PROVISIONS FOR THE ADMINISTRATION OF FORWARD TRANSACTIONS OF BONDS IN THE NATIONAL INTER-BANK BOND MARKET

the People’s Bank of China

Announcement of the People’s Bank of China

No. 9

With a view to promoting the development of bond market in China, regulating the forward transactions of bonds, preventing market
risks and protecting the legitimate rights and interests of the market participants, the Provisions for the Administration of Forward
Transactions of Bonds in the National Inter-bank Bond Market, which has been formulated by the People’s Bank of China, are promulgated
here.

The People’s Bank of China

May 11, 2005

Provisions for the Administration of Forward Transactions of Bonds in the National Inter-bank Bond Market

Article 1

With a view to regulating the forward transactions of bonds, protecting the legitimate rights and interests of the market participants
and promoting the development of bond market, the People’s Bank of China has formulated the present Provisions according to the Law
of the People’s Republic of China on the People’s Bank of China and other relevant laws and administrative regulations.

Article 2

The “forward transaction of bonds” as mentioned in the present Provisions refers to the act that both parties of a transaction agree,
on a certain day in the future, to buy and sell the subject matter bonds at the promised price and amount by them.

Article 3

The subject matter bonds for forward transactions shall be the central government bonds, central bank bonds, financial bonds and other
types of bonds issued upon the approval of the People’s Bank of China, which have been traded as existing bonds in the National Inter-bank
Bond Market.

Article 4

The forward transactions shall follow the principles of openness, impartiality and fairness.

Article 5

The market participants of forward transactions shall be institution investors in the National Inter-bank Bond Market.

Article 6

When undertaking forward transactions, a market participant shall establish a sound internal management system and a risk prevention
mechanism, and shall take effective measures to monitor and control the risks of forward transactions.

The market participant shall, before carrying out the business of forward transactions, submit its internal management measures for
forward transactions to the relevant supervisory department, and simultaneously send a copy separately to the National Inter-bank
Funding Center (hereinafter referred to as the NIFC) and the China Government Securities Depository Trust & Clearing Co. Ltd. (hereinafter
referred to as the CGSDTC Co. Ltd).

Article 7

When undertaking forward transactions, the market participants shall enter into primary agreements on the forward transactions.

Article 8

The market participants shall undertake forward transactions through the transaction system of the NIFC, and shall conclude a written
contract on every transaction. Such a written contract shall be the certificate of transaction generated by the transaction system
of NIFC. Both parties to a transaction may conclude a supplementary contract, when they believe it necessary.

The primary forward transaction agreement, the certificate of transaction generated by the transaction system of NIFC and the supplementary
contract shall constitute a complete forward transaction contract.

Article 9

The lawfully concluded forward transaction contract shall have legal binding force on both parties to the transaction. Neither of
the parties may change or cancel the contract.

Article 10

Both parties to a forward transaction may, through negotiation on the basis of their respective credit standing, establish a mechanism
to ensure the implementation of the contract.

Article 11

The time limit for the forward transaction from the trade day to the settlement day (including the trade day, excluding the settlement
day) shall be determined by both parties of the transaction, which shall not exceed 365 days.

Article 12

The forward transactions shall be carried out at a clean price and settled at a full price.

Article 13

Both parties to a forward transaction shall, on the trading day or its next working day, send the settlement instructions and supporting
instructions to the CGSDTC Co. Ltd

Article 14

When a forward transaction is mature, the settlement of fund and bonds shall be made actually.

Article 15

The total balance of the selling and purchase of a single bond during a forward transaction by any market participant (a single fund,
if a fund management company uses the property under the fund to conduct forward transactions) shall not exceed 20 % of the circulating
amount of the bond, and the total balance of sale in a forward transaction shall not exceed 200 % of the total balance of its own
available bonds.

Article 16

The total balance of purchase of a single bond in a forward transaction by a market participant shall not exceed 100 % of the net
value of its assets under the fund. The total balance of the net purchase of a branch within China of a foreign-funded financial
institution in the forward transactions shall not exceed 100% of its RMB operating funds. And the total balance of the net purchase
of any other institution in forward transactions shall not exceed 100% of its actually contributed capital or net assets.

Article 17

No market participant may manipulate the prices of forward transactions of subject matter bonds by any means, or manipulate the prices
of the existing bonds of subject matter bonds through forward transactions.

Article 18

The NIFC and the CGSDTC Co. Ltd shall, in light of the requirements and authorization of the People’s Bank of China, timely uncover
the relevant information on forward transactions and settlement to the market, and may not disclose any non-public information or
mislead the market participants.

Article 19

The NIFC shall be responsible for the routine supervision and control on forward transactions. The CGSDTC Co. Ltd shall be responsible
for the routine supervision and control on settlement of forward transactions. If the NIFC or the CGSDTC Co. Ltd finds out any abnormal
transaction or settlement, it shall initiate the corresponding emergency mechanism and report the relevant information to the People’s
Bank of China.

Article 20

In accordance with the present Provisions, the NIFC shall formulate forward transaction rules, and the CGSDTC Co. Ltd shall formulate
settlement rules.

Article 21

All branches of the People’s Bank of China shall reinforce its communication with the NIFC or the CGSDTC Co. Ltd, and shall conduct
routine supervision and inspection over the forward transactions of the market participants within their respective jurisdiction.

Article 22

When conducting forward transactions, the market participants shall, besides the present Provisions, abide by other relevant provisions
on the National Inter-bank Bond Market.

Article 23

Where a contract on a forward transaction is breached, and there is any dispute over the fact of breach of contract or over the liabilities
for the breach of contract, both parties to the transaction may, through negotiation, apply for arbitration or file a lawsuit with
the people’s court. And they shall send the final result to the NIFC or the CGSDTC Co. Ltd no later than 12 o’clock of the working
day next to the day when they receive the final result of arbitration and lawsuit. The NIFC or the CGSDTC Co. Ltd shall announce
the final result on the same day of its reception.

Article 24

If a market participant or the NIFC or the CGSDTC Co. Ltd violates any of the present Provisions, it shall be punished by the People’s
Bank of China according to Article 46 of the Law of the People’s Republic of China on the People’s Bank of China.

Article 25

The People’s Bank of China may, pursuant to the development of forward transactions, make timely revision to Articles 11, 14, 15 and
16 of the present Provisions.

Article 26

The power to interpret the present Provisions shall remain with the People’s Bank of China.

Article 27

The present Provisions shall come into force as of June 15, 2005.