MEASURES FOR THE EXAMINATION AND APPROVAL OF THE MEMBERSHIP OF THE GOVERNMENT BOND UNDERWRITING SYNDICATES

No. 39

The Measures for the Examination and Approval of the Membership of the Government Bond Underwriting Syndicate, which have been deliberated
and adopted by the Ministry of Finance, People’s Bank of China and China Securities Regulatory Commission, are hereby promulgated
and shall come into force as of the date of promulgation.
Minister of Finance Jin Renqing

Governor of the People’s Bank of China Zhou Xiaochuan

Chairman of China Securities Regulatory Commission Shang Fulin

July 4, 2006

Measures for the Examination and Approval of the Membership of the Government Bond Underwriting Syndicates
Chapter I General Provisions

Article 1

In order to regulate the examination and approval of the membership of the government bond underwriting syndicates, safeguard the
legitimate rights and interests of the applicants and the members of the government bond underwriting syndicates and promote the
smooth issuance of government bonds as well as the stable development of the market, these Measures are formulated subject to relevant
provisions of the State Council.

Article 2

The present Measures apply to the examination and approval of the membership of the government bond underwriting syndicates.

Article 3

Government bond hereof referred to in the present Measures is the certificate bond, book-entry government bond and other government
bonds issued by the Ministry of Finance on behalf of the Central Government within the territory of China.

Article 4

Members of government bond underwriting syndicates hereof referred to in the present Measures are the commercial banks, securities
companies, insurance companies, trust investment companies and other financial institutions within the territory of China, which
comply with the particular qualifications and engage in government bond underwriting business upon approval.

Article 5

The government bond syndicates may include certificate bond underwriting syndicate, book-entry government bond underwriting syndicate
and other government bond underwriting syndicate, which are established in light of the species of the government bonds.

The members of the book-entry government bond underwriting syndicate may be divided into Class A members and Class B members.

Article 6

Commercial banks or other deposit financial institutions within the territory of China, and the China Postal Savings and Remittance
Bureau may apply for membership of a certificate bond underwriting syndicate.

Commercial banks or other deposit financial institutions within the territory of China, and securities companies, insurance companies,
trust investment companies or other non-depositing financial institutions may apply for membership of a book-entry government bond
underwriting syndicate.

Article 7

The examination and approval of the membership of the book-entry government bond underwriting syndicate shall be implemented by the
Ministry of Finance and jointly with the People’s Bank of China and China Securities Regulatory Commission (hereinafter referred
to as the CSRC), and shall solicit opinions from China Banking Regulatory Commission (hereinafter referred to as the CBRC) and China
Insurance Regulatory Commission (hereinafter referred to as the CIRC).

The examination and approval of the membership of the certificate bond underwriting syndicate shall be implemented by the Ministry
of Finance and jointly with the People’s Bank of China and shall solicit opinions from the CBRC.

Article 8

To establish a government bond underwriting syndicate shall abide by the principle of openness, fairness and impartiality, and select
the superior and eliminate the inferior on the basis of overall stability of the members. The number of members of the certificate
bond underwriting syndicate shall not be more than 40 in principle; the book-entry government bond underwriting syndicate 60, of
which the number of Class A members shall not be more than 20.

Article 9

The validity period of membership of a government bond underwriting syndicate shall be three years. After the expiration, the membership
shall be subject to a new examination and approval in accordance with the present Measures.

Chapter II Qualification Conditions

Article 10

An applicant shall meet the basic conditions as follows:

(1)

being a legal established financial institution within the territory of China;

(2)

engaging in business subject to relevant laws, having no record of serious violation in its business activities within the three recent
years and having a sound credit standing;

(3)

having sound and stable financial status; its capital adequacy ratio, solvency or net capital status and other indicators reaching
the surveillant standards; and having a fairly strong risk control capacity;

(4)

having a department which is exclusively in charge of the government bond businesses and having a sound control system for government
bond investment and risk;

(5)

its information management system has reached a fairly high level; and

(6)

being able to and being voluntary to perform all the obligations as described in Chapter VI of the present Measures.

Article 11

Where an applicant applies for the membership of the certificate bond underwriting syndicate, it shall observe the requirements as
follows:

(1)

It is in compliance with the requirements as described in Article 10 of the present Measures;

(2)

It is a deposit financial institution with not less than RMB 300 million of registered capital or with a total asset of RMB ten billion
or more; and

(3)

It has 40 or more business branches.

Article 12

Where an applicant applies for the membership of Class B of the book-entry bond underwriting syndicate, it shall meet the requirements
as follows:

(1)

It is in compliance with the requirements as provided in Article 10 of the present Measures; and

(2)

It is a deposit financial institution with registered capital no less than RMB 300 million or with total asset of RMB 10 billion or
more, or a non-deposit financial institution with registered capital of RMB 800 million.

Article 13

Where an applicant applies for the membership of Class A of the book-entry bond underwriting syndicate, it shall not only comply
with the requirements as described in Article 12 of the present Measures, but also rank among the top 25 in the comprehensive evaluation
of the book-entry bond business of the last year.

Chapter III Application, Examination and Approval

Article 14

The Ministry of Finance shall, jointly with the People’s Bank of China and CSRC, take charge of the examination and approval of the
membership of government bond underwriting syndicates. The closing date of the submission of applications for the membership of government
bond underwriting syndicates and other relevant information shall be publicized in advance in order to ensure sufficient time for
the applicants to prepare the application materials.

An applicant shall bring forward an application before the closing date and shall submit the application materials as follows:

(1)

An application form;

(2)

A brief introduction about this institution;

(3)

Copies for the legal person business license and the financial business permit;

(4)

A copy of the audit report on the final accounting of revenue and expenditure of the last year; and

(5)

Information about underwriting and transaction of the government bond in the last 2 years.

Where an applicant applies for the membership of the certificate bond underwriting syndicate, it shall respectively submit the application
materials to the Ministry of Finance and the People’s Bank of China. Where an applicant applies for the membership of the book-entry
bond underwriting syndicate, an applicant shall submit the application materials to the Ministry of Finance.

Article 15

The Ministry of Finance shall examine the application materials for the membership of book-entry underwriting syndicate, and shall,
jointly with the People’s Bank of China, examine the applications materials for the membership of certificate bond underwriting syndicate.
It shall respectively dispose the application materials pursuant to different conditions as follows:

(1)

When the application materials are incomplete or its format are not in consistent with the statutory form, the applicant shall be
notified, on the spot or within five days, of the contents to be supplemented and corrected once and for all. If it fails to do so,
it shall be deemed that the application have been accepted on the day when the application materials is received; or

(2)

When the application materials are complete and its format are in consistent with the statutory form, or if the applicant has submitted
all supplemental and correction application materials as required, the application for examination and approval shall be accepted.

Where the Ministry of Finance accepts or rejects an application for the examination and approval of the membership of a government
bond underwriting syndicate, it shall issue a certificate in written form with the special seal and an indication of the date.

Article 16

The Ministry of Finance shall solicit opinions from the CBRC and the CIRC in terms of the important business activities, financial
risk status, performances in the financial market, and whether or not there is any record of severe violation in the business activities
in recent three years.

Article 17

The Ministry of Finance shall convene meetings on the examination and approval of the membership of the certificate bond underwriting
syndicate, and perform the examination on the application materials of the applicants jointly with the People’s Bank of China.

The Ministry of Finance shall convene meetings on the examination and approval of the membership of the book-entry bond underwriting
syndicate, and perform the examination on the application materials of the applicants jointly with the People’s Bank of China and
CSRC.

Article 18

The Ministry of Finance shall, jointly with the People’s Bank of China and CSRC, select the superior of the members of the government
bond underwriting syndicates on the basis of the actually paid-up capital, asset scale, business performances, inter-industry ranking
and comprehensive ranking of government bond businesses and other relevant circumstances.

Article 19

The applicant shall be notified of the right to request for a hearing before the decision on the examination and approval of membership
of a government bond underwriting syndicate has been made by the Ministry of Finance, the People’s Bank of China and CSRC.

The hearing shall be implemented subject to the Measures for the Implementation of Hearing of Administrative Licensing by Finance
Organs (Order No. 21 of the Ministry of Finance).

Article 20

The Ministry of Finance shall, jointly with the People’ Bank of China, make a decision in written form on approval or disapproval
of the membership of the certificate bond underwriting syndicate within 45 days after the closing date for the acceptance of application
materials, or jointly with the People’s Bank of China and CSRC, make a decision in written form on approval or disapproval of the
membership of the book-entry bond underwriting syndicate.

A decision on approval of the membership of a government bond underwriting syndicate shall be promulgated to the general public after
it has been made.

If a decision on disapproval of the membership a government bond underwriting syndicate has been worked out, an explanation shall
be made and the applicant shall be notified of the right to administrative reconsideration or administrative lawsuit.

Article 21

A qualification certificate shall be issued to all the members of the certificate bond underwriting syndicate by the Ministry of
Finance and the People’s Bank of China. A qualification certificate shall be issued to all the members of the book-entry underwriting
syndicate by the Ministry of Finance, People’s Bank of China and CSRC.

Article 22

An applicant that refuses to accept the decision on rejection of its application or the decision on disapproval of the membership
of the government bond underwriting syndicate may apply for an administrative reconsideration or bring an administrative litigation
in the people’ court.

Chapter IV Withdrawal and Addition

Article 23

A member of a government bond underwriting syndicate may apply for withdrawal.

Article 24

The Ministry of Finance shall, jointly with the People’s Bank of China and/ or CSRC, work out a decision on approval or disapproval
of the applicant’s withdrawal from the government bond underwriting syndicate within 30 days after the receipt of an application
for withdrawal, and promulgate it to the general public.

The withdrawal applicant as a member of government bond underwriting syndicate shall continue its obligations and enjoy the corresponding
rights before obtaining an approval.

Article 25

If any member of a government bond underwriting syndicate commits any of the following acts, it shall withdraw from the government
bond underwriting syndicate in light of the primary agreement on the underwriting of government bonds:

(1)

A member of a government bond underwriting syndicate commits any severe violation of law, or it can not sustain the performance of
the obligations of a member of the government bond underwriting syndicate due to its bad financial status;

(2)

A member of the certificate bond underwriting syndicate fails to perform the prescribed obligation of underwriting the minimum or
higher proportion of government bonds, or it commits such acts as being reluctant to sell, selling by exceeding the plan, entrusting
any other institution to sell, or failing to actively promote and publicize the sale of the government bonds; or

(3)

If any member of the book-entry government bond underwriting syndicate fails to bid for or underwrite the government bonds at the
minimum or higher proportion as prescribed in the primary agreement on the underwriting of government bonds for 4 times in accumulation,
or makes any seriously inappropriate bid, or dominates the secondary market, etc.

Article 26

If any member withdraws from a government bond underwriting syndicate, the primary agreement on the underwriting of government bonds
shall be terminated by the Ministry of Finance.

Where any institution withdraws from a government bond underwriting syndicate, it shall return its qualification certificate.

Where any institution withdraws from a government bond underwriting syndicate, it shall not apply for participating in a government
bond underwriting syndicate within 2 years as of the withdrawal.

Article 27

When the number of members of a government bond underwriting syndicate is no more than that as prescribed in Article 8 of the present
Measures, the Ministry of Finance may, jointly with the People’s Bank of China and CSRC, make a decision on adding the members of
the government bond underwriting syndicate as required in the issuance of government bonds, and shall promulgate the said decision
to the general public timely.

Article 28

The application, examination and approval of the membership of the government bond underwriting syndicate shall be implemented as
prescribed in Chapter III of the present Measures when adding a member of a government bond underwriting syndicate.

Chapter V Rights of Members of Government Bond Underwriting Syndicates

Article 29

A member of a government bond underwriting syndicate shall have the basic rights as follows:

(1)

Negotiating with the Ministry of Finance on the terms and contents of the primary agreement on the underwriting of government bonds;

(2)

Bringing forward suggestions and advice on the issuance form and management measures for the government bonds;

(3)

Participating in the issuance of government bonds, and directly underwriting government bonds from the Ministry of Finance;

(4)

Obtaining commissions from the government bonds subject to the document on the issuance government bonds;

(5)

Obtaining timely the information on the issuance of government bonds by the prescribed channels;

(6)

Participating in the pilot innovation of government bonds; and

(7)

Taking the priority to participate in the inspection and training of government bond business.

Article 30

A member of the certificate bond underwriting syndicate shall have the rights as follows:

(1)

The rights as specified in Article 29 of the present Measures;

(2)

Participating in the meeting on the analysis of financing of certificate government bonds;

(3)

Taking the priority to obtain the membership of the book-entry bond underwriting syndicate.

Article 31

A Class B member of the book-entry bond underwriting syndicate shall have the rights as follows:

(1)

The rights as prescribed in Article 29 of the present Measures; and

(2)

Participating in the process of issuance and competitive pricing of the book-entry bonds.

Article 32

A Class A member of the book-entry bond underwriting syndicate shall have the following rights:

(1)

The rights as specified in Article 31 of the present Measures;

(2)

Participating in the quarterly meeting on the analysis of financing of the book-entry government bonds; and

(3)

Underwriting additional government bonds within the range as described for the amount of the successful bid for the government bonds
of the current period of this institution.

Chapter VI Obligations for Members of Government Bond Underwriting Syndicates

Article 33

A member of a government bond underwriting syndicate shall perform the basic obligations as follows:

(1)

Participating in the activities of issuance of government bonds continuously, and making payments in full amount to the Ministry of
Finance for the issuance of government bonds timely.

(2)

Publicizing and distributing the government bonds properly and safeguarding the credit standing of government bonds;

(3)

Submitting the information on the issuance and sale of government bonds periodically;

(4)

Paying attention in the work of redemption of government bonds in order to ensure that the investors can receive the repayments for
the principal of the government bonds, and the interests thereof in a timely manner; and

(5)

Observing the laws, regulations of the state as well as the industrial self-discipline norms, accepting the surveillance and inspection
by the government bond supervisory departments, and submitting the information on the severe violation committed by this institution
or the bad financial status of this institution timely.

Article 34

A member of the certificate bond underwriting syndicate shall perform the obligations as follows:

(1)

The obligations as specified in Article 33 of the present Measures;

(2)

The certificate bonds of each period shall be underwritten at the minimum or higher proportion as prescribed by the Ministry of Finance
and the People’s Bank of China. The specific underwriting proportions for different institutions shall be studied and determined
by the Ministry of Finance and the People’s Bank of China subject to the voluntary applications of the members of certificate bond
underwriting syndicate, the type of the institution, the balance and increase of savings deposits, and the number of business organs
of the institutions as well. Once the minimum underwriting rate is decided, it will be remained for 3 years in principle. It may
be adjusted upon approval of the Ministry of Finance and the People’s Bank of China upon special circumstances;

(3)

Performing the promotion and propaganda for the issuance of government bonds, publicizing the address and contact telephone number
of the organs for the sale of government bonds, setting up obvious marks for the sale of government bonds, preparing publicity materials
and equip on-spot consultants in the sale organs;

(4)

Establishing a credit trust system controlled uniformly by legal person and a uniform network for the sale of government bonds, realizing
that the government bonds may be bought and accepted in this institution and in any of its branches and that the sale amounts are
adjusted automatically; and

(5)

Establishing inner rewards and punishment system for the sale of government bonds.

Article 35

A class B member of the book-entry bond underwriting syndicate shall perform the obligations as follows:

(1)

The obligations as described in Article 33 of the present Measures;

(2)

Opening a communication line which is exclusively linked to the book-entry bond bid system;

(3)

Participating in the bids of book-entry bonds continuously, making rational bids within the a reasonable price band and maintaining
the regular order of issuance of government bonds;

(4)

Any bid for the government bonds shall not be made between members of a government bond underwriting syndicate. Credits of self-operating
government bonds shall be registered in the self-operating account. Credits of self-operating government bonds on a commissioned
basis shall be registered in the client account.

(5)

Participating in the bid and underwriting of government bonds of each period within the range as described in the primary agreement
on the underwriting of government bonds; and

(6)

Participating in the government bond transactions actively and safeguarding the regular order of the government bond market.

Article 36

A Class A member of a book-entry government bond underwriting syndicate shall perform the obligations as follows:

(1)

The obligations as specified in Article 35 of the present Measures; and

(2)

Submitting reports on the analysis of operation of government bond market quarterly, and bringing forward suggestions on the improvement
of issuance of government bonds and the development of government bond market.

Chapter VII Surveillance, Inspection and Punishment

Article 37

The Ministry of Finance shall, jointly with the People’s Bank of China and the CSRC, take charge of the supervision and inspection
on the applications for the membership of government bond underwriting syndicates, and other relevant activities regarding the government
bond business carried out by members of government bond underwriting syndicates.

Article 38

If any applicant applies for the membership of government bond underwriting syndicate by concealing the relevant information or by
submitting false materials, its membership of government bond underwriting syndicate shall be rejected or disapproved by the Ministry
of Finance, the People’s Bank of China and the CSRC, and a warning will be delivered.

Article 39

If any member of a government bond underwriting syndicate obtains the membership of a government bond underwriting syndicate by means
of cheating, bribery or any other illegal means, its membership shall be revoked by the Ministry of Finance, the People’s Bank of
China and the CSRC, and an administrative sanction shall be delivered subject to relevant laws.

Article 40

When any member of the government bond underwriting syndicate fails to perform the obligations as described in the present Measures
and the circumstances are not serious, it shall be ordered by the Ministry of Finance, the People’s Bank of China and the CSRC to
make a correction within a time limit.

Article 41

If a member of a government bond underwriting syndicate commits any of the circumstances referred to in Article 25 of the present
Measures, the Ministry of Finance shall, jointly with the People’s Bank of China and/or CSRC, inform it to withdraw from the government
bond underwriting syndicate in accordance with the stipulations in the primary agreement on the underwriting of government bonds.

Chapter VIII Supplementary Provisions

Article 42

The National Council for Social Security Fund and China Postal Savings and Remittance Bureau may apply for being special members
of the book-entry bond underwriting syndicate, while such members are not allowed to engage in distributing government bonds.

Article 43

When the Ministry of Finance on behalf of the Central Government issues other government bonds that are mainly geared to individuals
in underwriting form, the measures for the examination and approval of members of the government bond underwriting syndicate shall
be dealt with reference to the procedures in the present Measures for the examination and approval of members of the certificate
bond underwriting syndicate.

Article 44

The present Measures shall enter into force as of the date of promulgation. The Measures for the Administration of the People’s Republic
of China for the Primary Self-operating Underwriters of Government Bonds (Cai Guo Zhai Zi [1993] No. 100) and the Measures for the
Implementation for the Examination and Confirmation of the Qualifications for the Primary Self-operating Underwriters of Government
Bonds (Cai Guo Zhai Zi [1993] No. 100) promulgated by the Ministry of Finance, People’s Bank of China and the CSRC on December 31,
1993 shall be annulled as of the same date.