People’s Bank of China Decree of the People’s Bank of China No.2 In order to regulate the issuance and trade of the short-term financing bonds, and to protect the interests of the parties concerned Governor Zhou Xiaochuan May 23, 2005 Measures for the Administration of the Short-term Financing Bill Chapter I General Provisions Article 1 These Measures are formulated in accordance with the Law of the People’s Republic of China on the People’s Bank of China and relevant Article 2 These Measures shall be applicable to the short-term financing bonds domestically-issued by a non-financial enterprise with a legal Article 3 The “short-term financing bonds” (hereinafter referred to as the financing bonds) as mentioned in these Measures refers to the negotiable Article 4 The People’s Bank of China shall conduct a supervision and administration of the issuance, trading, registration, custody, settlement Article 5 The issuance of the financing bonds shall be in line with the conditions stipulated in these Measures. Article 6 The financing bonds shall be issued to an institutional investor in the inter-bank bond market, and only be traded in the inter-bank Article 7 The issuance and trading of the financing bonds shall follow the principles of openness, fairness, impartiality, good faith, and self-discipline. Article 8 Such an enterprise as issues financing bonds shall truly, exactly, completely and timely disclose the information in accordance with Article 9 An investor itself shall assume the investment risk of financing bonds Chapter II Issuance, Registration and Custody Article 10 Such an enterprise as applies for the issuance of financing bonds shall meet the following conditions: (1) Being a legally-established legal person of enterprise with the territory of the People’s Republic of China; and (2) Having a stable capital source for debt redemption, and gaining profits in the latest accounting year; and (3) Having a good liquidity, and a comparatively strong repayment capacity for the mature debt; and (4) Using the capital raised from the issuance of financing bonds in the operation of the enterprise hereof; and (5) Having no record of serious violation of laws and regulations during the past three years; and (6) Having no record of postponing the repayment of the principal and the interests for the issued financing bonds during the past three (7) Having a sound internal management system and a management system governing the use and repayment of the raised capital; and (8) Other conditions stipulated by the People’s Bank of China. Article 11 Such an enterprise as issues financing bonds shall be subject to a credit rating by such a rating institution as is registered within Such a listed company as underwent credit rating during the past three years and as has follow-up rating arrangements shall be exempted Article 12 A balance management system shall be exercised on the issuance of financing bonds of an enterprise, and the balance of financing bonds Article 13 The maximum time limit of a financing bill shall be not more than 365 days. And such an enterprise as issues financing bonds may freely Article 14 The issuance interest or price of a financing bill shall be determined through a negation between an enterprise and a underwriting Article 15 The following documents shall be filed with the People’s Bank of China by an enterprise through its lead underwriter when it applies (1) A filing report for the issuance of financing bonds; and (2) A resolution of the board of directors assenting the issuance of financing bonds or a document with the same legal effect; and (3) A recommendation letter of the lead underwriter (attached with a due diligence report); and (4) A raising prospectus for financing bonds (attached with an issuance plan); and (5) A credit rating report and the statement for follow-up rating arrangements; and (6) An enterprise’s balance sheet of assets and liabilities, statement of losses and gains and statement of cash flow audited by a certificated (7) A letter of legal opinion issued by a lawyer (attached with a work report of the lawyer); and (8) A special report on the repayment plan and the safeguards; and (9) A report on the analysis of the cash flow concerning the payment of principal and interest of financing bonds; and (10) An underwriting agreement and a underwriting group agreement; and (11) A duplicated copy of the business license (copy) for a legal person of enterprise; and (12) Other documents required by the People’s Bank of China. Article 16 The People’s Bank of China shall, within 20 workdays as of the date of the acceptance of the required documents for archival filing, Article 17 The issuance of the financing bonds shall be underwritten by a qualified financial institution. An enterprise shall freely choose Article 18 An enterprise shall, within 5 workdays before the date of the issuance of financing bonds for every term, submit the relevant issuance Article 19 An enterprise shall, within 3 workdays before the date of the issuance of financing bonds, publish the raising prospectus of the financing Article 20 A financing bill shall be registered for custody through a real-name accounting in China Government Securities Depository Trust and Article 21 After finishing the issuance of the financing bonds, such an enterprise as issues the financing bonds (hereinafter referred to as Article 22 A lead underwriter shall, within 10 workdays as of the ending of the issuance of the financing bonds of every term, report the issuance Chapter III Trading, Settlement and Payment Article 23 A financing bill may, within the next workday following the registration of the credit and debt, circulate in the national inter-bank Article 24 The settlement of a financing bill shall be conducted through an institution approved by the CGSDTC or the People’s Bank of China. Article 25 An issuer shall pay the principal and interest on schedule, and shall not change the date of payment against the commitment in a contract. Article 26 An issuer shall, within 5 workdays before the payment of the principal and interest, publish the item of the payment of the principal Article 27 An issuer shall, in accordance with the stipulated procedure and time limit, transfer a full amount of the principal and interest Where an issuer fails to transfer a full amount of the principal and interest to be paid to a designated capital account, a payment Article 28 A lead underwriter shall, within 10 workdays as of the ending of the payment for the financing bonds, report the payment for the financing Chapter IV Information Disclosure Article 29 An issuer shall disclose information to the inter-bank bond market in accordance with relevant provisions. Article 30 The director or legal representative of an issuer shall ensure the authenticity, accuracy and integrity of the disclosed information. Article 31 An issuer shall periodically disclose its financial information during the period of continued existence of the financing bonds. The Inter-bank Funding Center shall well keep the electronic edition of the information disclosed by an issuer, and provide the investors Article 32 An issuer shall publicly disclose to the market such a major event as may affect the credit fulfillment of an investor of financing A major event as mention above shall include: (1) A major change in the business policy and scope of an issuer; and (2) Occurrence of an issuer’s default in failing to repay the mature debts; and (3) Occurrence of an issuer’s major losses or any loss that exceeds more than 10% of its net assets; and (4) An issuer’s decision of capital reduction, merger, split, dissolution and application for bankruptcy; and (5) Occurrence of a major litigation involving an issuer; and (6) Other items stipulates in laws and administrative regulations. Chapter V Supervision and Administration Article 33 Where an issuer fails to disclose information in accordance with the relevant provisions, or its disclosed information has an unauthentic Such a director, top-ranking officer as is directly responsible for the unauthentic information disclosed by an issuer and other persons Such a lead underwriter as fails to fulfill its duty of urging and assisting an enterprise to disclose information shall be suspended Article 34 Such an underwriting institution as fails to fulfill its duty against the provisions shall be refrained from undertaking the business Article 35 An underwriting institution, credit rating institution, certificated public accountant, lawyer and other special institutions and Article 36 The CGSDTC shall, on each trading day, timely disclose to the market a list of the single investors who hold more than 30% of the Article 37 The Inter-bank Funding Center shall be responsible for the daily monitoring of the trading of financing bonds, while the CGSDTC shall Article 38 The trading of financing bonds shall also be in line with other relevant provisions of the national inter-bank bond market besides Such a participant in the trading of financing bonds as violates these Measures and other relevant provisions shall be punished in Chapter VI Supplementary Provisions Article 39 Regulations on the issuance of short-term financing bonds by a financial institution shall be formulated separately. Article 40 The People’s Bank of China shall be responsible for the interpretation of these Measures. Article 41 These Measures shall enter into force as of the date of promulgation. |
People’s Bank of China
2005-05-23