Article 1. These Provisions are formulated in accordance with the Law of the People's Republic of China on the People's Bank of China and other relevant laws and administrative regulations in order to regulate the forward rate agreement business.

Article 2. For the purposes of these Provisions, the term "forward rate agreement" shall refer to a financial contract under which both parties to the transaction agree to exchange, on a certain future date, the interests calculated according to the contract interest rate and the reference interest rate respectively on the basis of a nominal principal within agreement period. In particular, the purchasing party to the forward rate agreement pays the interests calculated according to the contract interest rate and the selling party pays the interests calculated according to the reference interest rate.

Article 3. The reference interest rate of a forward rate agreement shall be the market interest rate which is with the character of a benchmark rate in the interbank market published by the National Interbank Funding Center (hereinafter referred to as the "CFETS") with the authorization of the People's Bank of China or the benchmark interest rate published by the People's Bank of China. The specific issues shall be determined by both parties to the transactions upon agreement.

Article 4. Among market participants in the national interbank bond market (hereinafter referred to as "market participants"), financial institutions that are qualified for market makers or settlement agency business may conduct forward rate agreement transactions with all other market participants, other financial institutions may conduct forward rate agreement transactions with all financial institutions, and non-financial institutions may only conduct forward rate agreement transactions with financial institutions qualified for market makers or settlement agency business for hedging purpose.

Article 5. Market participants shall follow the principles of impartiality, good faith and self risk-taking in forward rate agreement transactions, and establish and work to improve internal operating rules and risk management systems and effectively guard against the potential risks in forward rate agreement transactions.

Article 6. To engage in forward rate agreement business, market participants shall sign the Master Agreement of Financial Derivative Transactions in the China Interbank Market (hereinafter referred to as the "Master Agreement"). The provisions regarding standalone agreement and net termination value as specified in the Master Agreement shall apply to forward rate agreement transactions. The Master Agreement shall be formulated and issued by the National Association of Financial Market Institutional Investors (hereinafter referred to as the "NAFMII") with the authorization of the People's Bank of China.

Article 7. A financial institution shall, prior to conducting forward rate agreement transactions, submit its internal operating rules and risk management systems for forward rate agreement business to the NAFMII and CFETS for record filing. The internal risk management system shall at least include risk measurement and monitoring, internal authorization and credit, information monitoring and management, risk reporting and internal audit, etc.

Article 8. Where a financial institution that is qualified for a market maker or settlement agency business conducts a forward rate agreement transaction with a non-financial institution, the financial institution shall remind the non-financial institution of the potential risks in the transaction and shall not defraud or mislead the non-financial institution.

Article 9. Forward rate agreement transactions may be concluded through the trading system of CFETS or by telephone, facsimile and other means. Where transactions are not concluded through the trading system of CFETS, the financial institution shall report the status of forward rate agreement transactions to CFETS for record filing purpose on the working day following the conclusion of the transaction.

Article 10. Market participants shall sign a written transaction contract in forward rate agreement transactions. The written transaction contract shall include the deal ticket generated by the trading system of CFETS, or written contracts, correspondence and digital data message etc. The transaction contract shall at least include names of both parties to the transaction, transaction date, nominal principal amount, commencement and expiry date of the contract, settlement day, contract interest rate, reference interest rate, capital settlement method, dispute resolution, and other essential elements. A supplementary contract may be concluded if both parties consider it necessary.

Article 11. Market participants may establish a contract performance guarantee mechanism through negotiation based on the credit status of the counterparty.

Article 12. When a breach of contract occurs in a forward rate agreement transaction, if there is any dispute over the facts or liabilities for breach of the contract, both parties may apply for arbitration or institute a lawsuit to the People's Court as per contract agreement, and shall send the final results to the NAFMII before 12:00 a.m. on the following working day upon the receipt of the arbitration or lawsuit results. The NAFMII shall make an announcement on the day of receipt of the final results.

Article 13. The NAFMII shall give full play to the role of the industry self-disciplinary organization and formulate the relevant self-disciplinary regulations to guide market participants in conducting forward rate agreement business.

Article 14. CFETS shall formulate operating rules for forward rate agreement transactions according to these Provisions and implement such rules after reporting to the People's Bank of China for record filing.

Article 15. CFETS shall be responsible for daily supervision of forward rate agreement transactions and shall promptly notify the People's Bank of China in case of any abnormality in transaction. CFETS shall notify the People's Bank of China in writing of forward rate agreement transactions conducted each month within ten working days in the following month and shall report such information to the NAFMII at the same time.

Article 16. CFETS shall, subject to the provisions and authorization of the People's Bank of China, announce the information relevant to forward rate agreement transactions in a timely manner, but shall not divulge any non-public information or mislead participants.

Article 17. CFETS shall periodically provide Shanghai Headquarters, all branches, operations offices, central sub-branches in provincial capitals and central sub-branches in deputy provincial cities of the People's Bank of China with information relevant to forward rate agreement business conducted by market participants within their jurisdiction, and submit the same to the NAFMII at the same time. All branches shall strengthen the daily management of forward rate agreement transactions conducted by market participants within their jurisdiction.

Article 18. Where market participants or CFETS violates these Provisions, the People's Bank of China shall impose punishment according to Article 46 of the Law of the People's Republic of China on the People's Bank of China.

Article 19. The People's Bank of China shall be responsible for the interpretation of these Provisions

Article 20. These Provisions shall come into effect as of November 1, 2007.

September 29, 2007