Chapter I: General Provisions

Article 1.1 In accordance with provisions of “Interim Measures for the Administration of Negotiable Certificates of Deposit” (People's Bank of China Document [2013] No. 20), these Regulations are formulated in order to administrate the issuance and trading of interbank negotiable certificates of deposit, and to ensure the orderly conduct of Negotiable Certificates of Deposit (NCDs) business.

Article 1.2 The term NCDs as mentioned in this regulation refers to book-entry certificates of deposit issued by the banking depository financial institutions with legal person status (hereinafter referred to as depository financial institutions) in the interbank market.

Article 1.3 The issuance and trading of NCDs shall follow the principles of fairness, integrity and self-discipline. The issuance of NCDs shall be carried out with full information disclosure.

Article 1.4 China Foreign Exchange Trade System and National Interbank Funding Center (hereinafter referred to as CFETS) provides issuance, trading and information services for interbank NCDs, and is subject to the supervision of the People's Bank of China (hereinafter referred to as PBC).

Article 1.5 NCDs shall be issued through the electronic NCDs issuance system (hereinafter referred to as the CDIS) operated by CFETS, which provides two methods of issuance, public offerings and private placement.

Chapter II: Issuers and Investors

Article 2.1 For depository financial institutions that have met the issuance requirements of PBC (hereinafter referred to as the Issuer) planning for initial issuance, the following materials shall be submitted to the CFETS at least 3 working days prior to the issuance:

(1) The Annual Issuance Plan of NCDs after filing to PBC;

(2) Issuer Basic Information Form;

(3) Other materials that CFETS requires.

Article 2.2 The issuer shall, prior to the initial issuance of the NCDs in each year, register with the CFETS the issuance record amount of that year. The issuance record amount of the year shall be consistent with the issuer's annual issuance plan filed to PBC.

The planned issuance amount for each NCD shall not exceed the issuance amount available in the year for the issuer.

The issuance amount available in the year = The issuance amount recordedin the year - Total amount of NCDs outstanding – Total quotaof NCDs authorized. but not yet issued

Article 2.3 The issuer shall be connected to CFETS and be equipped with professionals who are familiar with the issuance procedures of NCDs and corresponding electronic system.   

Article 2.4 Institutions investing in NCDs (hereinafter referred to as investors) shall belong to one of the followings: members of the interbank lending market, fund management companies, fund products, overseas financial institutions and other institutions recognized by PBC, including policy banks, commercial banks, rural credit cooperatives at county level, first-level branches authorized by Chinese commercial banks (excluding city commercial banks, rural commercial banks and rural cooperative banks), branches of foreign banks; finance companies of enterprise groups, trust companies, asset management companies, financial leasing companies, auto financing companies, securities companies, insurance companies, insurance asset management companies, fund management companies; the specific-client asset management business of fund companies, the asset management business of commercial banks, the securities asset management business of securities companies, insurance products, trust products; foreign central banks, international financial institutions, foreign sovereign wealth funds; commercial banks, insurance companies, securities companies, fund management companies and other asset management institutions which are registered overseas according to law; and investment products, pension funds, charitable funds, endowments issued according to law by the above financial institutions.

The issuer may set the investor range for each NCDs through the issuance system.

Chapter III: Issuing Methods

Article 3.1 Public offerings include bidding offer and quote offer.

Article3.2 Bidding offer refers to the issuing method in which the issuer launches a bidding process and invites investors to participate in the bidding, then the issuer confirms the issue price (or coupon rate, base spread) and investors’ bid-winning quantity, according to the issuing results from the issuance system. Bidding offer includes two types, the price bidding and the quantity bidding. At present, the price bidding is a single price bidding.

Article 3.2.1 In a single price bidding, the bidding target can be price (RMB), spread (BP) and interest rate (%). Base on the bidding constraint set by the issuer, effective bids will be ranked by the bid price inhigh to low (or interest rates or spreads, from low to high) order and win the bid in turn, until the planned issuance amount isfilled (when the total bidding amount of effective bids is greater than the planned issuance amount) or all the effective bids have won the bid (when the total amount of effective bids is less than the planned issuance amount). Bid-winning investors shall subscribe the NCD according to the bid-winning price and bid-winning amount. If the bidding target is the price, then the bid-winning price is the price of the NCD, and is equal to the lowest bid price that wins the bid; If the bidding target is the spread, then the bid-winning price is the base spread of the NCD, and is equal to the highest bid spread that wins the bid; If the bidding target is the interest rate, then the bid-winning price is the coupon rate of the NCD, and is equal to the highest bid interest rate that wins the bid.

Article 3.2.2 Quantity bidding refers to the circumstances that the issuer determines before issuance the price (or coupon rate, spread) and the planned amount, then the investors submit the bidding amount. If the total bidding amount is less than the planned issuance amount, then allocate the total issuance amount according to the actual bidding amount of each investor; if the total bidding amount is higher than the planned issuance amount, then allocate the total issuance amount according to the proportion of actual bidding amount of each investor.

Article 3.3 Under the circumstances of bidding offer issuance, the issuer may view the bidding process in the interbank lending center.

Article 3.4 Quote offer refers to the issuing method in which the issuer determines all elements of the NCD before issuance, and after the issuance initiates, investors may choose to click on thequote offer and subscribe the NCD with all elements set by the issuer previously.

Article 3.5 Private placement refers to the issuing method in which the issuer chooses to issue NCD to some specific investors, and the issuer and investors shall negotiate about all the elements of the NCD.

Chapter IV: Procedures of Issuing

Article 4.1 The issuance procedures for NCDs include the set of issuance terms, bidding or subscription, the confirmation of the issuance result and payment confirmation.

Article 4.2 The set of issuance terms

The issuer shall create at least two users in the issuance system, who are in charge of the entry and review of the issuance terms, respectively. The reviewed and adopted issuance terms shall be confirmed by the CFETS before generating the issuance announcement. Under the circumstances of bidding offer and quote offer, each issuance announcement shall be disclosed at least 1 working day to all investors; Under the private placement, the issuer shall inform the issuing intention to CFETS at least 1 working day before the issuance.

When setting the issuance terms, the issuer shall submit its fund account information disclosed in its issuance plan to the issuance system. If the fund account information submitted to the issuance system is inconsistent with the issuance plan, investors may make payment to any one of the two accounts, and issuers shall confirm in both circumstances.

Article 4.3 Bidding or subscription

Article 4.3.1 Under the bidding offer

After the disclosure of the issuance announcement, the issuer shall begin the bidding period according to the time designated in the issuance announcement. Each working day will have 4 biddings, with 1 hour for each bidding, and the start time of the 4 biddings are 10:00, 11:00, 14:00, 15:00, respectively.

Investors within the range set by the issuer can participate in the bidding. The bidder shall fill in the tender document and make a review according to the requirement of the issuer. Prior to the end of the issuing period, the bidder may revoke or modify the tender document.

Article 4.3.2 Under the quote offer

After the disclosure of the issuance announcement, the issuer shall begin the issuing period according to the beginning time and the ending time designated in the issuance announcement, and may terminate the process in advance. The beginning, the ending and the early termination time shall be ended with a 0 or 5 (e.g. 15:40 or 15:45).

Investors within the range set by the issuer can click on the quote offer. The issuance system will automatically execute transaction within the range of the maximum amount of a single click set by the issuer. The subscription cannot be revoked once clicked. The subscribing amount of a single click for each investor shall be no less than 10 million yuan.

Article 4.4 The confirmation of the issuance result

Article 4.4.1 Under the bidding offer

After the end of the bidding issuing period, the issuance system will automatically calculate the bidding result, which will be sent to the issuer terminal with information alert; the issuer shall confirm the bidding result in 1 hour.

After the bidding result is confirmed, the system will automatically generate the result confirmation document, the notice of payment and the issuance result. For issuers who do not confirm the bidding result, the bidding issuance fails.

Article 4.4.2 Under the quote offer

After the end of the quote issuing period, the issuer does not need to confirm the result, and the issuance system will automatically generate the notice of the issuance result, the notice of payment and the issuance result.

Article 4.4.3 Under the private placement

After receiving the issuance result confirmed by both the issuer and investors, CFETS will input relevant issuance data into the issuance system, and generate the notice of the issuance result, the notice of payment and the issuance result. Issuer shall inform the initial investors the issuance announcement, the list of initial investors, etc. through the issuance system. Initial investor refers to the actual investors subscribing NCDs.

Article 4.5 Payment confirmation

The payment date of NCDs is the next day of issue date (T+1 day, to be postponed in case of holidays). Investors shall pay on time and in full amount before 14:00 of the payment date in accordance with the notice of payment.

The issuer shall submit the confirmation of payment to the issuance system within the issuance system service time on the payment date.

The issuer shall ensure that the investor's clearingaccount information is accurate upon the payment confirmation. Investors shall ensure that the clearingaccount information submitted to the issuance system and the CFETS RMB Electronic Trading System is accurate. If the issuer or the investor fill in or submit wrong information causing mistakes of registration and depository, the issuer or the investor shall bear the corresponding consequences.

Article 4.6 Registration and depository

CFETS shall transmit the payment result confirmed by the issuer to the Shanghai Clearing House, and the Shanghai clearing house shall handle the registration and depository of the NCD afterwards.

Chapter V: Trading Principles

Article 5.1 Upon completion of registration, NCDs can be traded and circulated in the inter-bank market.Types of transactions include buy, sell, repurchase and other t transactions approved by PBC. NCDs issued through private placement may be transferred amonginitial investors, however shall not be used as collaterals for pledged repo transactions.

Article 5.2 The transaction of NCDs shall be done in CFETS RMB Electronic Trading System. The trading system provides 3 trading modes, Request for Trade(RFT), Executed Streaming Prices(ESP) and Request for Quote (RFQ). Based on different trading modes, market participantsshall followthe process of quoting, standardizedinquiry (if any), and trading confirmation. The trading system will generate a trade ticket when the transaction is confirmed. Oncea transaction is done, trade ticket becomes the legal document and binds to both parties.

Article5.3Market participants shall comply with the relevant laws, regulations, self-discipline rules of the inter-bank market and the relevant rules released by CFETS to participate in NCD transactions, and must not make falsified or misleading price transactions. Benefittransfer through NCD transactions is strictly forbidden.

Article 5.4 The marketmaker mechanism is available in NCD transactions. NCDs marketmakers shall continuously provide two-way quotations for the corresponding NCD through the CFETS trading system, and deal with other market participants in accordance with their quotations.

Article 5.5 Other trading principles not included in this regulation shall be implemented in accordance with “Interim Measures for the Administration of Negotiable Certificates of Deposit” and other relevant rules issued by CFETS.

Chapter VI: Emergency Services

Article 6.1 Under the circumstances of failure malfunctionof issuance system, client terminal or communication line, which disables issuers or investors fromusing the issuance system for operations, or issuers requesting to modify the reviewed issuance terms, issuers or investors can apply for emergency services to CFETS.

Article 6.2 Issuers or investors shall download the emergency service application form from Chinamoney website, complete and stamp with seal, and fax to the CFETS field service, as the evidence foremergency services. The original copy of the form shall be kept by CFETS.

Article 6.3 The emergency form shall be filledwith instandardized manner, and all writing and meaning shall be clear.

The emergency form is invalid under the following circumstances:

(1) Submission time exceeds the time specified in this procedure;

(2) The content does not satisfy the requirements of accuracy, validity and completeness;

(3) The seal and the reserved seal does not match;

(4) Other conditions identified by CFETS.

Article 6.4 Issuers, investors or market members shall apply for other emergency services at CFETS according to the "CFETS RMB Trading Emergency Service Rules" (Zhonghui jiaofa [2010] No. 283).

Chapter VII: Requirementsfor Information Disclosure

Article 7.1Issuers have obligation to guarantee all information disclosureisdone in truthful accurate and completemanner, and to excludesfalsified ormisleading statementsand intentionalomissions. Issuers shall promptly notify investors through Chinamoney website, and report to PBC if any major changes onfinancial status of issuers. occur

Article 7.2 Issuers shall disclose Certificate of Deposit Annual Issuance Arrangement on Chinamoney website within three working days before their first placement. Issuers shall re-disclose the Plan if any major change occurs to the original schedule or the issuingbodies. Issuers shall assign a contact person to carry information disclosure duty and submit 'Contact Person Registration Form for Information Disclosureon ChinamoneyWebsite to CFETS.

Article 7.3 Under circumstances of bidding offer and quote offer, issuers shall disclose NCD IssuanceArrangement (Appendix 4) and NCD Issuance Result Summary (Appendix 6) before and aftereach placement.

Article 7.4 Under circumstances of private placement, issuer shall disclose NCD issuance result after the placement on Chinamoney website.

Article 7.5 NCD Issue Arrangement and NCD Issue Result shall be generated by the CDIS-issue system, and published onChinamoney Website.

Article 7.6CFETS shall transmit above information (7.5) to Shanghai Clearing House(SCH) and disclose on SHCH website.

Chapter 8: Violations and Sanctions

Article 8.1CFETS is authorized by PBOC to supervise and administratespecific activities relating to the issuing and trading of NCDs in accordance with the provisions of relevant laws or regulations by PBOC.

Article 8.2 Issuers and investors shall perform their duties in accordance with issue result, if following circumstances (8.2.1) occur, relevant parties shall negotiate for reasonable solution. The involved parties shall resolve disputes in accordance with provision of this chapter if negotiationfails.

Article 8.2.1 Investors fail to promptly pay in full amount on notice of payment: Under this circumstance, issuers may rejectbiddings or subscriptions. Issuers shall repay equivalent amount adding no accrued interest within three working days after payment date if only partial payment is made

Investors shall pay 0.1 percent of outstanding payment as penalty. If payment outstanding is less than10 million, penalty is 0.1 percent of 10 million.

Article 8.2.2 Issuers fail to confirm payment on the payment date:

If all agree to delay payment, issuers shall confirm payment within three working days after predetermined payment date. Circumstances of delayed payment confirmation shall be dealt in accordance with below acts:

(1) Fail to promptly submit payment confirmation

Issuers shall submit payment confirmation within three working days after payment date. If payment delay occurs, issuers shall notify CFETS of such change immediately, and explain reason of delay to investors who have made payment Value date shall remain unchanged.

If such delays are caused by investors making late payment, whoever responsible shall repay overcharged interests of NCDs and penalty of 0.05 percent (per day) as penalty. Accrued Penalty day counts is from value date to the actual payment settlement date.

(2) Fail to submit payment confirmation

Issuance failure caused bypayment confirmations not submitting within three working days after due date., under such circumstance, issuers shall be liable for compensating investors, who submit full payment, with total paid amount and 0.05 percent (per day) of delayed payment as penalty. AccruedPenalty day counts is from the actual payment settlement date to the actual repayment settlement date.

Article 8.2.3 Actual payment more than stated in the notice of payment:

Investors shall submit refund application; issuers shall refund within three working days after application date with no accrued interest. If refund is overdue, issuers shall pay 0.05 percent (per day) of delayed interest as penalty.

Article 8.2.4 Issuers not promptly repay sufficient principle and interest:

Issuers shall pay 0.05 percent (per day) of outstanding amount aspenalty.Accrued penaltyday countsare from the agreed value date or payment date to the actual payment date.

Article 8.3Under following situations, CFETS shall give one or a combination of oral warning, written warning, publiccriticism, issuanceand subscriptionsuspension, and reporting to PBOC in accordance to circumstance:

(1) Issuers failed to submit issuance results or payment confirmation promptly without explanatory reasons, or failed tomakefull principle and interestpayment promptly;

(2) Investors repeatedly delay in payment or failed tomake full payment;

(3) Any forms of confidentialitybreach, manipulating or influencing the issuance, or disturbing orders of issuance;

(4) Other violations against these Regulations.

Article 8.4Violations ofmarket participants shall be dealt in accordance with other related regulations that the CFETS may impose.

Chapter 9: Supplementary Provisions

Article 9.1The CFETS has right to interpret these Regulations.

Article 9.2These Regulations shall become effective upon promulgation.