SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

 

Filed by Registrant [X]

Filed by Party other than the Registrant

 

Check the appropriate box:

 

[   ] Preliminary Proxy Statement

[   ] Confidential for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[   ] Definitive Additional Materials

[   ] Soliciting Material Pursuant to §240.14a-12

 

JPMorgan China Region Fund, Inc.

(Name of Registrant as Specified in Its Charter)

 

_______________________________________

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[   ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11

 

(1)Title of each class of securities to which transaction applies: ___________________________
(2)Aggregate number of securities to which transaction applies: ____________________________
(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee is calculated and state how it was determined):_______________
(4)Proposed maximum aggregate value of transaction:_________________________________________
(5)Total fee paid:_______________________________________________________________________

 

[   ] Fee paid previously with preliminary materials.

 

[   ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)Amount previously paid:______________________________________________________________
(2)Form, Schedule or Registration Statement No.:_____________________________________________
(3)Filing Party: ________________________________________________________________________
(4)Date Filed: _________________________________________________________________________

 
 

JPMORGAN CHINA REGION FUND, INC.

J.P. Morgan Chase Bank, N.A.

1 Beacon Street, 18th Floor

Boston, Massachusetts 02108, USA

March 31, 2015

Dear Stockholder:

I have pleasure in enclosing the Notice of Annual Meeting of Stockholders of the JPMorgan China Region Fund, Inc. which will be held at the offices of J.P. Morgan Asset Management, 270 Park Avenue, New York, NY 10017, on Thursday, May 14, 2015, at 11:00 a.m.

I strongly urge you to read the enclosed Notice and Proxy Statement, vote, sign and return the proxy card in the postage-paid envelope provided.

My fellow directors and I wish to extend to you an invitation to attend this year’s Annual Meeting of Stockholders, and very much look forward to meeting with you.

Yours faithfully,

 

/s/ The Rt. Hon. The Earl of Cromer
The Rt. Hon. The Earl of Cromer
Chairman
 
 

JPMORGAN CHINA REGION FUND, INC.

J.P. Morgan Chase Bank, N.A.

1 Beacon Street, 18th Floor

Boston, Massachusetts 02108 USA

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 2015

To the Stockholders:

Notice is hereby given that the Annual Meeting of Stockholders (the “Meeting”) of the JPMorgan China Region Fund, Inc. (the “Fund”) will be held at the offices of J.P. Morgan Asset Management, 270 Park Avenue, New York, New York 10017, on Thursday, May 14, 2015, at 11:00 a.m., and at any adjournments or postponements thereof, for the following purposes:

 

(1)

to elect two (2) Directors of the Fund, to hold office for the term indicated and until their successors shall have

been elected and qualified; and

(2)

to consider and act upon such other business as may properly come before the Meeting or any

adjournments or postponements thereof.

Friday, March 13, 2015, was fixed by the Board of Directors as the record date for determination of stockholders entitled to notice of, and to vote at, the Meeting or any adjournments or postponements thereof.

 

  BY ORDER OF THE BOARD OF DIRECTORS  
  /s/ Lucy Dina  
  Lucy Dina
Secretary		  

Boston, Massachusetts
March 31, 2015

 

 

YOUR VOTE IS IMPORTANT

Whether or not you plan to attend the Fund’s Meeting,

please execute and return the enclosed proxy promptly in the postage-paid envelope provided.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE STOCKHOLDER MEETING TO BE HELD ON MAY 14, 2015

The Fund’s Notice of Annual Meeting of Stockholders, Proxy Statement and Form of Proxy are available on the internet at http://www.jpmchinaregionfund.com/_documents/2015-proxy-statement.pdf

 
 

JPMORGAN CHINA REGION FUND, INC.

 

J.P. Morgan Chase Bank, N.A.

1 Beacon Street, 18th Floor

Boston, Massachusetts 02108 USA

 

PROXY STATEMENT

 

INTRODUCTION

 

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of JPMorgan China Region Fund, Inc. (the “Fund”) of proxies to be voted at the Annual Meeting of Stockholders (the “Meeting”) of the Fund to be held at the offices of J.P. Morgan Asset Management, 270 Park Avenue, New York, New York 10017, on Thursday, May 14, 2015, at 11:00 a.m., and at any adjournments or postponements thereof, for the following purposes:

 

(1)

to elect two (2) Directors of the Fund, to hold office for the term indicated and until their successors shall have

been elected and qualified; and

(2)

to consider and act upon such other business as may properly come before the Meeting or any

adjournments or postponements thereof.

 

The enclosed proxy and this Proxy Statement are first being sent to the Fund’s stockholders on or about March 31, 2015.

 

THE FUND WILL FURNISH, WITHOUT CHARGE, COPIES OF THE ANNUAL REPORT AND ANY MORE RECENT REPORT TO STOCKHOLDERS UPON REQUEST. REQUESTS FOR COPIES OF SUCH REPORTS SHOULD BE DIRECTED TO:

 

Computershare Trust Company, N.A.

P.O. Box 30170

College Station, TX 77842-3170, USA

800-426-5523

www.computershare.com

 

The cost of soliciting proxies and preparing the proxy materials will be borne by the Fund. The Fund will request securities brokers, custodians, nominees and fiduciaries to forward solicitation material to the beneficial owners of stock held of record and will reimburse them for their reasonable out-of-pocket expenses in forwarding such solicitation material. In addition, proxies may be solicited personally or by telephone or facsimile by directors, officers and employees of the Fund without additional compensation to them.

 

The Board has selected Khimmara Greer and Mark E. Tuttle to act as proxies with full power of substitution. All properly executed proxies received prior to the Meeting will be voted at the Meeting in accordance with the instructions marked thereon or otherwise as provided therein. If no instruction is given, an executed proxy will authorize the persons named on the respective proxy card enclosed as proxies to vote in favor of each proposal. Any proxy may be revoked at any time prior to the exercise thereof by submitting another proxy bearing a later date or by giving written notice to the Secretary of the Fund at the Boston, Massachusetts address indicated above or by voting in person at the Meeting. Attendance at the Meeting, by itself, will not revoke a previously tendered proxy.

 

The Board has fixed the close of business (4:00 p.m. Eastern Time) on March 13, 2015, as the record date for the determination of stockholders entitled to notice of, and to vote at, the Meeting or any adjournments or postponements thereof. At that date, there were outstanding and entitled to vote 6,447,637 shares of Common Stock, par value $0.01 per share. Stockholders of the Fund on that date will be entitled to one vote on each matter to be voted for each share held, with no shares having cumulative voting rights. Abstentions and “broker non-votes” (as defined below) are counted for purposes of determining whether a quorum is present for purposes of convening the Meeting. “Broker non-votes” are shares held by a broker or nominee for which an executed proxy is received by the Fund but are not voted as to one or more proposals, because instructions have not been received from the beneficial owners or persons entitled to vote, and the broker or nominee does not have discretionary voting power.

 

Abstentions and broker non-votes will not be counted as “votes cast” on any proposal, and abstentions and broker non-votes will have no effect on Proposal 1.

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The principal executive offices of the Fund are located at J.P. Morgan Chase Bank, N.A., 1 Beacon Street, 18th Floor, Boston, Massachusetts 02108, USA.

 

OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND OFFICERS

The Fund does not have information concerning the beneficial ownership of shares held in the names of The Depository Trust Company participants as of March 13, 2015. However, to the knowledge of the Fund, each of the following was the record owner or beneficial owner of 5% or more of the outstanding shares of the Fund as of that date.

 

Title of Class Name and Address Number
of Shares		 Percent
of Class1
Common Stock

CEDE & Co.
c/o The Depository Trust Company
Box 20
New York, NY 10004-9998

USA

 6,402,768 99.30%
Common Stock City of London Investment Group PLC2
77 Gracechurch Street
London, EC3V 0AS
United Kingdom		 2,800,913 43.40%
Common Stock

Lazard Asset Management LLC3
30 Rockefeller Plaza
59th Floor
New York, NY 10112

USA

 1,263,859 19.60%

 

1 Because some or all of the shares attributed to CEDE & Co. may be held through The Depository Trust Company by City of London Investment Group PLC and/or Lazard Asset Management LLC, the total percentage in this column may exceed 100%.

 

2 Information as to beneficial ownership of City of London Investment Group PLC is based on a report filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 13, 2015.

 

3 Information as to beneficial ownership of Lazard Asset Management LLC is based on a report filed with the SEC on February 5, 2015.

 

The following table sets forth the beneficial ownership of shares held by all directors, the nominees and named executive officers of the Fund, individually and as a group, as of March 13, 2015.

 

Title of Class Name and Address Number
of Shares		 Percent
of Class*
Common Stock The Rt. Hon.
The Earl of Cromer (Nominee)
60 Victoria Embankment
London EC4Y 0JP
United Kingdom		 7,160 0.11%
  Alexander R. Hamilton
P.O. Box 12343
General Post Office
Hong Kong		 651 0.01%

 

2
 

  Julian M.I. Reid
60 Victoria Embankment
London EC4Y 0JP
United Kingdom		 632 0.01%
  John R. Rettberg
1 Beacon Street
18th Floor
Boston MA, 02108
USA		 500 0.01%
  Simon J. Crinage (Nominee)
60 Victoria Embankment
London EC4Y 0JP
United Kingdom		 — —
 

Neil S. Martin

60 Victoria Embankment

London EC4Y 0JP

United Kingdom

 — —
  Lucy Dina
60 Victoria Embankment
London EC4Y 0JP
United Kingdom		 — —
 

Stephen M. Ungerman

270 Park Avenue

New York, NY 10017

USA

 — —
  All Directors and Officers as a Group* 8,943 0.14%

 

 

 

* The holdings of each director, officer, and nominee and the holdings of all directors, officers, and nominees as a group does not exceed 1% of the Fund’s outstanding common stock. The holdings of each director and officer of shares of JF International Management Inc. (the “Investment Advisor” or “JFIMI”) and its affiliates do not exceed 1% of the value of the Investment Advisor or its affiliates.

 

3
 

 

PROPOSAL 1

ELECTION OF DIRECTORS

 

The Fund’s By-Laws provide that the Board shall be divided into three (3) classes: Class I, Class II and Class III. The terms of office of the present Directors in each class expire at the annual meeting of stockholders in the year indicated upon the election and qualification of their respective successors: Class I – 2015; Class II – 2016; and Class III – 2017. At each subsequent annual election, directors that are chosen to succeed those whose terms are expiring will be identified as being in the same class and will be elected for a three (3) year term. The effect of these staggered terms is to limit the ability of other entities or persons to acquire control of the Fund by delaying the replacement of a majority of the Board.

 

The term of The Rt. Hon. The Earl of Cromer and Mr. Simon J. Crinage (each a “Nominee” and together, the “Nominees”) will expire at the 2015 Meeting. Persons named in the accompanying form of proxy intend, in the absence of contrary instructions, to vote all proxies for the election of The Rt. Hon. The Earl of Cromer and Mr. Simon J. Crinage to serve for a term expiring on the date on which the Meeting is held in 2018, or until a successor is elected and qualified.

 

It is intended that all proxies received, unless otherwise indicated, will be voted “FOR” the election of the Nominees. The affirmative vote of a plurality of the shares present at the Meeting (at which a quorum is present) is required to elect the Nominees. The Board of Directors recommends that you vote “FOR” each Nominee.

 

The Board knows of no reason why the Nominees will be unable to serve. If a Nominee should become unable to serve, the proxies will be voted for the election of such person as may be designated by the Board to replace the Nominee.

 

The Board is responsible for oversight of the Fund. The Fund has engaged JF International Management Inc. (the “Investment Advisor” or “JFIMI”) to manage the Fund on a day-to-day basis. The Board oversees JFIMI and certain other principal service providers in the operations of the Fund. The Board is currently composed of five (5) members, four (4) of whom are Independent Directors[1]. The Board meets at regularly scheduled meetings four (4) times throughout the year. Under normal circumstances, in order to minimize expenses, the Board expects to hold two (2) meetings a year by telephone. In addition, the directors may meet in-person or by telephone at special meetings or on an informal basis at other times. As described below, the Board of Directors has established four (4) standing committees — Audit, Management Engagement, Pricing and Nominating — and may establish ad hoc committees or working groups from time to time, to assist the Board in fulfilling its oversight responsibilities.

 

The Board is chaired by an independent director, the Rt. Hon. The Earl of Cromer. As Chairman, Lord Cromer leads the Board in its activities. The directors have determined that the Board’s leadership and committee structure is appropriate, because the Board believes it sets the proper tone to the relationships between the Fund, on the one hand, and JFIMI and certain other principal service providers, on the other, and facilitates the exercise of the Board’s independent judgment in evaluating and managing the relationships. In addition, the structure efficiently allocates responsibility among committees.

 

Investing in general and the operation of a fund involve a variety of risks, such as investment risk, compliance risk, and operational risk, among others. The Board oversees risk as part of its oversight of the Fund. Risk oversight is addressed as part of various regular Board and committee activities. The Board, directly or through its committees, reviews reports from, among others, JFIMI, the Fund’s Chief Compliance Officer, the Fund’s independent registered public accounting firm and counsel, as appropriate, regarding risks faced by the Fund and the risk management programs of JFIMI and certain service providers. The actual day-to-day risk management with respect to the Fund resides with JFIMI and other service providers to the Fund. Although the risk management policies of JFIMI and the service providers are designed to be effective, those policies and their implementation vary among service providers and over time, and there is no guarantee that they will be effective. Not all risks that may affect the Fund can be identified or processes and controls developed to eliminate or mitigate their occurrence or effects, and some risks are simply beyond any control of the Fund or JFIMI, its affiliates or other service providers.

The Board has concluded that, based on each Nominee’s experience, qualifications, attributes or skills on an individual basis and in combination with those of the other directors, each Nominee should serve as a director. Among other attributes of the Nominees is their ability to review critically, evaluate, question and discuss information provided to them, to interact effectively with the various service providers to the Fund, and to exercise reasonable business judgment in the performance of his duties as a director. In addition, the Board has taken into account the actual service and commitment of the Nominees during their tenure as directors of the Fund in

 

1 “Independent Director” is defined as a director who is not an “interested person” within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”).

4
 

concluding that each should serve. A Nominee’s ability to perform his duties effectively may have been attained through: a Nominee’s educational background or professional training; business, consulting, public service or academic positions; experience from service as a director of the Fund, other funds, public companies, or non-profit entities or other organizations; or other experiences. Also, set forth below is a brief discussion of the specific experience qualifications, attributes or skills of each Nominee that led the Board to conclude that he should serve as a director.

The Rt. Hon. The Earl of Cromer has served as the Chairman and Director of the Fund since 1994 and was selected given his experience in Asian financial markets. Lord Cromer is the Chairman of Western Provident Association, LG India Plus Fund Ltd, Pedder Street Asia Absolute Return Fund Limited and LG Asia Plus Fund Limited. He also serves as Director of the Cheetah Korea Fund Ltd and as Chief Executive Officer of Cromer Associates Limited.

Simon Crinage is an interested director[2] of the Fund and was selected given his experience as both an officer and director in the financial services industry. Mr. Crinage, Managing Director, is the Head of J.P. Morgan Asset Management’s closed-end fund business. He has waived his entitlement to his directors’ fees and therefore draws no compensation as a Director of the Fund.

The following table presents information concerning the Nominees and the current Directors and Officers of the Fund. The information includes their positions and principal occupations during the last five (5) years.

 

 

Name, Address
and YOB		 Position(s)
Held with
Fund		 Term of
Office and
Length of
Time
Served		 Principal
Occupation(s)
During Past 5
Years		 Number of
Funds in
Fund
Complex
Overseen by
Director*		 Other Directorships
Held by Director
During the Past Five Years
INDEPENDENT DIRECTORS OR NOMINEES

The Rt. Hon. The
Earl of Cromer

(Nominee)
(1946)
60 Victoria
Embankment
London EC4Y 0JP
United Kingdom

 Chairman and
Class I
Director		 Three year
term ends in
2015;
Chairman and
Director since
1994		 Chairman of the Board of the Fund; Chairman of the Board, Western Provident Association (insurance), LG India Plus Fund Ltd (financial); Pedder Street Asia Absolute Return Fund Limited (financial); LG Asia Plus Fund Limited (financial); Director, Cheetah Korea Fund Ltd (financial); Sr. Partner, 4th Generation LP (financial); and Chief Executive Officer, Cromer Associates Limited (family business). 1 See Principal Occupation

 

 

2 “Interested Director” is defined as a director who is an “interested person” within the meaning of Section 2(a)(19) of the 1940 Act.

5
 
Name, Address
and YOB		 Position(s)
Held with
Fund		 Term of
Office and
Length of
Time
Served		 Principal
Occupation(s)
During Past 5
Years		 Number of
Funds in
Fund
Complex
Overseen by
Director*		 Other Directorships
Held by Director
During the Past Five Years
Alexander R. Hamilton
(1941)
P.O. Box 12343
General Post
Office Hong
Kong		 Class II
Director		 Three year
term ends in
2016; Director
since 1994		 Director of Citic Limited (infrastructure), Cosco International Holdings Limited (shipping); Esprit Holdings Limited (clothing retail), Shangri-La Asia Limited (hotels), DBS Bank (HK) (financial services), Vitagreen Health Products (healthcare) and Octopus Cards Limited (financial services). Former Director of China Cosco Holdings Co. Limited (shipping) (retired May 2011). 1 See Principal Occupation
John R. Rettberg
(1937)
1 Beacon Street
18th Floor
Boston, MA
02108
USA		 Class II
Director		 Three year
term ends in
2016; Director
since 2008		 Former Trustee, JPMorgan Alternative Products mutual fund Board (1997 to 2009). 1 See Principal Occupation
6
 
Name, Address and
YOB		 Position(s)
Held with
Fund		 Term of
Office and
Length of
Time
Served		 Principal
Occupation(s)
During Past 5
Years		 Number of
Funds in
Fund
Complex
Overseen by
Director*		 Other Directorships
Held by Director
During the Past Five Years
Julian M.I. Reid
(1944)
60 Victoria
Embankment
London EC4Y 0JP
United Kingdom		 Class III
Director		 Three year
term ends in
2017; Director
since 1998		 Chief Executive Officer of 3a Funds Group (financial); Director and Chairman of Morgan’s Walk Properties Limited (property), Director and Chairman of The Korea Fund, Inc. (financial); Director and Chairman of Prosperity Voskhod Fund (financial); Director and Chairman of ASA Limited (financial) and Director of JM Properties Limited (property). 1 See Principal Occupation
INTERESTED DIRECTOR

Simon J. Crinage

(Nominee)
(1965)
60 Victoria
Embankment
London EC4Y 0JP
United Kingdom

 President and
Class I
Director		 Three year
term ends in
2015; Director
since 2009;
President
since
2003**		 Managing Director, J.P. Morgan. 1 Director of The Association of Investment Companies Limited and JF International Management Inc.
OFFICERS WHO ARE NOT DIRECTORS

Neil S. Martin
(1971)
60 Victoria
Embankment

London EC4Y 0JP

United Kingdom

 Chief Operating Officer and Treasurer Since 2014** Executive Director, J.P. Morgan. N/A N/A
Lucy Dina
(1977)
60 Victoria
Embankment
London EC4Y 0JP
United Kingdom		 Secretary Since 2013** Vice President, J.P. Morgan. N/A N/A
7
 
Name, Address
and YOB		 Position(s)
Held with
Fund		 Term of
Office and
Length of
Time
Served		 Principal
Occupation(s)
During Past 5
Years		 Number of
Funds in
Fund
Complex
Overseen by
Director*		 Other Directorships
Held by Director
During the Past Five Years

Stephen M.
Ungerman
(1953)
270 Park Avenue

New York, NY
10017

USA

 Chief
Compliance
Officer		 Since 2014** Managing Director, J.P. Morgan Chase Bank NA. N/A N/A

 

* The Fund is the sole fund in the fund complex.
** The officers of the Fund serve at the discretion of the Board of Directors.

The following table sets forth the dollar range of equity securities in the Fund beneficially owned by each Director and Nominee as of March 13, 2015.

 

Name of Director Dollar Range of Equity
Securities in the Fund1
INDEPENDENT DIRECTORS  
The Rt. Hon. The Earl of Cromer $10,0001 - $50,000
Alexander R. Hamilton $1 - $10,000
Julian M.I. Reid $1 - $10,000
John R. Rettberg $1 - $10,000
INTERESTED DIRECTOR  
Simon J. Crinage  —

 

1 Valuation as of March 13, 2015.

 

During the fiscal year ended December 31, 2014, the Board held a total of five (5) meetings. All of the directors attended all the Board and Committee meetings for which they were eligible to attend.

 

The Board has an Audit Committee and a corresponding written Charter. The Audit Committee members are Messrs. Hamilton, Rettberg, Reid and Lord Cromer, each of whom is an Independent Director. Each member of the Audit Committee is not an “interested person” of the Fund, as defined in Section 2(a)(19) of the 1940 Act and is “independent”, as defined under Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee has at least one (1) member who is an audit committee financial expert: John R. Rettberg, a non-interested and independent person. The Audit Committee is exempt from the independence requirements of the New York Stock Exchange, Inc. (the “NYSE”) under Section 303A.00 of the NYSE Listing Standards, because the Fund is a closed-end fund. The Audit Committee met three (3) times during the fiscal year ended December 31, 2014 with all members present.

 

The Audit Committee meets with the Fund’s independent registered public accounting firm to review whether satisfactory accounting procedures are being followed by the Fund and whether internal accounting controls are adequate, to inform itself with regard to non-

8
 

audit services performed by the independent registered public accounting firm (if any) and to review fees charged by the independent registered public accounting firm. The Audit Committee, composed of all of the Independent Directors, also recommends to the Board the selection of the independent registered public accounting firm. The Fund’s written Audit Committee Charter is available on the Fund’s website at www.jpmchinaregionfund.com.

The Board also has a Management Engagement Committee. The Management Engagement Committee members are Messrs. Hamilton, Rettberg, Reid and The Rt. Hon. The Earl of Cromer. Each member of the Management Engagement Committee is an Independent Director. The Management Engagement Committee evaluates the investment performance of the Fund’s portfolio and considers the renewal of the Fund’s investment management contract, generally for an additional one (1) year period. The Management Engagement Committee met once during the fiscal year ended December 31, 2014 with all members present. The Fund’s Management Engagement Committee does not have a written charter.

The Board has a Nominating Committee. The Nominating Committee consists of all of the Independent Directors. The Nominating Committee is exempt from the independence requirements of the NYSE under Section 303A.00 of the NYSE Listing Standards, because the Fund is a closed-end fund. The Nominating Committee is responsible for identifying individuals believed to be qualified to become directors and recommending to the Board such nominees to stand for election at the Fund’s annual meeting of stockholders and to fill any vacancies on the Board. The Nominating Committee met one (1) time during the fiscal year ended December 31, 2014 with all members present. The Fund’s written Nominating Committee Charter is available on the Fund’s website at www.jpmchinaregionfund.com.

The Fund’s Nominating Committee believes that it is in the best interest of the Fund and its stockholders to obtain highly qualified candidates to serve as members of the Board. The Nominating Committee has not established a formal process for identifying candidates where a vacancy exists on the Board. In nominating candidates, the Nominating Committee may take into consideration such factors as it deems appropriate. These factors may include judgment, skill, diversity, experience with investment companies and other organizations of comparable purpose, complexity, size and subject to similar legal restrictions and oversight, the interplay of the candidate’s experience with the experience of other directors, and the extent to which the candidate would be a desirable addition to the Board and any committees thereof. Although the Board does not have a specific policy with respect to diversity, the Nominating Committee will consider the extent to which potential candidates possess sufficiently diverse skill sets and diversity characteristics that would contribute to the Board’s overall effectiveness. The Nominating Committee periodically reviews the role of the Nominating Committee and the Nominating Committee Charter and makes recommendations to the Independent Directors with respect thereto.

The Fund’s Nominating Committee will consider director candidates recommended by stockholders and submitted in accordance with applicable law and procedures as described in this Proxy Statement (see “Deadline For Stockholder Proposals” below).

 

The Nominating Committee also considers the Directors’ fees periodically and when otherwise required, and makes recommendations to the Board in connection with such fees. In considering and recommending director compensation, the Nominating Committee may conduct research regarding competitor funds, and utilize independent research. The Nominating Committee may also obtain outside legal and professional advice in determining or recommending director compensation and the execution of its duties generally. During the fiscal year ended December 31, 2014, the Fund did not utilize a compensation consultant in determining or recommending director compensation.

 

In November 2014, the Board through its Nominating Committee, considered succession planning and the need to refresh its Board and Committees. As a result, it has discussed the anticipated retirement of two (2) Directors in 2016. The Board intends to recruit two (2) new Directors in place of those retiring and will ensure it maintains an appropriate balance of skills.

 

The Board has a Pricing Committee. The Pricing Committee consists of all of the Independent Directors. Pursuant to the Pricing Committee Charter, the primary responsibilities of the Pricing Committee are the general oversight of the Fund’s investment valuation and fair value pricing processes, periodic review of the Fund’s valuation processes and approval of any appropriate changes to the same, and as appropriate participating in the determination of the valuations of the Fund’s investments with the input of Fund Management. There were no meetings of the Pricing Committee during the fiscal year ended December 31, 2014. The Fund’s written Pricing Committee Charter is available on the Fund’s website at www.jpmchinaregionfund.com.

9
 

The Fund does not have a formal policy regarding director attendance at the annual meeting of stockholders. However, all of the directors of the Fund then in office attended the May 8, 2014 Annual Meeting of Stockholders.

COMPENSATION OF DIRECTORS AND OFFICERS

The table below sets forth the compensation paid by the Fund to its directors who received such compensation for the year ended December 31, 2014. The Fund’s Nominating Committee performs the functions of a Compensation Committee.

 

Name of Person,
Position		 Fees earned
or paid in
cash by
the Fund		 Stock
Awards
($)		 Options
Awards
($)		 Non-Equity
Incentive
Plan
Compensation
($)		 Chance in
pension
value and
nonqualified
deferred
compensation
earnings ($)*		 All
other
compensation
($)		 Estimated
Annual
Benefits
Upon
Retirement*		 Total Compensation
From Fund and
Fund
Complex
Paid to Directors
INDEPENDENT DIRECTORS                
The Rt. Hon. The Earl
of Cromer,
Chairman and Director		 $59,750 None None None None None None $59,750
Alexander R. Hamilton,
Director		 $53,250 None None None None None None $53,250
Julian M.I. Reid,
Director		 $48,850 None None None None None None $48,850
John R. Rettberg,
Director		 $48,850 None None None None None None $48,850
INTERESTED
DIRECTOR		                
Simon J. Crinage None None None None None None None None
Total $210,700 None None None None None None $210,700

 

 

* The directors of the Fund do not receive any pension or retirement benefits from the Fund or the Fund’s Investment Advisor.

 

The Independent Directors’ compensation from the Fund consists solely of Independent Directors’ annual fees and attendance fees. Each Independent Director is paid an annual fee of at least $24,100 plus $3,300 per Board meeting attended, $3,300 per Audit Committee meeting attended and $3,300 per Management Engagement Committee meeting attended. The Chairman is paid an annual fee of $35,000 plus $3,300 per Board meeting attended, $3,300 per Audit Committee meeting attended and $3,300 per Management Engagement Committee meeting attended. The Audit Committee Chairman is paid an annual fee of $28,500 plus $3,300 per Board meeting attended, $3,300 per Audit Committee meeting attended and $3,300 per Management Engagement Committee meeting attended. In addition, a per diem allowance of $2,000 per day is paid to Independent Directors in respect of time spent by any Independent Director on Fund business outside normal Board and Committee meetings. The Independent Directors’ actual expenses are reimbursed. The Independent Directors of the Fund do not receive compensation for their service on the Nominating Committee.

 

A Director or Officer of the Fund who is also an officer or employee of the Fund’s Investment Advisor or its affiliates receives no remuneration from the Fund. Since all officers and “interested” directors of the Fund are also officers or employees of the Fund’s Investment Advisor or its affiliates, none of the officers or “interested” directors of the Fund received compensation in any form from the Fund for the fiscal years ended December 31, 2012, December 31, 2013, and December 31, 2014.

 

THE BOARD, INCLUDING ALL THE INDEPENDENT DIRECTORS, UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE NOMINEES AS DIRECTORS.

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AUDIT COMMITTEE REPORT

Notwithstanding anything to the contrary set forth in any of the Fund’s previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act that might incorporate future filings made by the Fund under those statutes, the following report shall not be deemed to be incorporated by reference into any prior filings or future filings made by the Fund under those statutes.

 

(1) Membership and Role of the Audit Committee

The Audit Committee consists of Mr. Alexander R. Hamilton, Mr. John R. Rettberg, Mr. Julian M.I. Reid and The Rt. Hon. The Earl of Cromer. The Audit Committee operates under a written charter adopted by the Board, which is available on the Fund’s website at www.jpmchinaregionfund.com.

The primary purpose of the Audit Committee is to assist the Board in monitoring the integrity of the financial statements of the Fund, the compliance by the Fund with legal and regulatory requirements, and the independence and performance of the Fund’s external independent registered public accounting firm.

 

(2) Review of the Fund’s Audited Financial Statements for the year ended December 31, 2014

The Audit Committee has conducted specific oversight activities with respect to the Fund’s audited financial statements for the year ended December 31, 2014. The Audit Committee has discussed with PricewaterhouseCoopers, LLP (“PwC”), the Fund’s independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 16 (Communication with Audit Committees). The Audit Committee has also reviewed and discussed them with the Fund’s Investment Advisor.

At its meeting on February 23, 2015, the Audit Committee also received the written disclosures and a letter from PwC required by Independence Standards Board Standard No. 1 (Independence Discussion with Audit Committees) and the Audit Committee discussed the independence of PwC.

Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to the Board that the audited financial statements for the year ended December 31, 2014, be included in the Fund’s annual report to stockholders required by Section 30(e) of the 1940 Act, and filed with the SEC as required by Rule 30d-1 under the 1940 Act.

 

Audit Committee

Alexander R. Hamilton, Chairman

The Rt. Hon. The Earl of Cromer

Julian M.I. Reid

John R. Rettberg

 

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PwC, located at 300 Madison Avenue, New York, New York 10017, has been recommended as the independent registered public accounting firm by a unanimous decision of the Audit Committee to audit the accounts of the Fund for and during 2015. This firm served as the independent registered public accounting firm of the Fund for 2013 and 2014. The Board does not know of any direct or indirect financial interest of PwC in the Fund.

No representative of PwC is expected to be present at the Meeting or be available for questions, although PwC is welcome to have a representative attend the Meeting and make a statement if desired.

Set forth in the table below are audit fees and non-audit related fees billed to the Fund by PwC for professional services received during and for the Fund’s fiscal years ended December 31, 2013 and 2014, respectively. No fees were billed by PwC to the Fund’s Investment Advisor or its affiliates.

 

Fiscal Year Ended
December 31		   Audit Fees   Audit-Related Fees   Tax Fees   All Other Fees
2013   $53,000   $11,000   $8,750   –
2014   $55,000   $10,500   $8,975   –

The Audit-Related Fees relate to security count procedures performed as required under Rule 17f-2 of the 1940 Act.

The nature of the services comprising the Tax Fees was the review of the Fund’s income tax returns and tax distribution requirements.

The Fund’s Audit Committee Charter requires the Audit Committee pre-approve all audit and non-audit services to be provided by the independent registered public accounting firm to the Fund, and all non-audit services to be provided by the auditors to the Fund’s Investment Advisor and any service providers controlling, controlled by or under common control with the Fund’s Investment Advisor that provide on-going services to the Fund, if the engagement relates directly to the operations and financial reporting of the Fund. All of the audit, audit-related and tax services described above for which PwC billed the Fund for the fiscal years ended December 31, 2014 and December 31, 2013 were pre-approved by the Audit Committee.

For the fiscal years ended December 31, 2014 and December 31, 2013, the Fund’s Audit Committee did not waive the pre-approval requirement of any non-audit services to be provided to the Fund by PwC.

 

For the fiscal years ended December 31, 2014 and December 31, 2013, the aggregate non-audit fees for services rendered by PwC to the Fund, the Fund’s Investment Advisor and any entity controlling, controlled by, or under common control with the investment advisor that provided ongoing services to the Fund were approximately $6.9 million and $6.6 million, respectively.

 

THE INVESTMENT ADVISOR

JFIMI was incorporated in the British Virgin Islands in 1992 and is registered as an investment advisor under the U.S. Investment Advisers Act of 1940, as amended. JFIMI’s principal address is 21st Floor, Chater House, 8 Connaught Road Central, Hong Kong.

 

JFIMI is 100% owned by JPMorgan Asset Management (Asia) Inc., whose principal address is 270 Park Avenue, New York, NY 10017, USA.

 

JFIMI manages one (1) other fund with a similar objective to the Fund, the JPM China Region Fund (“JMCRF”). JMCRF is an open-ended China region fund with assets under management of US$339 million as of March 16, 2015. For its services as investment sub-adviser to JMCRF, JFIMI receives compensation at an annual rate of 0.60% of JMCRF’s average daily net asset value.

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On November 4, 2014, the Fund’s Board considered and approved the renewal of the Investment Advisory Agreement (the “Agreement”) between the Fund and JFIMI for an additional term of twelve (12) months. At this meeting, the directors reviewed extensive materials prepared by JFIMI and discussed these materials with representatives of JFIMI. The directors considered the recommendation of the Management Engagement Committee (the “Committee”) that the Agreement be renewed, noting that the Committee had discussed, in an executive session with independent counsel, the nature, extent and quality of the advisory services provided to the Fund by JFIMI, the level of advisory fees, the costs of the services provided and the profits realized by JFIMI, the Fund’s expense ratio, its relative and absolute performance, any economies of scale with respect to the management of the Fund, any ancillary benefits received by JFIMI and its affiliates as a result of their relationship with the Fund, and various other matters included in the materials provided by JFIMI.

In approving the renewal of the Agreement, the Committee, and the Board, concluded that:

 

•    The annual investment advisory fee rate paid by the Fund to JFIMI for investment advisory services was reasonable relative to the Fund’s peer group and relative to other non-U.S. funds managed by JFIMI.
•    The Committee and the Board were generally satisfied with the nature, quality and extent of other services provided by JFIMI. In reaching this conclusion, the Committee and the Board reviewed, among other things, JFIMI’s investment experience in the China region markets and the background and experience of JFIMI’s senior management.
•    The Fund’s performance in the three (3) year period had outperformed its benchmark, the MSCI Golden Dragon Index. (The Board and the Committee reviewed the Fund’s performance in comparison to the peer group and the benchmark for the 1 year, 3 year, 5 year and since inception periods.) Although one (1) year and five (5) year performance lagged, it was noted that for certain longer-term periods, the Fund’s performance surpassed the benchmark. The Board and Committee noted that the Investment Advisor had made steady progress on implementing a strategic repositioning of the portfolio with the Board and Committee’s full support.
•    In light of the costs of providing advisory services to the Fund, the profits and ancillary benefits that JFIMI received, with respect to providing investment advisory services to the Fund, were reasonable. The Board and the Committee noted that beginning in May 2005, the Fund discontinued using JFIMI’s affiliates to effect Fund securities trades, unless in exceptional circumstances, effectively eliminating brokerage commissions as an ancillary benefit for JFIMI.
•    The Fund’s expense ratio remained at an acceptable level.

THE ADMINISTRATOR

 

The Fund’s Administrator is J.P. Morgan Chase Bank, N.A., whose address is 1 Beacon Street, 18th Floor, Boston, Massachusetts 02108 USA.

 

DEADLINE FOR STOCKHOLDER PROPOSALS

Stockholder proposals intended to be presented at the 2016 Meeting of Stockholders must be received by December 4, 2015, to be included in the Proxy Statement for that meeting. A stockholder seeking to have a proposal considered at the 2016 Meeting where the proposal is not received by December 4, 2015, should notify the Fund no later than February 12, 2016. If notice is not received by February 12, 2016, then the persons appointed as proxies may vote on the proposal as they see fit notwithstanding that stockholders have not been advised of the proposal in the Proxy Statement. Any proposal submitted by stockholders must comply in all respects with the following: (1) the rules and regulations of the SEC; (2) the provisions of the Fund’s Amended Articles of Incorporation and Bylaws; and (3) Maryland law. The Fund expects the 2016 Meeting will be held in May of 2016.

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Stockholders may send communications to the Board via the Fund’s address at 1 Beacon Street, 18th Floor, Boston, Massachusetts 02108, USA in care of J.P. Morgan Chase Bank, N.A. All communications received from stockholders are forwarded to the Board or to the specified director, as the case may be, for consideration and response.

SECTION 16(a) BENFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Section 16(a) of the Exchange Act requires the Fund’s Directors and Officers, certain persons affiliated with the Fund’s Investment Advisor and persons who beneficially own more than 10% of a registered class of the Fund’s securities, to file reports of ownership and changes of ownership with the SEC, the NYSE and the Fund. Directors, officers and greater-than-10% shareholders are required by SEC regulations to furnish the Fund with copies of all Section 16(a) forms they file.

 

During 2014, there were late filings or known failures to file required forms for the following individuals, none of whom beneficially own or have transacted in any securities of the Fund: Neil S. Martin, reporting on Form 3 his appointment as Chief Operating Officer and Treasurer of the Fund; Muriel Y. K. Sung, former Chief Compliance Officer of the Fund, amending Form 3 to report that she is chief compliance officer of JFIMI; Christopher D. Legg, former Secretary of the Fund, reporting on Form 5 that he is no longer subject to Section 16; Stephen K. B. Chang, reporting on Form 3 that he is a director of JFIMI; and Emerson Y. S. Yip, reporting on Form 3 that he is an officer of JFIMI. To the Fund’s knowledge, all Section 16(a) filing requirements were otherwise satisfied by the directors and officers subject to Section 16 of the Exchange Act.

 

OTHER MATTERS

The Board knows of no other matters to be presented for action at the Meeting other than those mentioned above. However, if any other matters properly come before the Meeting, it is intended that the persons named in the accompanying proxy will vote on such other matters in accordance with their judgment of the best interests of the Fund.

 

All proxies received will be voted in favor of all of the proposals unless otherwise directed therein.

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