benefit-sharing and risk-sharing mechanism among the Shareholders, the Company and employees, advocate the common and sustainable development concept of the Company and individual, fully arouse the enthusiasm of the Company's senior management and the core talents, attract and retain talents and business backbones, maintain the long-term and near-term interests of the Company, attract various kinds of talents in a more flexible manner, and better promote the Company's long-term, sustainable and healthy development, the relevant resolutions regarding the Employee Stock Ownership Scheme were considered and approved at the 25th meeting of the sixth session of the Board held on October 15, 2019.

The sources of funds of the Scheme shall be derived from the personal legal remuneration and other self-raised funds of the employees obtained in other manners permitted by laws and administrative regulations. The source of Shares under the Employee Stock Ownership Scheme shall be A Shares to be repurchased by the Company using its own funds through the centralized bidding. The total subscription amount of the Scheme participants shall not exceed RMB808 million (inclusive). The final scale of the Scheme will be determined according to the capital scale of employees participating in the Scheme and the specific amount and price of A Shares to be repurchased by the Company. After implementation of the Scheme, the total number of A Shares held under all effective employee stock ownership schemes of the Company shall not, in aggregate, exceed 10% of the Company's total share capital and the number of A Shares corresponding to the entitlements of Employee Stock Ownership Scheme held by any single Holder shall not, in aggregate, exceed 1% of the Company's total share capital.

The Employee Stock Ownership Scheme is formulated in accordance with the Company Law of the PRC, the Securities Law of the PRC, the Guiding Opinions on the Pilot Implementation of Employee Stock Ownership Scheme by Listed Companies and other applicable laws and regulations and normative documents as well as the relevant provisions of the Articles of Association. The full text of the Employee Stock Ownership Scheme (Draft) is set out in the Appendix to this circular.

Principal terms of the Employee Stock Ownership Scheme

Participants:	The selection criteria of the participants of the Scheme
	are formulated on the basis of the job grade of
	employees in the Company and the seniority and
	performance appraisal results with reference to
	market practice. The definite list will be determined
	according to the employees' employment status as of
	May 31, 2019 and their employment status as of the
	last payment date.

- 4 -

LETTER FROM THE BOARD

	The participants of the Scheme are Directors,
	Supervisors, senior management, employees at D
	Level or above and other core cadres who have
	entered into labour contracts with the Company and
	its wholly-owned subsidiaries. The total number of
	participants of the Scheme shall not exceed 1,157.
Number and amount of	The source of Shares under the Employee Stock
Shares to be subscribed:	Ownership Scheme shall be A Shares to be
	repurchased by the Company using its own funds
	through the centralized bidding. The final scale of the
	Scheme will be determined according to the capital
	scale of employees participating in the Scheme and
	the specific amount and price of the Shares to be
	repurchased by the Company. The total subscription
	amount shall not exceed RMB808 million (inclusive).
	The entitlements in the Employee Stock Ownership
	Scheme subscribed by the participants of the Scheme
	and the amount of corresponding entitlements shall
	be subject to the actual implementation at that time.
	Of which, the aggregate subscription amount of
	Directors, Supervisors and senior management (being
	Mr. HUO Da, Mr. XIONG Jiantao, Ms. ZHOU Linda
	Lei, Ms. YIN Hongyan, Ms. HE Min, Mr. XIONG
	Zhigang, Ms. DENG Xiaoli, Mr. LI Zongjun, Mr. WU
	Huifeng, Mr. ZHAO Bin, Mr. HU Yu, Mr. WU
	Guangyan, Mr. XIE Jijun) of the Company is
	approximately RMB62 million, and the aggregate
	entitlements in the Employee Stock Ownership
	Scheme available for subscription represents
	approximately 8% of the total entitlements in the
	Employee Stock Ownership Scheme; while the
	aggregate subscription amount of other employees is
	approximately RMB746 million, and the aggregate
	entitlements in the Employee Stock Ownership
	Scheme available for subscription represents
	approximately 92% of the total entitlements in the
	Employee Stock Ownership Scheme.
Lock-up period:	The lock-up period of the Subject A Shares under the
	Scheme shall be 36 months from the date when the
	Company announces the completion of registration of
	the Subject A Shares. The Subject A Shares under the
	Scheme will be one-off unlocked upon the expiry of
	the lock-up period.

- 5 -

LETTER FROM THE BOARD
Term of the Scheme:	The term of the Scheme shall be 10 years from the date
	when the Scheme is considered and approved at the
	general meeting of the Company. The term of the
	Scheme may be extended upon it is considered on the
	Holders' Meeting of the Scheme and approved by the
	Board. The Employee Stock Ownership Scheme shall
	be automatically terminated if the term of the Scheme
	is not effectively extended upon expiry.
Disposal of equity	(I)	Disposal of the equity interests of the Employee
interests of the		Stock Ownership Scheme
Employee Stock
Ownership Scheme:	During the term of the Scheme, except in the event
	that the disposal is otherwise stipulated in the Scheme
	or required by effective judicial adjudication, the
	Holders shall neither pledge or secure, create
	guarantee over, settle debt with, nor transfer or
	otherwise dispose the entitlements held by them in
	the Employee Stock Ownership Scheme.
	(II)	The disposal measures for the Holder who is
		not eligible to participate in the Employee Stock
		Ownership Scheme during the term of the
		Scheme
	In the event of leaving office, retirement, disability,
	incapacity, death and other circumstances of the
	Holder during the lock-up period of the Scheme, no
	change shall be made to his/her entitlements under
	the Scheme and the Holder 's entitlements in the
	Employee Stock Ownership Scheme shall be subject to
	the lock-up period of the Scheme and other relevant
	arrangements. The above circumstances include:
	(1)	the Holder leaves office due to illness,
		disability, incapacity or other reasons;
	(2)	the Holder retires due to reaching the age of
		retirement as set out by the requirement in the
		PRC;
	(3)	the Holder dies and his/her entitlements under
		the Scheme shall be inherited by his/her lawful
		successor.

- 6 -

LETTER FROM THE BOARD

Upon the expiry of the lock-up period, the above Holder or his/her lawful successor may apply for withdrawal and the Asset Management Agency shall sell the Shares corresponding to the entitlements held by the Holder as stipulated under the Scheme and transfer the proceeds and related income (if any) to the dedicated account for the Employee Stock Ownership Scheme after deducting the relevant expenses in compliance with the laws. The management committee shall allocate the corresponding equities according to the entitlements under the Scheme held by the Holder.

Subscription by connected person

If any connected persons subscribe for the entitlements in the Employee Stock Ownership Scheme, the Company shall comply with relevant provisions of the Listing Rules as may be applicable, including any reporting, announcement and/or shareholders' approval requirements, unless otherwise exempted under the Listing Rules.

Management of the Employee Stock Ownership Scheme

Management Pattern

The authority of the Employee Stock Ownership Scheme refers to the Holders' Meeting and the Holders can attend the Holders' Meeting and enjoy their voting rights on the Holders' Meeting according to their entitlements in the Employee Stock Ownership Scheme. The Holders' Meeting shall exercise its functions and powers, such as electing and removing members of the management committee and authorizing the management committee to be responsible for the daily management of the Employee Stock Ownership Scheme. A management committee shall be set up under the Holders' Meeting, which shall be responsible for the daily management of the Employee Stock Ownership Scheme, and shall have the right to authorize the Asset Management Agency to exercise the shareholders rights. The management committee comprises of five members and one chairman. All members of the management committee shall be the Holders and elected on the Holders' Meeting.

The Board is responsible for formulating the Scheme and handling other related matters of the Employee Stock Ownership Scheme within the scope authorized by the EGM.

- 7 -

LETTER FROM THE BOARD

Asset Management Agency

The Employee Stock Ownership Scheme entrusts the Asset Management Agency to set up the Asset Management Scheme for the investment and operation of the Employee Stock Ownership Scheme. The Asset Management Agency shall carry out shares trading, dividend and interest payment, taxes and fees payment and other related work according to the Asset Management Contract. When purchasing or selling the Subject A Shares, the Asset Management Agency must strictly abide by the market trading rules and the provisions of the CSRC, the HKSFC and the stock exchanges at the places where the securities of the Company were listed concerning the prohibition of shares trading during the sensitive period of information, and is strictly prohibited from using any insider information for trading.

ASSET MANAGEMENT CONTRACT

In order to manage the assets under the Scheme, the Board is pleased to announce that on October 15, 2019, the Company (on behalf of the Employee Stock Ownership Scheme), China Merchants Securities Asset Management Co., Ltd. (a wholly-owned subsidiary of the Company, as the Asset Management Agency) and China Merchants Bank Co., Ltd., Shenzhen Branch (as the custodian) entered into the Asset Management Contract. Pursuant to the Asset Management Contract, the Asset Management Agency will establish and manage the Asset Management Scheme to hold the relevant interest in assets on behalf of the Scheme.

Principal terms of the Asset Management Contract

Date:	October 15, 2019
Investment objective:	The investment objective is to achieve value
	preserving and appreciation of the entrusted asset
	with an aim to win stable investment returns for asset
	investors under the premise of effectively controlling
	investment risks. The Asset Management Agency
	shall establish and improve the risk control
	mechanism and decision-making mechanism of
	investment management with due caution and
	diligence, and provide asset investors with entrusted
	asset management services through applying its
	professional knowledge and skills while regarding
	the security and stable returns of the entrusted asset
	as the objective of the entrusted investment
	management.

- 8 -

LETTER FROM THE BOARD

Parties:	(i) the Company (on behalf of the Employee Stock
	Ownership	Scheme) (as	investor)	(the
	"Investor");
	(ii) China Merchants Securities Asset Management
	Co., Ltd. (as manager) (the "Asset Management
	Agency"); and
	(iii) China Merchants Bank Co., Ltd., Shenzhen
	Branch (as custodian) (the "Custodian").
Investment orientation:	The Asset Management Scheme mainly invests in the
	A Shares issued by the Company as stipulated in the
	Employee Stock Ownership Scheme. Idle funds can be
	invested in bank deposits and money market funds.
Investment proportion:	The Asset Management Scheme is an equity product
	and its investment in equity assets recognized by the
	CSRC and the People's Bank of China should be
	limited within the proportion ranging from 80%-100%
	of the total assets managed under the Asset
	Management Scheme.
Minimum initial scale:	The minimum amount of the Investor to participate in
	the Asset Management Scheme is RMB10 million.
The duty of Custodian:	The Custodian	has the duty to	supervise	the
	investment scope, investment proportion and
	investment restriction of the entrusted asset
	according to the terms of the Asset Management
	Contract.
Expenses:	The expenses relating to the asset management
	business included

1. management fee of the Asset Management Agency;
2. custodian fee of the Custodian;
3. trading commission of entrusted assets based on the rate of brokerage services;

- 9 -

LETTER FROM THE BOARD

1. security trading fees of entrusted assets,

including but not limited to stamp duty, transfer fee, handling fee, securities management fee, etc.;

1. commissioning fees for the opening, usage, conversion, cancellation, etc. of special security accounts;
2. the fees incurred from opening the relevant accounts;
3. relevant taxes and fees;
4. litigation costs, attorney fees related to the settlement of investment disputes;
5. other expenses that may be charged under entrusted assets in accordance with the laws and regulations and the terms of the Asset Management Contract.

Of which, the Asset Management Agency shall charge RMB10,000 per year as the fixed management fee rate, while the Custodian shall charge a custodian fee rate of 0.02% per year. Under normal circumstances, the calculation method of custodian fee for entrusted assets is as follow:

H1 = E × annual custodian fee rate ÷ 365

	H1	represents the daily custodian fee
		provided for entrusted assets
	E	represents the net value of entrusted
		assets for the previous day
Term:	The Asset Management Contract comes into effect
	from the establishment date of the Asset Management
	Scheme, for a term of ten years which may be early
	terminated depending on market conditions and the
	Asset Management Contract, if so agreed by the Asset
	Management Agency and the Investor.

- 10 -

LETTER FROM THE BOARD

General Information of the Parties to the Asset Management Contract

The Company is a joint stock company incorporated in the PRC with limited liability, the A Shares and the H Shares of which are listed on the Shanghai Stock Exchange and main board of the Stock Exchange, respectively. The Group is mainly engaged in brokerage and wealth management business, investment bank business, investment management business, investment and trading business.

China Merchants Securities Asset Management Co., Ltd. is a company incorporated in the PRC with limited liability, which is mainly engaged in securities asset management business and it is a wholly-owned subsidiary of the Company.

China Merchants Bank Co., Ltd. is a joint stock company incorporated in the PRC with limited liability, and it is mainly engaged in providing customers with various wholesale and retail banking products and services, and conducting treasury businesses with proprietary purpose and on behalf of customers. As the Latest Practicable Date, China Merchants Group Limited, the controlling shareholder of the Company, held a total interest of approximately 29.97% in China Merchants Bank Co., Ltd., which is not a connected person of the Company.

Save as disclosed above, to the best knowledge and belief of the Directors having made all reasonable enquiries, the counterparties to the Asset Management Contract and their ultimate beneficial owners are independent third parties to the Group and its connected person.

BOARD CONFIRMATION

The Board is of the view that the terms of the Employee Stock Ownership Scheme and the Asset Management Contract are on normal commercial terms which are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Mr. HUO Da and Mr. XIONG Jiantao, being the Directors who can participate in the Scheme, have abstained from voting on the relevant Board resolutions. Save as disclosed above, none of the Directors have a material interest in the Employee Stock Ownership Scheme. The relevant resolutions regarding the Employee Stock Ownership Scheme have been voted and approved at the 25th meeting of the sixth session of the Board by Directors who are not connected thereto.

IMPLICATIONS UNDER THE LISTING RULES

The Employee Stock Ownership Scheme does not constitute a share option scheme under the Chapter 17 of the Listing Rules.

The Asset Management Agency will become a connected person of the Company if the number of the Subject A Shares held by the Asset Management Agency for the benefit of the connected persons exceeds 30% of the aggregate number of the Subject A Shares held by the Asset Management Agency. The Company will comply with the relevant provisions under the Listing Rules as applicable.

- 11 -

LETTER FROM THE BOARD

THE SUBMISSION TO THE EGM FOR FULL AUTHORIZATION TO THE BOARD TO DEAL WITH RELEVANT MATTERS IN RELATION TO THE EMPLOYEE STOCK OWNERSHIP SCHEME

The Board proposed the EGM to fully authorize the Board to deal with all the matters in relation to the Employee Stock Ownership Scheme, including but not limited to:

1. To formulate the detailed plan of the Employee Stock Ownership Scheme, including but not limited to, to ascertain the number of participants, the qualifications of the participants, the source of funds, the scale of the Scheme, the number and price of the Subject A Shares, the term, the lock-up period, the management pattern and other matters in accordance with the applicable laws, regulations and relevant rules of the regulatory authorities and the resolution(s) of the general meeting of the Company;
2. To adjust and deal with the relevant matters in relation to the Employee Stock Ownership Scheme (except those to be re-approved at the general meeting of the Company as required by the laws, regulations and the Articles of Association), including considering the amendment, extension, termination (including early termination) of the Employee Stock Ownership Scheme, etc. in accordance with the requirements of the regulatory authorities, the changes of policies or the market conditions;
3. To apply for all the necessary approval in relation to the Employee Stock Ownership Scheme, including but not limited to the approval, filing, registration, declaration procedures, etc. and the formulation, amendment, submission, execution, etc. of the relevant materials in accordance with relevant rules and to disclose information in accordance with the relevant laws, regulations and the listing rules of the stock exchanges at the places where the securities of the Company are listed;
4. To determine the Asset Management Agency and the Custodian of the Employee Stock Ownership Scheme and assist the Company to implement the Employee Stock Ownership Scheme in accordance with the applicable laws, regulations and relevant rules of the regulatory authorities and the resolution(s) of the general meeting of the Company;
5. To deal with all the matters in relation to the lock-up of and unlock-up of the Subject A Shares purchased by the Employee Stock Ownership Scheme;
6. To deal with other matters that are necessary for the Employee Stock Ownership Scheme;
7. Subject to the obtaining of the above-mentioned authorizations, to authorize the Board to delegate to the management of the Company to deal with items
8. 1. to (5) above in accordance with the relevant policies and procedures (except those required by the laws, regulations and the Articles of Association).

- 12 -

LETTER FROM THE BOARD

The above matters to be authorized by the EGM to the Board, if required to be approved by the Holders' Meeting, shall be submitted to the Holders' Meeting or the management committee authorized by the Holders' Meeting.

The above authorizations shall be effective from the date of the approval of the Employee Stock Ownership Scheme at the EGM until the completion of the liquidation of the Scheme.

PROPOSED APPOINTMENT OF NON-EXECUTIVE DIRECTOR

On October 15, 2019, the Board proposed to appoint Mr. GAO Hong ("Mr. Gao") as a non-executive Director. The biographical details of Mr. GAO are as follows:

Mr. GAO Hong (高宏), aged 51, has relevant working experience in financial, insurance and technology enterprises. Mr. GAO has served as the standing member of the Executive Committee of China Merchants Financial Business Unit* (招商局金融事業群╱平

台) since February 2019, the general manager of China Merchants Financial Technology Co., Ltd.* (招商局金融科技有限公司) since November 2017, and the vice general manager (chief technology officer) of China Merchants Life Insurance Company Limited since February 2017. He served as the chief technology officer of China Merchants Finance Holdings Co., Ltd.* (招商局金融集團有限公司) from February 2017 to February 2019. He successively served as the general manager of the information technology centre, an assistant general manager, and the general manager of innovation and development department of Funde Sino Life Insurance Co., Ltd.* (富德生命人壽股份有限公司) from June 2010 to January 2017 and served as the assistant general manager of Funde Insurance Holding Co., Ltd.* (富德保險控股股份有限公司) from July 2015 to January 2017; he successively acted as vice general manager (in charge of work) of the information management department and assistant general manager of the group shared service centre of China Insurance (Holdings) Company Limited from March 2005 to June 2010; he served as the general manager of the computer department in the headquarter of Taiping Life Insurance Co., Ltd. from August 2001 to March 2005; and he successively served as an engineer and the business officer of the computer department, an engineer of actuary and information department, the officer and assistant to general manager of software development office under life insurance, and assistant to general manager of the Jilin Branch of China Ping An Insurance Company* (中國平安保險公司), the name of which has been changed to Ping An Insurance (Group) Company of China, Ltd. in 2013, from November 1993 to August 2001; he served as an engineer of China Electronics Software Development Co.* (中電軟件技術開發公司) from August 1992 to November 1993 and as assistant engineer of the first engineering division of Nanjing No. 724 Research Institute* (南京724研究所) from August 1989 to August 1992.

Mr. GAO obtained a bachelor 's degree of science in computer software from the Department of Computer Science from Nanjing University in July 1989.

- 13 -

LETTER FROM THE BOARD

The appointment of Mr. GAO is subject to the approval by the EGM and the approval by the regulatory authority(ies) on his qualification as a director of a securities company. The term of office of Mr. GAO will be from the date of his appointment being approved by the EGM or the date of obtaining the approval of the regulatory authority(ies) in relation to his qualification as a director of a securities company (whichever is later) to the expiry date of the current session of the Board.

According to the diversity policy and nomination policy of the Company, the nomination committee of the Board and the Board proposed to appoint Mr. GAO as a non-executive Director of the Company after comprehensively taking into account of his skills, experience and the contributions he can make to the Company.

Mr. GAO will enter into a service contract with the Company after the approval of his appointment. During the term of his office, Mr. GAO will not receive any emoluments from the Company.

As at the Latest Practicable Date, save as disclosed above, Mr. GAO confirmed that he (1) does not hold any other positions with the Company and its subsidiaries or any directorships in any other public companies whose securities are listed on any securities market in Hong Kong or overseas in the last three years or any other major appointments and professional qualifications; (2) does not have any relationship with any Directors, Supervisors, senior management, substantial or controlling shareholders of the Company (as defined under the Listing Rules); (3) does not have any interest in the shares of the Company which are required to be disclosed pursuant to Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong); and (4) does not have any information in relation to his appointment which shall be subject to disclosure pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules.

EGM

The EGM is to be held at Marco Polo Shenzhen, 28 Fuhua 1st Road, Futian CBD, Shenzhen on Wednesday, January 15, 2020 at 10:00 a.m.. The notice convening the EGM is set out on pages N-1 to N-3 of this circular.

Last Registration Date	: On or before 4:30 p.m. on Friday, December 13,
	2019
Closure of Register of	: Monday, December 16, 2019 to Wednesday,
Members for H Shareholders	January 15, 2020 (both days inclusive)
Submission of Reply Slip	: On or before Tuesday, December 24, 2019
Submission of Proxy Form	: 10:00 a.m. on Tuesday, January 14, 2020, no
	less than 24 hours before the time
	appointed for the EGM

- 14 -

LETTER FROM THE BOARD

The register of members of the Company will be closed from Monday, December 16,

2019 to Wednesday, January 15, 2020 (both days inclusive), during which period no transfer of H Shares will be effected. All transfer documents accompanied by the relevant share certificates, shall be 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 not later than 4:30 p.m. on Friday, December 13, 2019. Purchasers of Shares who have submitted their transfer documents to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, and registered as Shareholders on the register of members of H Shares of the Company before 4:30 p.m. on Friday, December 13, 2019 are entitled to attend and vote in respect of the resolutions to be proposed at the EGM. The reply slip and the proxy form for the EGM are enclosed with this circular for despatch to the Shareholders. Shareholders intending to attend the EGM personally or by their proxies should complete and return the reply slip for attending the EGM to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited (for holders of H Shares) on or before Tuesday, December 24, 2019.

PROCEDURES FOR VOTING AT THE EGM

According to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, the chairman of the EGM will demand a poll in relation to all the proposed resolutions at the EGM in accordance with Article 124 of the Articles of Association.

None of the Shareholders shall abstain from voting in respect of any resolutions to be proposed at the EGM.

RECOMMENDATION

The Directors consider that the proposed resolutions are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends that all Shareholders to vote in favour of the resolutions to be proposed at the EGM to approve the Employee Stock Ownership Scheme and the proposed appointment of non-executive Director.

Yours faithfully,

By order of the Board

China Merchants Securities Co., Ltd.

HUO Da

Chairman

- 15 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

THE EMPLOYEE STOCK OWNERSHIP

SCHEME

OF

CHINA MERCHANTS SECURITIES CO., LTD.

(DRAFT)

October 2019

- A-1 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

STATEMENTS

The Company and all members of the board of directors of the Company warrant that the contents of the Scheme are true, accurate and complete and that there are no false records, misleading statements or material omissions.

- A-2 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

RISK WARNING

1. The employee stock ownership scheme (hereinafter referred to as the "this Employee Stock Ownership Scheme", "Employee Stock Ownership Scheme" or the "Scheme") of China Merchants Securities Co., Ltd. (hereinafter referred to as "Merchants Securities", the "Company" or "Our Company") will be entrusted to the Asset Management Agency for management upon its establishment, and will subscribe for all the shares of the Asset Management Scheme it has established. The Scheme will be implemented after the approval at the general meeting of Company.
2. Investors are advised to take caution in making any decision and be aware of investment risks.

- A-3 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

SPECIAL NOTICE

1. The Employee Stock Ownership Scheme of China Merchants Securities Co., Ltd. (Draft) is formulated by Merchants Securities in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Guiding Opinions on the Pilot Implementation of Employee Stock Ownership Schemes by Listed Companies (China Securities Regulatory Commission Announcement [2014] No. 33), Opinions on Supporting Listed Companies to Repurchase Shares (China Securities Regulatory Commission Announcement [2018] No.35), Work Guideline on Disclosure of Information of Employee Stock Ownership Schemes of Listed Companies on the Shanghai Stock Exchange, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and other applicable laws and regulations and normative documents as well as the provisions of the Articles of Association of China Merchants Securities Co., Ltd..
2. Participants of the Scheme are directors, supervisors, senior management, employees at D or above and other core cadres of the Company who have entered into labor contracts with the Company and its wholly-owned subsidiaries; the total number of participants of the Scheme shall not be more than 1,157.
3. The sources of funds of the Company's employees participating in the Scheme shall be derived from their personal legal remuneration and other self-raised funds obtained through other means permitted by laws and administrative regulations.
4. The aggregate subscription amount of participants of the Scheme shall not exceed RMB808 million (inclusive). The investment scope of the asset management scheme (hereinafter referred to as the "Asset Management Scheme") established by the Asset Management Agency entrusted by the Scheme is mainly to purchase and hold A shares of the Company.
5. The source of the Subject Shares under the Scheme shall be A Shares to be repurchased by the Company using its own funds through the centralized bidding pursuant to the resolution on the A Share Repurchase Plan by way of centralized bidding transactions, which was considered and approved at the 2019 first extraordinary general meeting, the 2019 first A shareholders class meeting and the 2019 first H shareholders class meeting. After obtaining the approval for the Scheme at the general meeting of the Company and completing the aforesaid repurchase, the Scheme will obtain the repurchased A shares of the Company through non-trade transfer method as permitted by the laws and regulations.

- A-4 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. After the Scheme was implemented, the total number of the shares held under all effective employee stock ownership schemes of the Company shall not exceed 10% of the Company's total share capital and the number of the shares corresponding to Employee Stock Ownership Scheme held by any Holders shall not, in aggregate, exceed 1% of the Company's total share capital.
2. The term of the Scheme is 10 years from the date the Scheme was considered and approved at the general meeting of the Company. The term of the Scheme can be extended upon approval at a Holders' Meeting and consideration and approval by the Board of the Company. The Employee Stock Ownership Scheme shall be automatically terminated if the term of the Scheme is not effectively extended upon expiration.
   During the term, the Scheme can be terminated in advance and Holders of the Scheme can exit the Scheme if all the assets are currencies in hand.
3. The lock-up period of the Subject Shares allotted to the Scheme shall be 36 months from the date that the Company announces the completion of registration of transfer of the Subject Shares. In the event that the Shares are derived from circumstances such as capitalization of capital reserves, bonus issue and the Scheme involved in refinancing by the Company, the above lock-up arrangement shall also be complied with. However, cash bonus attributable to shares of the Company are not subject to the aforesaid lock-up period.
4. The Scheme can only be implemented after the approval of the general meeting.
5. The shareholding structure of the Company will remain in compliance with the listing requirements after the implementation of the Scheme.

- A-5 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)
	CONTENTS
Statements . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
Risk Warning . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
Special Notice .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-4
Contents . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
Definitions . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-7

1. Background and Purpose of the Employee Stock Ownership Scheme . . . . A-9

II.	Basic Principles of the Employee Stock Ownership Scheme . . . . . . . . . . . .	A-10
III.	Participants of the Employee Stock Ownership Scheme . . . . . . . . . . . . . . .	A-11
IV.	Sources of Funds and Shares of
	the Employee Stock Ownership Scheme . . . . . . . . . . . . . . . . . . . . . . . . . .	A-12

1. Term, Lock-up Period and Dealing Restriction of

	the Employee Stock Ownership Scheme . . . . . . . . . . . . . . . . . . . . . . . . . .	A-14
VI.	Management Pattern of the Employee Stock Ownership Scheme . . . . . . . .	A-15
VII.	The Appointment of the Employee Stock Ownership Scheme Asset
	Management Agency and the Main Terms of
	the Management Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	A-16
VIII.	Holders and Holders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	A-18
IX.	Appointment and Duties of the Management Committee . . . . . . . . . . . . . .	A-21

1. Way of Participation by the Employee Stock Ownership Scheme

at the time of the Company's Fund Raising . . . . . . . . . . . . . . . . . . . . . . . A-24

XI.	The Disposal Methods of the Rights and Interests of
	the Employee Stock Ownership Scheme . . . . . . . . . . . . . . . . . . . . . . . . . .	A-25
XII.	The Amendment and Termination of
	the Employee Stock Ownership Scheme . . . . . . . . . . . . . . . . . . . . . . . . . .	A-27
XIII.	The Disposal Methods of
	the Employee Stock Ownership Scheme upon Expiry . . . . . . . . . . . . . . .	A-28
XIV.	The Implementation Procedures of
	the Employee Stock Ownership Scheme . . . . . . . . . . . . . . . . . . . . . . . . . .	A-28
XV.	Other Important Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	A-29

- A-6 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

DEFINITIONS

Unless otherwise specified, the following abbreviations used herein have the meanings set

out below:

Terms	Meanings
Merchants Securities, Company,	China Merchants Securities Co., Ltd.
our Company
Employee Stock Ownership	the Employee Stock Ownership Scheme of China
Scheme, this Employee Stock	Merchants Securities Co., Ltd.
Ownership Scheme, the
Scheme
Employee Stock Ownership	the Employee Stock Ownership Scheme of China
Scheme (Draft)	Merchants Securities Co., Ltd. (Draft) 《( 招商證券股份
	有限公司員工持股計劃（草案）》)
Asset Management Agency,	the asset management agency commissioned by the
Asset Manager, Manager	Scheme
Asset Custodian, Custodian	the asset custodian entrusted by the Scheme
Asset Management Scheme	the asset management scheme established by the
	Asset Management Agency commissioned by the
	Scheme in relation to the Scheme
Subject Shares	A-Shares of China Merchants Securities legally
	purchased and held by the Scheme
Holder(s)	the employees of the Company who actually
	contribute to Employee Stock Ownership Scheme as
	agreed by Employee Stock Ownership Scheme
Subscription Agreement	the Employee Stock Ownership Scheme Subscription
	Agreement, which signed by the employees
	participated the Scheme
senior management	general manager, deputy general manager, secretary
	to the board of the directors, chief financial officer,
	compliance officer, chief risk officer of the Merchants
	Securities and personnel recognized as senior
	management by the board of directors

- A-7 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)
CSRC	China Securities Regulatory Commission (中國證券監
	督管理 委員會)
HKSFC	the Securities and Futures Commission of Hong Kong
Shanghai Stock Exchange	The Shanghai Stock Exchange Limited
CSDC	Shanghai Branch of China Securities Depository and
	Clearing Corporation Limited
Company Law	the Company Law of the PRC 《(	中華人民共和國公司
	法》)
Securities Law	the Securities Law of the PRC 《(	中華人民共和國證券
	法》)
Guiding Opinions	Guiding Opinions on the Pilot Implementation of
	Employee Stock Ownership Schemes by Listed
	Companies (CSRC Announcement [2014] No. 33)(《關於
	上市公司實施員工持股計劃試點的指導意見》(中國證券監
	督管理委員會公告[2014] 33號))
Guideline for Information	Work Guideline on Disclosure of Information of
Disclosure	Employee Stock Ownership Schemes of Listed
	Companies on the Shanghai Stock Exchange 《( 上海證券
	交易所上市公司員工持股計劃信息披露工作指引》)
Articles of Association	the Articles of Association of China Merchants
	Securities Co., Ltd.
RMB, RMB'0,000,	Renminbi 1 Yuan, Renminbi 10,000 Yuan and Renminbi
RMB100 million	100 million Yuan

- A-8 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. BACKGROUND AND PURPOSE OF THE EMPLOYEE STOCK OWNERSHIP SCHEME
2. 1. Background of Employee Stock Ownership Scheme

Opinions on Supporting Listed Companies to Repurchase Shares 《( 關於支持 上市公司回購股份的意見》) was jointly published by CSRC, the Ministry of Finance of the PRC and the SASAC (China Securities Regulatory Commission Announcement [2018] No.35 (中國證券監督管理委員會公告[2018] 35號)) on November 9, 2018, aiming to encourage listed companies to repurchase shares to be used in equity incentives and employee stock ownership scheme according to the laws.

The 2019 first extraordinary general meeting, the 2019 first A Shareholders class meeting and the 2019 first H Shareholders class meeting of the Company convened on May 20, 2019 considered and approved the resolution on the A Share Repurchase Plan by Way of Centralized Bidding Transactions 《( 關於以集中競價交易 方式回購公司A股股份方案的議案》), in active response to the policy guidance of the national government and regulatory authorities and with an aim to stabilizing the capital market, enhancing investors' confidence in the investment of the Company, promoting the coordination between the market price of the shares and the Company's long-term inherent value and, at the same time, as well as optimizing the employee long-term incentive mechanism to maximize the value for shareholders. The Company will repurchase A Shares through self-owned funds by way of centralized bidding transactions and proposed to apply the repurchased A Shares on Employee Stock Ownership Scheme.

1. Purpose of Employee Stock Ownership Scheme

The Scheme was formulated pursuant to the requirements, such as Company Law, Securities Law, Guiding Opinions, Opinions on Supporting Listed Companies to Repurchase Shares 《( 關於支持上市公司回購股份的意見》) (China Securities Regulatory Commission Announcement [2018] No.35 (中國證券監督管理委員會公告 [2018] 35號)), Guideline for Information Disclosure, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and other applicable laws and regulations, regulatory documents as well as Articles of Association.

- A-9 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

The participants participate in the Scheme voluntarily pursuant to applicable laws and regulations, and the purposes of the Scheme are set out below:

1. 1. to further improve the corporate governance structure, establish and improve the benefit-sharing and risk-sharing mechanism among shareholders, the Company and employees, advocate the common and sustainable development concept of the Company and individual, fully arouse the enthusiasm of the Company's senior management and core talents;
   2. to attract and retain talents and business backbones, maintain the long-term and near-term interests of the Company, attract various kinds of talents in a more flexible manner, and better promote the Company's longer-term, sustainable and healthy development of the Company.
2. BASIC PRINCIPLES OF THE EMPLOYEE STOCK OWNERSHIP SCHEME
3. 1. The Principle of Compliance with Laws and Regulations
      The Company will implement the Scheme in strict compliance with the

relevant national laws and regulations, normative documents and provisions of the Articles of Association and fully implement corresponding procedures. The Company shall disclose information in a truthful, accurate, complete and timely manner and adopt strict safeguards to prevent the insider trading, market manipulation and other unlawful action of securities from happening. No person is allowed to make use of the Employee Stock Ownership Scheme for insider trading, stock market manipulation and other securities fraud.

1. The Principle of Voluntary Participation

The Company shall implement the Scheme under the principle of the Company's self-decision making and employees' voluntary participation. The Company shall not force employees to participate in the Scheme by way of apportionment and forced distribution, etc.

(III) The Principle of Risk Taking

The Holders under the Scheme are responsible for their own profits or losses at their own risks and rank pari passu with other investors.

- A-10 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. PARTICIPANTS OF THE EMPLOYEE STOCK OWNERSHIP SCHEME
2. 1. Basis for Determining Participants of the Employee Stock Ownership Scheme
      1. Scope of Participants

Participants of the Scheme shall be selected with reference to the market practice and based on the employees' job grade in the Company and their working age and performance appraisal results. The definite list will be determined according to the employees' employment status as of May 31, 2019 and their employment status as of the last payment date.

The participants of the Scheme are directors, supervisors, senior management, employees at D Level or above and other core cadres of the Company who have entered into the labour contracts with the Company or its wholly-owned subsidiaries.

2. Limitation on Participants

The employee shall not participate in the Employee Stock Ownership Scheme if any of the following circumstances applies:

1. the employee who has been publicly condemned or declared unfit by a stock exchange in the last three years;
2. the employee who has been imposed administrative penalty by the CSRC for serious violation of laws or regulations in the last three years;
3. the employee who has been subject to criminal liability imposed by a judicial organization due to the leakage of national or corporate secrets, corruption, theft, embezzlement, bribe-taking,bribe-giving, negligence, malfeasance and other actions in violation of national laws and regulations in the last three years;
4. the situation which is deemed by the board of directors that the employee fails to become a Holder of the Scheme;
5. other situations as stipulated by relevant laws, regulations or normative documents that the employee fails to become a Holder of the Scheme.

- A-11 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. Participants' subscription of this Employee Stock Ownership Scheme

According to the abovementioned standards, the total number of participants of the Scheme shall not be more than 1,157 and the aggregate amount of Employee Stock Ownership Scheme shares available for subscription shall not exceed RMB808 million (inclusive). Of which, the aggregate amount available for subscription by the directors, supervisors and senior management of the Company (being HUO Da, XIONG Jiantao, ZHOU Linda Lei, YIN Hongyan, HE Min, XIONG Zhigang, DENG Xiaoli, LI Zongjun, WU Huifeng, ZHAO Bin, HU Yu, WU Guangyan, XIE Jijun) is approximately RMB62 million, and the aggregate entitlements in the Employee Stock Ownership Scheme available for subscription represents approximately 8% of the aggregate entitlements in this Employee Stock Ownership Scheme shares; while the aggregate amount available for subscription by other employees is approximately RMB746 million, and the aggregate entitlements in this Employee Stock Ownership Scheme available for subscription represents approximately 92% of the aggregate entitlements in this Employee Stock Ownership Scheme. The amount of Employee Stock Ownership Scheme subscribed by the participants and the amount of corresponding shares shall be subject to the actual performance at that time.

The number of the Subject Shares corresponding to Employee Stock Ownership Scheme held by any Holders shall not, in aggregate, exceed 1% of the Company's total share capital.

IV. SOURCES OF FUNDS AND SHARES OF THE EMPLOYEE STOCK OWNERSHIP

SCHEME

1. Source of funds of the Employee Stock Ownership Scheme

The funds of the Scheme shall be derived from their personal legal remuneration and other self-raised funds obtained in other manners permitted by laws and administrative regulations.

After the establishment of the Scheme, the Asset Manager was entrusted to manage it and fully subscribe the Asset Management Scheme. The investment scope of the Asset Management Scheme is mainly to purchase and hold A shares of the Company.

Employees must pay the full subscription monies based on the subscribed entitlements determined in the Subscription Agreement in a timely manner. In the event that a Holder fails to pay the full subscription monies in a timely manner, the relevant subscription right will automatically lapse. The unsubscribed shares of the aforesaid employees may be subscribed by other qualified participants.

- A-12 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. The Source and Price of Shares under the Employee Stock Ownership Scheme

Pursuant to the resolution on the A Share Repurchase Plan by Way of Centralized Bidding Transactions 《( 關於以集中競價交易方式回購公司A股股份方案的 議案》) passed on the 2019 first extraordinary general meeting, the 2019 first A Shareholders class meeting and the 2019 first H Shareholders class meeting of the Company, the Company will repurchase A Shares using its own funds through the centralized bidding. The source of shares under the Scheme is the aforesaid shares repurchased by the Company.

After the Scheme is approved on general meeting of the Company and the completion of the aforesaid repurchase, the Scheme will obtain the repurchased A shares of the Company through non-trade transfer method as permitted by laws and regulations.

In principle, the price that the Employee Stock Ownership Scheme purchased the repurchased shares is equal to the average price of such repurchase (including transaction fees).

(III) The Scale of the Employee Stock Ownership Scheme

The total subscription amount of the Scheme participants shall not exceed RMB808 million (inclusive). The final scale of the Scheme will be determined according to the capital scale of employees participating in the Scheme and the specific amount and price of the Company's shares repurchased. Given that currently the number of the shares of the Company available for purchasing under the Scheme is still uncertain, the ultimate number of the shares held under the Scheme depends on then actual implementation. The Company will make disclosure in time to fulfill its obligations pursuant to relevant regulations.

After the Scheme was implemented, the total number of shares held under all effective employee stock ownership schemes of the Company shall not exceed 10% of the Company's total share capital and the total number of the shares of the Company corresponding to Employee Stock Ownership Scheme held by any Holder shall not, in aggregate, exceed 1% of the Company's total share capital.

- A-13 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. TERM, LOCK-UP PERIOD AND DEALING RESTRICTION OF THE EMPLOYEE STOCK OWNERSHIP SCHEME
2. 1. Term of the Employee Stock Ownership Scheme

The term of the Employee Stock Ownership Scheme shall be 10 years from the date when Employee Stock Ownership Scheme is approved on the general meeting of the Company. The term of the Scheme can be extended upon approval at a Holders' Meeting and consideration and approval by the Board of the Company. The Employee Stock Ownership Scheme shall be automatically terminated if the term of the Scheme is not effectively extended upon expiration.

1. Lock-upperiod of the Employee Stock Ownership Scheme

The lock-up period of the Subject Shares allotted to the Scheme shall be 36 months from the date the Company announces the completion of registration of transfer of the Subject Shares. In the event that the Shares are derived from circumstances such as capitalization of capital reserves, bonus issue and the Scheme involved in matters related to refinancing by the Company, the above lock-up arrangement shall also be complied with. However, cash bonus attributable to shares of the Company are not subject to the aforesaid lock-up period.

(III) Unlocking the Employee Stock Ownership Scheme

The Subject Shares under Employee Stock Ownership Scheme will be one-off unlocked upon the lock-up period expires.

(IV) Dealing Restriction of the Employee Stock Ownership Scheme

No shares of the Company shall be traded under the Employee Stock Ownership Scheme during the following periods:

1. The period starting from 60 days prior to the convening of the Company's board of directors' meeting for the consideration of annual report to the date of disclosure of the annual report (both days inclusive);
2. The period starting from 30 days prior to the convening of the Company's board of directors' meeting for the consideration of quarterly or interim report to the date of disclosure of the quarterly or interim report (both days inclusive);

- A-14 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

3. 10 days prior to the release of the Company's results warning or preliminary report (both days inclusive);

Any trading of the Company's shares is prohibited during the periods referred to above 1-3, including the extension of the Company's results announcement;

1. The period starting from the date when a material event, which may significantly affect the Company's share price, occurs or is in the process of decision-making to 2 trading days after the event being disclosed in accordance with laws;
2. Other periods stipulated by the CSRC, the HKSFC and the stock exchanges at the place where the securities of the Company are listed.

VI. MANAGEMENT PATTERNS OF THE EMPLOYEE STOCK OWNERSHIP SCHEME

1. The Management Patterns

The Employee Stock Ownership Scheme is governed by the Holders' Meeting; the Employee Stock Ownership Scheme will set up a management committee, which is responsible for the day-to-day management of the Employee Stock Ownership Scheme and exercises the rights of shareholders on behalf of the Holders; the Board of the Company is responsible for drawing up the Scheme and handling other related matters of the Employee Stock Ownership Scheme within the scope authorized by the general' meeting.

The Employee Stock Ownership Scheme entrusts the Asset Management Agency to set up the Asset Management Scheme for the investment and operation of the Employee Stock Ownership Scheme.

1. The Asset Management Agency

The Asset Management Agency is the entrusted management institution of the Scheme. It shall have the asset management qualification that meets the requirements of relevant laws and regulations, and set up the Asset Management Scheme to buy and hold the Company's shares by the means as permitted by applicable laws and regulations.

The Asset Management Agency shall carry out the related work of shares trading, dividend and interest payment, taxes and fees payment according to the Asset Management Contract of the Employee Stock Ownership Scheme. When purchasing or selling the Subject Shares, the Asset Management Agency must strictly abide by the market trading rules, the provisions of the CSRC, the HKSFC and the stock exchanges at the place, where the securities of the Company listed concerning the prohibition of shares trading during the sensitive period of information, and is strictly prohibited from using any insider information for trading.

- A-15 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

VII. THE APPOINTMENT OF THE EMPLOYEE STOCK OWNERSHIP SCHEME ASSET MANAGEMENT AGENCY AND THE MAIN TERMS OF THE MANAGEMENT CONTRACT

1. Appointment of the Asset Management Agency
2. 1. The general meeting of the Company authorizes the board of directors and the board of directors authorizes the management to appoint the Asset Management Agency of the Scheme. The Company intends to appoint China Merchants Securities Asset Management Co., Ltd. as the management institution of the Employee Stock Ownership Scheme. After the establishment of the Management Committee under the Scheme, the Management Committee shall be responsible for the replacement of the Employee Stock Ownership Scheme Asset Management Agency.
   2. The Company will enter into the Asset Management Contract and related agreement documents with China Merchants Securities Asset Management Co., Ltd. on behalf of the Employee Stock Ownership Scheme to stipulate the rights and obligations, to safeguard the legitimate rights and interests of the holders under the Employee Stock Ownership Scheme, and to ensure independence and safety of assets under the Employee Stock Ownership Scheme. Relevant fees incurred by the Asset Management Agency for management of the assets under Employee Stock Ownership Scheme shall be borne by the Employee Stock Ownership Scheme.

1. Principal Terms of the Asset Management Agreement
2. 1. Name of the Asset Management Scheme: CMS Asset Management - CMS No.1 Employee Stock Ownership Scheme (single Asset Management Scheme)
   2. Investor: China Merchants Securities Co., Ltd., (on behalf of the employees)
   3. Manager: China Merchants Securities Asset Management Co., Ltd.
   4. Custodian: China Merchants Bank Co., Ltd., Shenzhen Branch
   5. Investment targets: The Asset Management Scheme mainly invests in the shares issued by China Merchants Securities Co., Ltd. (stock code: 600999, stock name: China Merchants Securities) as prescribed in the Employee Stock Ownership Scheme. Idle capital can be invested in bank deposits and money market funds.
   6. Term: The term of the Asset Management Scheme is 10 years, and may be early terminated depending on market conditions and the contract, if so agreed between the Manager and the Investor.

- A-16 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. Calculation method, calculation standard and payment method of the fees:
2. 1. Management fee of the Manager: to be determined under the Asset Management Agreement to be executed in due course;
   2. Custodian fee of the Custodian: to be determined under the Asset Management Agreement to be executed in due course;
   3. Other fees
   4. 1. Trading commission for entrusted assets based on the rate of brokerage services;
      2. Securities trading fees of entrusted assets, including but not limited to stamp duty, transfer fee, handling fee, securities management fee, etc.;
      3. Commissioning fees for the opening, usage, conversion, cancellation, etc. of special securities account;
      4. Opening fees for related accounts;
      5. Relevant taxes and fees;
      6. Litigation costs, attorneys' fees related to the settlement of investment disputes;
      7. Other expenses that may be charged under entrusted assets in accordance with the laws and regulations and the terms of the Asset Management Contract.

The abovementioned fees shall be charged to expense for the period in which they are incurred based on the amounts actually incurred and paid out of the entrusted assets for such period by the Custodian in accordance with the instructions of the Manager under relevant laws and regulations and provisions in relevant contracts.

4. Taxation

The tax obligations of all taxable entities involved in the course of operation of the Asset Management Scheme shall be borne by them in accordance with the state's tax laws and regulations. The entrusted property and assets investor shall fulfill tax obligations in accordance with the requirements of the applicable laws and regulations.

- A-17 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

VIII. HOLDERS AND HOLDERS' MEETING

1. The rights and obligations of Holders

The Holders of the Scheme represent employees actually participating the Employee Stock Ownership Scheme and being entitled to the relevant equity interests.

The Holders of the Scheme should be entitled to the following rights:

1. Attending the Holders' Meeting and being entitled to the voting rights at the Holders' Meeting based on their respective entitlements to the Employee Stock Ownership Scheme;
2. Being entitled to the shareholding entitlements and respective rights and interests of the Scheme according to the provisions of the Scheme;
3. Other rights as prescribed by the laws, regulations and the Scheme.
   Holders of the Scheme shall have the following obligations:

1. 1. Contributing capital within the agreed period according to their amount of subscription in the Scheme;
   2. Assuming the risks associated with the Scheme according to their entitlements in the Scheme;
   3. Other obligations as prescribed by the laws and regulations and the Scheme.
2. Functions and powers of the Holders' Meeting
   The Holders' Meeting is the authority mechanism of the Employee Stock

Ownership Scheme and has the Management Committee established thereunder.

The Holders' Meeting shall be entitled to exercise the following functions and powers:

1. Electing and removing members of the Management Committee;
2. Considering the amendment, termination and extension of the term of the Employee Stock Ownership Scheme;
3. Authorizing the Management Committee or the authorized Asset Management Agency to exercise shareholders' rights;
4. Authorizing the Management Committee to supervise the daily administration of the Employee Stock Ownership Scheme;

- A-18 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. 1. Authorizing the Management Committee to change the Asset Management Agency and formulate and revise relevant administrative rules;
   2. Authorizing the Management Committee to take charge of the contact and communication with the Asset Management Agency;
   3. Authorizing the Management Committee to determine whether to be involved in matters related to refinancing by ways of additional public offering, rights issue and issue of convertible bonds by the Company;
   4. Other functions and powers that may be exercised by the Holders' Meeting of the Employee Stock Ownership Scheme as stipulated by laws and regulations or the CSRC, the HKSFC and the stock exchange of places where the Company's securities are listed.
2. Procedures for convening Holders' Meetings
3. 1. The first Holders' Meeting shall be convened and presided over by the chairman of the Company or his authorized person and subsequent Holders' Meetings shall be convened by the Management Committee and presided over by the director of the Management Committee; when the director of the Management Committee fails to perform his duties, he shall appoint a member of the Management Committee to preside over the meeting.
   2. In the event of any of the following situations, a Holders' Meeting shall be convened:
   3. 1. the amendment and termination of the Employee Stock Ownership Scheme and extension of the term of the Employee Stock Ownership Scheme;
      2. more than three members of the Management Committee leaving office or failing to perform his/her duties for three consecutive months or otherwise that are unfit for the job of a member of the Management Committee;

- A-19 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. when the Holders with their shares in aggregate amounting to 30% or above require to convene the meeting;
2. other matters having such significant impact on the rights and obligations of the Holders of the Employee Stock Ownership Scheme that a Holders' Meeting needs to be convened.

3. In convening a Holders' Meeting, the convener of the meeting shall issue a notice of meeting at least three days (inclusive) prior to the meeting (where there is an urgent matter, the foregoing requirement of three days notification period may be waived）and send it to all Holders by direct delivery, post, fax and electronic mail or other means. The notice of meeting shall at least include the following details:

1. time and place of the meeting;
2. way of holding the meeting;
3. matters (proposals) to be considered in the meeting;
4. the convener and chairman of the meeting and the proposer of interim meeting and his written proposals;
5. meeting materials required for voting and the specified arrangement including way and time for voting;
6. requirements for the Holders to attend the meeting in person or appoint other Holders to attend the meeting on his behalf;
7. contact person and contact information;
8. date of issuance of the notice.

(IV) Way of the Holders' Meeting

The Holders' Meeting can be convened in manner of on-site, telephone, video, telecommunication voting, online voting and so on.

The Holders shall attend the Holders' Meeting in person and vote or appoint the proxies in writing to attend and vote on their behalf. The expenses of travel, board and lodging, etc. incurred by Holders and their proxies to attend the Holders' Meeting shall be borne by Holders.

- A-20 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. Procedure for voting at the Holders' Meeting
2. 1. After each proposed resolution has been fully reviewed by Holders, it shall be submitted to Holders for voting in accordance with the voting method and the voting period as stipulated in the notice of the meeting.
   2. Voting shall be made in effective methods such as voting in writing on-site, voting in writing through communication (including mail, fax, etc.) or online voting.
   3. Under the Scheme, each entitlement held by a holder shall have one vote.
   4. Holders may choose to vote for, against or abstain in any resolution. Holders attending the meeting shall select one of the aforesaid voting options, and any vote with no option or two or more options indicated will be deemed as abstention. Any vote made by Holders after the counting of voting results or lapse of prescribed voting period shall not be counted.
   5. Each proposed resolution shall only become a valid resolution at the Holders' Meeting after being passed by more than 50% (excluding 50%) entitlement of the Scheme held by all Holders.
   6. In the event that a resolution of the Holders' Meeting must be submitted to the Board and the general meeting of the Company for consideration, it shall be submitted to the Board and the general meeting of the Company for consideration in accordance with the provisions of the Articles of Association.

IX. APPOINTMENT AND DUTIES OF THE MANAGEMENT COMMITTEE

1. A Management Committee shall be set up for the Scheme to take charge of the Employee Stock Ownership Scheme and its daily management, and has the right to authorise the Asset Management Agency to exercise the shareholders' rights on behalf of holders.

1. The Management Committee comprises five members with one officer of the Management Committee. All members of the Management Committee shall be held by Holders and elected at the Holders' Meeting. The officer of the Management Committee shall be elected by more than half of all members of the Management Committee. The term of office of members of the Management Committee shall be the term of the Scheme (including the extended term).

- A-21 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. Members of the Management Committee have the following fiduciary duties to the Employee Stock Ownership Scheme in accordance with laws, administrative regulations and the relevant management measures:
2. 1. Not to take advantage of their position and authority to accept bribes or other illegal income; not to occupy any property of the Employee Stock Ownership Scheme;
   2. Not to misappropriate funds of the Employee Stock Ownership Scheme;
   3. Without the consent of the Management Committee, not to open personal account under his or her own name or other people's names with the assets or funds of the Employee Stock Ownership Scheme as the deposits;
   4. Not to violate the provisions of the Employee Stock Ownership Scheme to lend the funds of the Employee Stock Ownership Scheme to other persons or provide guarantee for other persons with the properties of the Employee Stock Ownership Scheme without the consent of the Holders' Meeting;
   5. Not to take advantage of their positions and authority to jeopardize the interests of the Employee Stock Ownership Scheme. Where a member of the Management Committee causes any loss to the Employee Stock Ownership Scheme due to breach of his or her fiduciary duties, such a member shall be liable for the loss.

(IV) The Management Committee shall discharge the following functions and powers:

1. Convening the Holders' Meetings;
2. Exercising shareholders' rights on behalf of the Holders or authorizing the Asset Management Agency to exercise the shareholders' rights on their behalf;
3. Implementing the daily management of the Employee Stock Ownership Scheme on behalf of all Holders, and formulating relevant management rules;
4. Being responsible for contacting with the Asset Management Agency;
5. Registering for the units of the Employee Stock Ownership Scheme;
6. Deciding whether or not to participate in financing events of the Company such as additional issuance, allotment of Shares or the issuance of convertible bonds;

- A-22 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. 1. Managing the allocation of benefits of the Employee Stock Ownership Scheme;
   2. Other responsibilities as delegated by the Holders' Meeting.
2. The officer of the Management Committee shall discharge the following functions and authority:
3. 1. Presiding over the Holders' Meetings, convening and presiding over the Management Committee meetings;
   2. Supervising and inspect the implementation of the resolutions of the Holders' Meeting(s) and the Management Committee meeting(s);
   3. Other functions and authority as delegated by the Management Committee.

(VI) The Management Committee meeting shall be convened occasionally by the officer of the Management Committee. A written notice of meeting shall be sent out to all members of the Management Committee two days prior to the convention of the meeting.

(VII) Extraordinary meeting of Management Committee could be proposed to be convened by holder(s) representing 30% or more of the entitlement and 50% or more of the members of the Management Committee. Officer of the Management Committee shall convene and preside over the extraordinary meeting of Management Committee within five days after receiving the proposal.

(VIII) Extraordinary meetings of Management Committee can be convened through sending notice by e-mail, by fax, in person etc.

(IX) A notice of meeting of the Committee shall include the following contents:

1. the date and venue of the meeting;
2. the duration of the meeting;
3. the reasons for and agenda of the meeting;
4. the date of dispatch of the notice.

- A-23 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. A Management Committee meeting shall only be held when more than half of the members are present. Meeting resolutions shall be valid only upon obtaining approval from more than half of all members of the Management Committee. Management Committee meetings shall implement a one-personone-vote system.

(XI) Voting for resolutions of the Management Committee meetings shall be conducted by way of open ballot. Provided that members of the Management Committee can fully express their views, resolutions of the Management Committee meetings can be voted on and passed by means of fax, e-mail, etc, and shall be signed by members of the Management Committee attending the meeting.

(XII) The meeting of the Management Committee can be convened in manner of on-site, telephone, video, telecommunication voting and so on. The members of the Management Committee shall present the meeting in person. Where a member is unable to attend a meeting for any reason, he/she may appoint another member of the Management Committee by a written power of attorney to attend the meeting on his/her behalf. The power of attorney shall set out the name of the proxy, subject matters of representation, scope of the authorization and valid period, with the signature or seal of the appointer. A member of the Management Committee who attends a meeting on behalf of another member shall exercise the member 's rights within the scope of authorization. A member of the Management Committee who fails to attend a meeting of the Management Committee and who has not appointed a representative to do so shall be deemed to have waived his/her voting rights in respect of that meeting.

(XIII) The Management Committee shall keep minutes relating to the matters resolved at the meeting, and the members of the Management Committee present at the meeting shall sign the minutes.

1. WAY OF PARTICIPATION BY THE EMPLOYEE STOCK OWNERSHIP SCHEME AT THE TIME OF THE COMPANY'S FUND RAISING

When the Company raises funds through rights issue, placement, convertible bonds or other means during the term of the Scheme, the Employee Stock Ownership Scheme may participate pursuant to the number of share placement or the preferential placement proportionate to its shareholding. The Management Committee shall determine if the Scheme participates in such fund raising or not as well as the funding in case of participating.

- A-24 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

XI. THE DISPOSAL METHODS OF THE RIGHTS AND INTERESTS OF THE EMPLOYEE STOCK OWNERSHIP SCHEME

The assets of Employee Stock Ownership Scheme are independent from those of the Company and the Asset Management Agency. Neither the Company nor the Asset Management Agency could classify the assets of Employee Stock Ownership Scheme as their own assets. Assets and gains obtained from the operation, utilization of the Employee Stock Ownership Scheme or otherwise are classified into the assets of the Employee Stock Ownership Scheme.

1. Disposal of the equity interests of the Employee Stock Ownership Scheme

During the term of the Scheme, except in the event that the disposal is otherwise stipulated in the Scheme or required by effective judicial adjudication, the Holders shall neither pledge or secure, create guarantee over, settle debt with, nor transfer or otherwise dispose the entitlements held by them in the Employee Stock Ownership Scheme.

1. The disposal measures for the Holder who is not eligible to participate in the Employee Stock Ownership Scheme during the term of the Scheme
   1. In the event of leaving office, retirement, disability, incapacity, death and other circumstances of the Holder during the lock-up period of the Scheme, no change shall be made to his/her entitlements under the Scheme and the Holder 's entitlements in the Employee Stock Ownership Scheme shall be subject to the lock-up period of the Scheme and other relevant arrangements. The above circumstances include:
2. 1. the Holder leaves office due to illness, disability, incapacity or other reasons;
   2. the Holder retires due to reaching the age of retirement as set out by the requirement in the PRC;
   3. the Holder dies and his/her entitlements under the Scheme shall be inherited by his/her lawful successor.

Upon the expiry of the lock-up period, the above Holder or his/her lawful successor may apply for withdrawal and the Asset Management Agency shall sell the Shares corresponding to the entitlements held by the Holder as stipulated under the Scheme and transfer the proceeds and related income (if any) to the dedicated account for the Employee Stock Ownership Scheme after deducting the relevant expenses in compliance with the laws. The management committee shall allocate the corresponding equities according to the entitlements under the Scheme held by the Holder.

- A-25 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. 1. If aforesaid circumstances occur upon the expiry of the lock-up period of the Scheme, the holder or his/her lawful successor may apply for withdrawal and the Asset Management Agency shall sell the shares corresponding to the entitlements held by the holder as agreed under the Scheme and transfer the proceeds and related income (if any) to the dedicated account for the Employee Stock Ownership Scheme after deducting the relevant expenses according to laws. The Management Committee shall allocate the corresponding equities according to the share of the Scheme held by the Holder.
2. Holder's Income Distribution
3. 1. During the lock-up period, the Holder shall not require for allocation of equities of the Scheme.
   2. During the lock-up period, when the Company capitalizes its capital reserves to increase its share capital, distributes share dividends or refinances, the newly acquired shares attributable to shares of the Company held by the Scheme are locked up together, and may not be sold in the secondary market or disposed of in other ways. The unlocking period of such new shares is the same as that of the corresponding shares.
   3. During the lock-up period, when the Company distributes share dividends, the cash dividends attributable to shares of the Company held by the Scheme will firstly be applied to pay the management fee in principle.
   4. Upon the expiry of the lock-up period of the Scheme, the holder may apply for withdrawal and the Asset Management Agency shall sell the shares as agreed under the Asset Management Contract. The Asset Management Agency shall transfer the proceeds and related income (if any) to the dedicated account for the Employee Stock Ownership Scheme after deducting the relevant expenses according to laws. The Management Committee shall allocate the corresponding equities according to the share of the Scheme held by the holder.
   5. Upon the expiry of the lock-up period and prior to the disposal of relevant shares by the Asset Management Scheme, such shares shall continue to be held by the Asset Management Scheme in accordance with the law and individual participants may not dispose of or instruct the Asset Management Agency to sell such shares.

- A-26 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

XII. THE AMENDMENT AND TERMINATION OF THE EMPLOYEE STOCK OWNERSHIP SCHEME

1. Modification of the Employee Stock Ownership Scheme

During the term of the Scheme, subject to the authorisation of the general meeting of shareholders, the management committee may propose amendments to the Employee Stock Ownership Scheme with reference to the actual conditions of the Company and pursuant to applicable laws, regulations and rules issued by relevant regulatory authorities. Such proposed amendments can only come into effect upon being considered and approved in the Holders' meeting and meeting of the Board of the Company.

1. Termination of the Employee Stock Ownership Scheme

In any of the following cases, the Scheme shall be terminated in accordance with the requirements of relevant laws, regulations and normative documents:

1. To continue to implement the Scheme will result in non-compliance with the state's laws, regulations or normative documents from time to time;
2. The Company faces material operational difficulties and the termination of the Scheme has been considered and approved in the "Holders' meeting" and a meeting of the Board of the Company;
3. There are material changes in the market or there are other matters of significance encountered by the Company and the termination of the Scheme has been considered and approved in Holders' meeting and a meeting of the Board of the Company;
4. To continue to implement the Scheme will cause the shareholding percentage of all the Holders in aggregate or the total shareholding percentage of a single holder under the Scheme to exceed relevant limits prescribed by relevant laws and regulations and the termination of the Scheme has been considered and approved in a meeting of the Holders of the Scheme and a meeting of the Board of the Company;
5. The expiry of the term of the Scheme upon which the Scheme shall terminate automatically;

- A-27 -

APPENDIX	EMPLOYEE STOCK OWNERSHIP SCHEME OF
	CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

1. After the expiry of the lock-up period of the Scheme, if the assets under the Employee Stock Ownership Scheme are all monetary assets, the Scheme can be terminated and liquidated early;
2. Other circumstances where termination of the Scheme is required by relevant laws, regulations and normative documents and the rules of stock exchange where the securities of the Company are listed.

XIII. THE DISPOSAL METHODS OF THE EMPLOYEE STOCK OWNERSHIP SCHEME UPON EXPIRY

In the event of expiry or early termination of the Scheme, the liquidation process shall be completed within 15 working days after such expiry or early termination. After deducting charges including management fees and custodial fees, the Asset Management Agency shall transfer the assets under the Employee Stock Ownership Scheme to the special account for Employee Stock Ownership Scheme of the Company in the form of monetary assets and allocate such assets in accordance with the proportion of shareholding of the participants of the Scheme as prescribed in the Asset Management Agreement.

Upon the expiry of the term of the Scheme, if the assets held under the Asset Management Scheme still contain Subject Shares, the Management Committee and the Asset Management Agency shall determine the disposal methods through consultation.

XIV. THE IMPLEMENTATION PROCEDURES OF THE EMPLOYEE STOCK OWNERSHIP SCHEME

1. The Board of the Company deliberates the Employee Stock Ownership Scheme (Draft) and relevant resolutions. The independent directors issue their independent opinions on whether the Scheme is beneficial for the sustainable development of the Company, impairs the interests of the Company and shareholders as a whole, or forced employees to participate in the Scheme by means of apportionment, forced distribution and other methods.

1. The board of supervisors of the Company issues the opinions on whether the Scheme is beneficial for the sustainable development of the Company, impairs the interests of the Company and shareholders as a whole, or forced employees to participate in the Scheme by means of apportionment, forced distribution and other methods.

1. As at the date of approving the Employee Stock Ownership Scheme (Draft) and relevant resolutions by the board of directors, the Company will publish the resolutions of the Board, the Employee Stock Ownership Scheme (Draft) and its summary, opinions from the independent directors and supervisors and H Shares announcements, etc..

- A-28 -

APPENDIX EMPLOYEE STOCK OWNERSHIP SCHEME OF CHINA MERCHANTS SECURITIES CO., LTD. (DRAFT)

(IV) The Company convenes a staff congress to solicit the views of employees.

1. The legal opinion on the Scheme issued by the law firm engaged by the Company.

(VI) The Company issues the notice of convening a general meeting and publishes the legal opinion before holding of the general meeting held for deliberating the Employee Stock Ownership Scheme.

(VII) The Company convenes a general meeting to deliberate the Employee Stock Ownership Scheme (Draft) and its summary and relevant resolutions. The voting of the general meeting will be taken by the combination of physical voting and network voting.

(VIII) The Holders of the Scheme convene a Holders' meeting to elect the management committee for specifying the specific matters in respect of implementation of the Employee Stock Ownership Scheme.

(IX) To perform the other procedures required by the CSRC, the HKSFC, the stock exchanges on which the securities of the Company are listed, and relevant component authorities.

XV. OTHER IMPORTANT MATTERS

1. The Company will disclose the implementation of the Employee Stock Ownership Scheme in periodic reports for the reporting periods in accordance with relevant requirements.

1. The Company will implement the matters in respect of finance, accounting treatment and taxation in accordance with relevant requirements of financial systems, accounting standards and taxation systems.

1. The Employee Stock Ownership Scheme approved by the Board of the Company and the general meeting shall not constitute a commitment of employment period to an employee by the Company. The employment between the Company and a holder shall be performed under the labor contract entered into by them.

(IV) The Scheme is prepared and compiled by the Board of the Company, and shall come into effect after being approved at the general meeting of the Company.

1. The right to interpretation of the Scheme shall be reserved by the Board of the Company.

- A-29 -

NOTICE OF EGM

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

(Stock Code: 6099)

NOTICE OF THE 2020 FIRST EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2020 first extraordinary general meeting (the "EGM") of China Merchants Securities Co., Ltd. (the "Company") will be held at Marco Polo Shenzhen, 28 Fuhua 1st Road, Futian CBD, Shenzhen on Wednesday, January 15, 2020 at 10:00 a.m. to consider and approve the following resolutions:

ORDINARY RESOLUTIONS

1. To consider and approve the resolution in relation to the Employee Stock Ownership Scheme of China Merchants Securities Co., Ltd. (Draft) and its summary
2. To consider and approve the resolution in relation to the submission to the general meeting of the Company to authorize the Board to handle related matters of the Employee Stock Ownership Scheme of the Company
3. To consider and approve the resolution in relation to the election of Mr. GAO Hong as a non-executive Director

By order of the Board

China Merchants Securities Co., Ltd.

HUO Da

Chairman

Shenzhen, the PRC

November 29, 2019

- N-1 -

NOTICE OF EGM

Notes:

1. Eligibility for attending the EGM and date of registration of members
2. 1. The register of members will be closed from Monday, December 16, 2019 to Wednesday, January 15, 2020 (both days inclusive), during which period no transfer of H Shares will be effected. All transfer documents accompanied by the relevant share certificates, shall be lodged with the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Friday, December 13, 2019. Holders of Shares who have submitted their transfer documents to the Company's H Share registrar and registered as Shareholders on the register of members of H Shares of the Company before 4:30 p.m. on Friday, December 13, 2019 are entitled to attend and vote in respect of the resolutions to be proposed at the EGM.
   2. Further announcement will be made by the Company in the PRC regarding the record date and arrangements for holders of A Shares of the Company who are entitled to attend the EGM.
3. Proxy
4. 1. A Shareholder who is entitled to attend and vote at the EGM may appoint one or more proxy(ies) to attend and vote on his/her behalf. A proxy need not be a Shareholder of the Company. A proxy of a Shareholder who has appointed more than one proxy may only vote by poll.
   2. If a Shareholder wishes to appoint his/her proxy(ies) to attend the EGM, the instrument appointing a proxy shall be in writing under the hand of the appointor or his/her attorney duly authorized in writing, or if the appointor is a legal entity, either under seal or signed by a director or duly authorized attorney. If the instrument is signed by an attorney of the appointor, the power of attorney authorizing the attorney to sign or other document of authorization shall be notarized.
   3. In order to be valid, for holders of H Shares, the notarized power of attorney or other document of authorization and the form of proxy shall be delivered to Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not less than 24 hours before the time appointed for the EGM.
5. Registration procedures for attending the EGM
6. 1. A Shareholder attending in person should present valid proof of identity or stock account card when attending the EGM. In the case of attendance by proxy, the proxy should present valid proof of identity and the proxy form(s) of the Shareholder.
   2. If a Shareholder is a legal person, its legal representative should present his/her proof of identity and valid proof of its capacity as a legal representative. In the case of attendance by proxy of the legal representative, the proxy should present his/her proof of identity and a written letter of authorization duly issued by such legal representative when attending the EGM.
   3. Shareholders of the Company who intend to attend the EGM in person or by their proxies should complete and return the reply slip for attending the EGM to Computershare Hong Kong Investor Services Limited (for holders of H Shares) at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong on or before Tuesday, December 24, 2019.

- N-2 -

NOTICE OF EGM

1. Voting by poll
   According to Rule 13.39(4) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, any vote of shareholders at a shareholders' general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, the chairman of the EGM will demand a poll in relation to the proposed resolutions at the EGM in accordance with Article 124 of the Articles of Association of the Company.
2. Miscellaneous
3. 1. Shareholders who attend the EGM in person or by proxy shall bear their own travelling and accommodation expenses.
   2. The contact details of the EGM are as follows:

Computershare Hong Kong Investor Services Limited

Address:	Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East,
	Wanchai, Hong Kong
Telephone:	(852) 2862 8555
Fax:	(852) 2865 0990
The Company
Contact address:	No. 111, Fuhuayi Road, Futian District, Shenzhen,
	Guangdong Province, the PRC
	General office of China Merchants Securities Co., Ltd.
Contact person:	SHANG Zhe, ZHANG Xiaoling and SUN Ya
Contact number:	(86) 755-8308 1596, (86) 755-8296 0432 and (86) 755-8308 1580
Fax:	(86) 755-8294 4669
IR email:	[e-mail]

1. For details of the resolutions to be submitted for consideration and approval at the EGM, please refer to the circular of the Company published in relation to the EGM on November 29, 2019.

As at the date of this notice, the executive directors of the Company are Mr. HUO Da and Mr. XIONG Jiantao; the non-executive directors of the Company are Ms. SU Min, Mr. SU Jian, Mr. XIONG Xianliang, Ms. PENG Lei, Mr. HUANG Jian, Mr. WANG Daxiong and Mr. WANG Wen; and the independent non-executive directors of the Company are Mr. XIANG Hua, Mr. XIAO Houfa, Mr. XIONG Wei, Mr. HU Honggao and Mr. WONG Ti.

- N-3 -