[2006] No.15

For the purpose of regulating the bond lending and borrowing business, safeguarding the legitimate rights and interests of market
participants, enhancing the market liquidity and improving the development of China’s bond market, the Interim Measures for the Administration
of Bond Lending and Borrowing Business in the National Inter-Bank Bond Market, which are formulated by the People’s Bank of China,
are hereby promulgated.

People’s Bank of China

November 2, 2006

Interim Measures for the Administration of Bond Lending and Borrowing Business in the National Inter-Bank Bond Market

Article 1

These Provisions are formulated according to the Law of the People’s Republic of China on the People’s Bank of China and the relevant
laws and administrative regulations for the purpose of regulating the bond lending and borrowing business directly performed among
the participants of national inter-bank bond market (hereinafter referred to as market participants), safeguarding the legitimate
rights and interests of market participants, enhancing market liquidity and improving the further development of bond market.

Article 2

Bond lending and borrowing business hereof referred to in these Measures is an act of bond accommodation that the bond receiver borrows
object bonds from the bond provider with pledge of certain quantity bonds, and simultaneously stipulate that the bond receiver shall
return the borrowed bonds and the bond provider shall return the pledge accordingly on a certain day in the future.

Article 3

All market participants may perform the bond lending and borrowing business.

Market participants shall, when engaging in the bond lending and borrowing business, abide by the principles of fairness, good faith
and undertaking risks by themselves, strengthen the corresponding management on internal authorization and external credit granting,
establish corresponding inner management system and operational procedure, and perfect the risk prevention mechanism.

Article 4

The object bonds in bond lending and borrowing shall be self-owned bonds by the bond provider and may be traded and circulated in
national inter-bank bond market.

Article 5

The term of bond lending and borrowing shall be determined by both parties of the lending and borrowing business through negotiation,
which shall not be more than 365 days at most.

Article 6

If the payment of interest on the object bonds occurred in the term of bond lending and borrowing, the bond receiver shall timely
return the interest of the object bonds to the bond provider.

Article 7

The receiver of bond lending and borrowing business shall pay fees for bond lending and borrowing to the provider, the standard of
charging rates shall be determined by both parties through negotiation.

Article 8

A market participant, when engaging in bond lending and borrowing business, may conclude a deal through the trading system of the
National Inter-Bank Funding Center (hereinafter referred to as Funding Center) or through telephone, fax and other methods. Where
the bond lending and borrowing business is not conducted through the Funding Center, both parties of the lending and borrowing business
shall register and filing at the local branch of the People’s Bank of China on the day when the deal is concluded, and send a copy
to the Funding Center at the same time. China Government Securities Depository Trust & Clearing Co. Ltd. (hereinafter referred
to as CDC) shall be in charge of the settlement of bond lending and borrowing. Both parties of the lending and borrowing business
shall send settlement instruction to the CDC on the day when the deal is concluded.

Article 9

Market participants, when engaging in bond lending and borrowing business, shall sign a lending and borrowing contract in written
form for each deal. The lending and borrowing contract shall stipulate specifically the name and quantity of the object bond, name
and quantity of the pledged bond, term of the bond lending and borrowing business, fees for bond lending and borrowing business,
replacement of pledged bond, payment of interest of the borrowed bonds during the lending and borrowing period and the solution of
dispute, and etc.

Article 10

When market participants engages in bond lending and borrowing business, the bond receiver shall provide full amount bonds to the
bond provider as pledge, and the pledged bonds shall be self-owned bonds that are entrusted to CDC for depository.

Article 11

The delivery of bond lending and borrowing shall be performed with object bonds When the time limit is due, however, it may be performed
with cash upon the negotiation and consent of both parties of the lending and borrowing business.

Article 12

Where the balance received by a single institution from bond lending and borrowing business exceeds 30% (including 30%) of the total
of its self-owned bonds entrusted or since the balance received from a single bond exceeds 15% (including 15%) of the quantity issued
of this bond, if every 5% increases, the said institution shall submit reports in written form to the Funding Center and CDC simultaneously
and explain the reasons.

Article 13

Where there is any breach of contract in a bond lending and borrowing business, both parties of the lending and borrowing business
may apply for arbitration or take legal proceedings at the people’s court in accordance with the stipulations in the contract, and
shall, before 12:00 of the next workday since the receipt of the final result of arbitration or litigation, submit the final result
to the Funding Center and CDC, the Funding Center and CDC shall make an announcement with respect to the result thereon on the day
when the final result is received.

Article 14

The Funding Center and CDC shall, in accordance with the provisions and authorizations of the People’s Bank of China, provide trading
and settling services for market participants engaging in bond lending and borrowing business, formulate corresponding rules about
the trading and settling of bond lending and borrowing business under these Provisions and implement the rules after reporting them
to the People’s Bank of China for filing.

Article 15

The Funding Center and CDC shall, pursuant to the provisions and authorizations of the People’s Bank of China, timely reveal the
relevant information on bond lending and borrowing to market participants, but may not divulge non-public information or mislead
the market participants.

Article 16

The Funding Center and CDC shall establish and perfect the corresponding risk monitoring system and pre-alert indicator system. The
Funding Center shall be in charge of the routine monitoring work on bond lending and borrowing trading, and CDC shall be responsible
for the routine monitoring work on bond lending and borrowing settling, they shall initiate the emergency mechanism where any unusual
circumstance is found and report to the People’s Bank of China.

The Funding Center and CDC shall submit the written report about the analysis of operation situation of bond lending and borrowing
business of the quarter within 10 workdays upon the end of each quarter.

Article 17

All branches of the People’s Bank of China shall enhance the communication with the Funding Center and CDC, and implement the routine
supervision and administration on the bond lending and borrowing business performed by market participants that come under their
jurisdiction.

Article 18

Where a market participant or the Funding Center or CDC violates these Provisions, it shall be penalized by the People’s Bank of
China subject to the provision of Article 46 of the Law of the People’s Republic of China on the People’s Bank of China.

Article 19

These Measures are subject to the interpretation of the People’s Bank of China.

Article 20

These Provisions shall enter into effect as of November 20, 2006.