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China Banking Regulatory Commission
Order of China Banking Regulatory Commission
No. 4
The Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Foreign-funded
Financial Institutions, which were adopted at the 40th chairmen meeting of China Banking Regulatory Commission on November 10, 2005,
are hereby promulgated and shall come into force as of February 1, 2006.
Liu Mingkang, Chairman of China Banking Regulatory Commission
January 12, 2006
The Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Foreign-funded
Financial Institutions
Chapter I General Provisions
Article 1
These Measures are formulated for the purposes of regulating the administrative licensing acts of China Banking Regulatory Commission
(hereinafter referred to as the CBRC) and its dispatched institutions relating to foreign-funded financial institutions, clarifying
the administrative licensing matters, conditions, operational procedures and time limits and protecting the legitimate rights and
interests of the applicants in accordance with the Banking Supervision Law of the People’s Republic of China, the Law on Commercial
Banks of the People’s Republic of China, the Administrative License Law of the People’s Republic of China, the Regulation for the
Administration of Foreign-funded Financial Institutions of the People’s Republic of China, other laws and administrative regulations,
and relevant decisions of the State Council.
Article 2
These Measures shall apply to solely foreign -funded banks, equity joint banks, solely foreign-funded financial companies, equity
joint financial companies, branches of foreign banks, and the representative offices of foreign unded financial institutions in
China as ruled in the Regulation on the Administration of Foreign-funded Financial Institutions and the Measures for the Administration
of Foreign-funded Financial Institutions’ Representative Offices in China.
The term “foreign-funded legal person institution” as mentioned in these Measures refers to solely foreign-funded banks, equity joint
banks and solely foreign-funded financial companies and equity joint financial companies.
Article 3
China Banking Regulatory Commission and its dispatched institutions shall implement the administrative licensing relating to foreign-funded
financial institutions in accordance with these Measures and the Provisions of China Banking Regulatory Commission on the Procedures
for the Implementation of Administrative License,.
Article 4
The following matters of the foreign-funded financial institutions shall be subject to the administrative license of the CBRC and
its dispatched institutions: the establishment, modification, termination, of the institution, the adjustment of the institution’s
business scope, the increase of business varieties, the qualifications of holding post of the senior manager of the institutions
and etc…
Article 5
The submitted materials ruled by these Measures, except for annual statements, shall be accompanied by a Chinese translation if they
are written in a foreign language. An annual statement printed in a language other than Chinese or English shall be accompanied by
a Chinese or English translation.
Article 6
For any materials as required to be submitted by these Measures, if they are required to bear the signature of the authorizing party,
they shall be accompanied by its (his) authorization.
Except for the photocopy of business license issued by a Chinese administrative organ for industry and commerce, the photocopy of
business license or any other financial business licensing document, letter of authorization, letter of guarantee issued by a foreign
bank about bearing the tax and debt liabilities of its branches within China, and the document (letter) of opinions of the competent
authority of the country or region where it is located as required to be submitted by these Measures, shall be notarized by an organization
that is recognized by the country or region where it is located or shall be accredited by the embassy (consulate) of the People’s
Republic of China in the relevant country or region.
Chapter II Establishment of Institutions
Section 1 Establishment of Solely Foreign-funded Banks and Equity Joint Banks
Article 7
The minimum limitation amount of registered capital of a solely foreign-funded bank or equity joint bank shall be a sum of convertible
currency equivalent to RMB 300 million yuan. The registered capital shall be paid-in capital.
The CBRC may, according to the business scope of the solely foreign-funded bank or equity joint bank and the requirement for prudent
supervision , increase its minimum limitation amount of registered capital.
Article 8
To establish a solely foreign-funded bank or equity joint bank, the applicant shall meet the following conditions:
(1)
The investor of the solely foreign-funded bank or the foreign party of the equity joint bank is a financial institution;
(2)
The sole shareholder or biggest shareholder of the solely foreign-funded bank must be a commercial bank with a capital adequacy ratio
of not less than 8%. The sole foreign shareholder or biggest foreign shareholder of the equity joint bank must be a commercial bank
with a capital adequacy ratio of not less than 8%;
(3)
The sole shareholder or biggest shareholder of a solely foreign-funded bank must have a representative office in China which has existed
for 2 years or more. The sole foreign shareholder or biggest foreign shareholder of a equity joint bank must have established a representative
office in China, If the sole foreign shareholder or biggest foreign shareholder of the equity joint bank is a Hong Kong bank or Macao
bank, no representative office is required to be established at a first step. The representative office established within China
refers to one under the supervision of the CBRC.
(4)
By the end of the fiscal year prior to the filing of an application, the total assets of the sole shareholder or biggest shareholder
of the solely foreign-funded bank, or the sole foreign shareholder or biggest foreign shareholder of the equity joint bank shall
not be less than US $ 10 billion. If the sole shareholder or biggest shareholder of the solely foreign-funded bank, or the sole foreign
shareholder or biggest foreign shareholder of the equity joint bank is a Hong Kong bank or Macao Bank, its total assets shall, by
the end of the fiscal year prior to the filing of an application, be not less than US $ 6 billion.
(5)
The country or region where the investor of a solely foreign-funded bank or the foreign counterpart of an equity joint bank is located
has a sound financial regulatory system and the investor of the solely foreign-funded bank or foreign counterpart of the equity joint
bank is subject to efficient supervision of the relevant competent authority of the said country or region; and
(6)
The relevant competent authority of the country or region where the investor of a solely foreign-funded bank or the foreign counterpart
of the equity joint bank is located approves its application.
Article 9
To establish a solely foreign-funded or equity joint bank, the applicant shall satisfy the following prudent requirements in addition
to the aforesaid conditions:
(1)
Having a reasonable corporate governance structure;
(2)
With good continuous business performances;
(3)
Having formulated financial statements by following the prudent accounting principle, and the accounting firm holding non- reserved
opinions on the financial statements of the three years prior to filing the application;
(4)
Without record of serious violation of law or regulation, and without bad credit record;
(5)
Enjoying a good industry reputation and social image;
(6)
Meeting other relevant requirements for the investors of financial industry as provided for in the laws and regulations; and
(7)
Other prudent requirements as provided for by the CBRC.
Article 10
The establishment of a solely foreign-funded or equity joint bank shall be divided into two stages, i.e. the application for preparatory
establishment and application for establishment.
Article 11
The application for the preparatory establishment of a solely foreign-funded or equity joint bank shall be subject to CBRC for the
acceptance, examination and decision.
To apply for the preparatory establishment of a solely foreign-funded or equity joint bank, the applicant shall submit the application
materials to the CBRC, and shall make a copy to the institution dispatched by the CBRC at the place where the solely foreign-funded
or equity joint bank is to be established.
Within 20 days after the institution dispatched by the CBRC at the place where the solely foreign-funded or equity joint bank is
to be established receives the application materials, it shall submit its written opinions to the CBRC. The CBRC shall, within 6
months after it receives the said written opinions, make a decision of approval or disapproval of the preparatory establishment (namely
the “acceptance” or “rejection” as mentioned in Article 13 of the Regulation of the People’s Republic of China on Foreign-funded
Financial Institutions).
Article 12
To apply for the preparatory establishment of a solely foreign-funded or equity joint bank, an applicant shall submit the following
application materials:
(1)
A preparatory establishment application document (letter) which is jointly signed by the chairmen of the board of directors, or presidents
(chief executive officers or general managers) of all investors and is addressed to the Chairman of the CBRC. The content of application
document (letter) for the preparatory establishment of a solely foreign-funded bank shall at least contain the name, amount of registered
capital, and varieties of business of the solely foreign-funded bank to be established. The content of application document (letter)
for the preparatory establishment of an equity joint bank shall at least contain the name of the equity joint bank to be established,
the name of all investors, the amount of registered capital, the percentage of capital contributions of each investor, and the type
of business to be applied .
(2)
A feasibility study report, which content shall at least contain the basic information of the applicant, analyses of the market prospect
of the solely foreign-funded or equity joint bank to be established, the development plan for future business, organizational and
management structure, and forecast of the asset-liability scale and profits in three years after the start of business operations;
(3)
The articles of association of the solely foreign-funded or equity joint bank to be established;
(4)
An equity joint contract for the equity joint bank to be established;
(5)
A photocopy of the business license or any other financial business licensing document of the investor of the solely foreign-funded
bank or of each investor of the equity joint bank issued by the relevant competent authority of the country or region where the said
investor is located;
(6)
The recent 3 years’ annual statements of the investor of the solely foreign-funded bank or of each investor of the equity joint bank;
(7)
The document (letter) of opinions of the relevant competent authority of the country or region where the investor of the solely foreign-funded
bank or foreign investor of the equity joint bank is located;
(8)
For the applicant which establishes a solely foreign-funded or equity joint bank for the first time, it shall submit the information
about the financial system and relevant financial supervision laws and regulations of the country or region where the applicant of
is located;
(9)
The articles of association of the applicant;
(10)
The diagram of the organizational structure of the applicant and the group to which it belongs, name list of the main shareholders,
name list of the overseas branches and associate companies;
(11)
The bylaws or rules of the applicant on anti-money laundering; and
(12)
Other materials as required by the CBRC.
The application materials submitted by the applicant to the CBRC shall be in duplicate, and one copy shall be sent to the institution
dispatched by the CBRC at the place where the financial institution is to be established.
Article 13
An applicant shall, within 15 days after it receives the document of approval of the preparatory establishment, fetch an establishment
application form from the institution dispatched by the CBRC at the place where the financial institution is to be established.
The preparatory establishment period for a solely foreign-funded or equity joint bank shall be 6 months from the day when the applicant
fetches the establishment application form. If the Applicant fails to finish the preparatory establishment within 6 months and if
it applies for extending the preparatory establishment period, it shall, one month before the expiration of the preparatory establishment
period, submit to the institution dispatched by the CBRC at the place where the financial institution is to be established an application
document (letter) signed by the head of the preparatory establishment group of the planned institute, to state the reason and
submit relevant certification materials. The institution dispatched by the CBRC at the place where financial institution is to be
established shall make a decision of approval or disapproval within 15 days after it receives the application materials and shall
send a copy to the institution dispatched by the CBRC on the next higher level and the CBRC, respectively. The maximum extension
of the time limit for the preparatory establishment shall be 3 months.
The applicant shall submit an establishment application prior to the expiration of the time limit as mentioned in the preceding paragraph.
If it fails to do so, the document of approval of preparatory establishment shall be invalidated and the CBRC shall cancel the approval
of preparatory establishment.
Article 14
After the preparatory establishment of a solely foreign-funded or equity joint bank is finished, the applicant may apply for the establishment
thereof. The application for the establishment of the solely foreign-funded or equity joint bank shall be subject to the acceptance
and preliminary examination and check of the institution dispatched by the CBRC at the place where the financial institution is
to be established and be subject to the examination and decision of the CBRC.
To apply for the establishment of a solely foreign-funded or equity joint bank, the applicant shall submit application materials to
the institution dispatched by the CBRC at the place where the financial institution is to be established.
The institution dispatched by the CBRC at the place where the financial institution is to be established shall, within 30 days after
it accepts the application, submit the application materials, preliminary examination opinions and check opinions to the CBRC, and
simultaneously send a copy of the preliminary examination opinions and check opinions to the institution dispatched by the CBRC
on the next higher level. During the course of preliminary examination, the institution dispatched by the CBRC at the place where
the institution is to be established shall notify in written form the applicant of the check conclusion. If the applicant fails
to pass the check, it may, within 10 days after it receives the notice, resubmit the establishment application to the institution
dispatched by the CBRC at the place where the institution is to be established.
The CBRC shall, within 30 days after it receives a complete set of the application materials, make a decision of approval or disapproval.
Article 15
To apply for the establishment of a solely foreign-funded or equity joint bank, the applicant shall submit the following application
materials in triplicate to the institution dispatched by the CBRC at the place where the financial institution is to be established:
(1)
An application which is signed by the head of the preparatory establishment group of the institution to be established and addressed
to the Chairman of the CBRC;
(2)
An application form as required by the CBRC;
(3)
The name list, resumes, and photocopies of identity certification and educational background certification of the candidate chairman
of the board of directors and the president (chief executive officer or general manager) signed by the person authorized by the applicant;
(4)
Declarations on having or no having bad record as signed by the candidates;
(5)
A capital verification certification issued by a statutory capital verification institution;
(6)
The security on guard measures, and materials of other facilities relating to the business; and
(7)
Other materials as required by the CBRC.
Article 16
If the establishment of a solely foreign-funded or equity joint bank is approved, the applicant shall, after it receives the establishment
approval document and fetches the financial business permit, go through the registration formalities in the administrative organ
for industry and commerce so as to receive the business license.
A solely foreign-funded or equity joint bank shall start business within 6 months after it received the business license. If it fails
to do so, it shall, one month before the expiration of the time limit for business start, file an application for postponing the
start of business operations to the institution dispatched by the CBRC at the place where the financial institution is established.
The institution dispatched by the CBRC at the place where the financial institution is established shall make a decision of approval
or disapproval within 15 days after it receives the written application. The maximum time limit for the postponement of business
start shall be 3 months.
If the solely foreign-funded or equity joint bank fails to start business within the time limits as mentioned in the preceding paragraph,
the establishment approval document shall be invalidated; the CBRC shall cancel the establishment approval, take back its financial
business permit and make an announcement to the public..
Section 2 Establishment of Solely foreign-funded Finance Companies and Equity Joint Finance Companies
Article 17
The minimum limitation amount of registered capital of a solely foreign-funded or equity joint finance company shall be a sum of convertible
currency equivalent to RMB 200 million yuan. The registered capital shall be paid- in capital.
The CBRC may, according to the business scope of the solely foreign-funded finance company or equity joint finance company and the
requirement for prudent supervision increase its minimum limitation amount of registered capital.
Article 18
To establish a solely foreign-funded or equity joint finance company, the applicant shall meet the following conditions:
(1)
The investor of the solely foreign-funded or the foreign part of the equity joint finance company is a financial institution;
(2)
The sole shareholder or biggest shareholder of the solely foreign-funded finance company shall be a commercial bank or a financial
company, the capital adequacy ratio of the commercial bank shall not be less than 8%. The sole foreign shareholder or biggest foreign
shareholder of the equity joint finance company shall be a commercial bank or a financial company, the capital adequacy ratio of
the commercial bank shall not be less than 8%;
(3)
The sole shareholder or biggest shareholder of a solely foreign-funded finance company shall have a representative office in China
which has existed for 2 years or more. The sole foreign shareholder or biggest foreign shareholder of an equity joint finance company
shall have established a representative office in China. .If the sole foreign shareholder or biggest foreign shareholder of the equity
joint finance company is a Hong Kong or Macao bank or finance company, no representative office is required as a precondition. The
representative office established within China refers to one under the supervision of the CBRC.
(4)
By the end of the fiscal year prior to filing the application, the total assets of the sole shareholder or biggest shareholder of
the solely foreign-funded finance company, or the sole foreign shareholder or biggest foreign shareholder of the equity joint finance
company shall not be less than US $ 10 billion. If the sole shareholder or biggest shareholder of the solely foreign-funded finance
company, or the sole foreign shareholder or biggest foreign shareholder of the equity joint finance company is a Hong Kong or Macao
bank or company, its total assets shall, by the end of the fiscal year prior to the filing of an establishment application, be not
less than US $ 6 billion.
(5)
The country or region where the investor of a solely foreign-funded finance company or the foreign counterpart of an equity joint
finance company is located has a sound financial regulatory system and the investor of the solely foreign-funded finance company
or foreign counterpart of the equity joint finance company is subject to efficient supervision of the competent authority of the
said country or region; and
(6)
The relevant competent authority of the country or region where the investor of a solely foreign-funded finance company or the foreign
counterpart of the equity joint finance company is located approves the application.
Article 19
To establish a solely foreign-funded or equity joint finance company, the applicant shall, in addition to the requirements as mentioned
above, meet the prudent conditions as described in Article 9 of these Measures.
Article 20
The establishment of a solely foreign-funded or equity joint finance company shall be divided into two stages, i.e. the application
for preparatory establishment and application for establishment.
Article 21
The application for the preparatory establishment of a solely foreign-funded or equity joint finance company shall be subject to the
acceptance, examination and decision of the CBRC.
To apply for the preparatory establishment of a solely foreign-funded or equity joint finance company, the applicant shall submit
the application materials to the CBRC, and shall send a copy to the institution dispatched by the CBRC at the place where the solely
foreign-funded or equity joint finance company is to be established.
Within 20 days after the institution dispatched by the CBRC at the place where the solely foreign-funded or equity joint finance
company is established receives the application materials, it shall submit its written opinions to the CBRC. The CBRC shall, within
6 months after it receives the said written opinions, make a decision of approval or disapproval of the preparatory establishment
(namely the “acceptance” or “rejection” as mentioned in Article 13 of the Regulation of the People’s Republic of China on the Administration
of Foreign-funded Financial Institutions).
Article 22
To apply for the preparatory establishment of a solely foreign-funded or equity joint finance company, an applicant shall submit the
following application materials:
(1)
A preparatory establishment application document (letter) which is jointly signed by the chairmen of the board of directors, or the
presidents (chief executive officers or general managers) of all investors and is addressed to the Chairman of the CBRC. The content
of application document (letter) for the preparatory establishment of a solely foreign-funded finance company shall at least contain
the name, amount of registered capital, and the varieties of business of the solely foreign-funded finance company to be established.
The content of application document (letter) for the preparatory establishment of an equity joint finance company shall at least
contain the name of the equity joint finance company to be established, the name of all investors, the amount of registered capital,
the percentage of capital contributions of each investor, and varieties of business.
(2)
A feasibility study report, which shall at least contain the basic information of the applicant, analyses of the market prospect of
the solely foreign-funded or equity joint finance company to be established, the development plan of future business, organizational
and management structure, and forecast of the asset-liability scale and profits in three years after the start of business operations;
(3)
The articles of association of the solely foreign-funded or equity joint finance company to be established;
(4)
A joint operation contract on the equity joint finance company to be established;
(5)
A photocopy of the business license or any other financial business licensing document of the investor of the solely foreign-funded
finance company or of each investor of the equity joint finance company issued by the relevant competent authority of the country
or region where the said investor is located;
(6)
The recent 3 years’ annual statements of the investor of the solely foreign-funded finance company or of each investor of the equity
joint finance company;
(7)
The document (letter) of opinions for the application by the relevant competent authority of the country or region where the investor
of the solely foreign-funded finance company or foreign party of the equity joint finance company is located;
(8)
For the applicant which establishes a solely foreign-funded or equity joint finance company within China for the first time, it shall
submit the information about the financial system and relevant financial supervision laws and regulations of the country or region
where the applicant of a solely foreign-funded or equity joint finance company is located;
(9)
The articles of association of the applicant;
(10)
The diagram of the organizational structure of the applicant and the group to which it belongs, name list of the main shareholders,
name list of the overseas branches and associate companies;
(11)
The bylaws or rules of the applicant on anti-money laundering; and
(12)
Other materials as required by the CBRC.
The application materials submitted by the applicant to the CBRC shall be in duplicate, and one copy shall be sent to the institution
dispatched by the CBRC at the place where the financial institution is to be established.
Article 23
An applicant shall, within 15 days after it receives the document of approval of the preparatory establishment, fetch an establishment
application form from the institution dispatched by the CBRC at the place where the financial institution is to be established.
The preparatory establishment period for a solely foreign-funded or equity joint finance company shall be 6 months from the day when
the applicant fetches the establishment application form. If the Applicant fails to finish the preparatory establishment within 6
months and if it applies for extending the preparatory establishment period, it shall, one month before the expiration of the preparatory
establishment period, submit to the institution dispatched by the CBRC at the place where the financial institution is to be established
an application document (letter) signed by the head of the preparatory establishment group, state the reason and submit relevant
certification materials. The institution dispatched by the CBRC at the place where financial institution is to be established shall
make a decision of approval or disapproval within 15 days after it receives the application materials and shall send a copy to the
institution dispatched by the CBRC at the next higher level and the CBRC, respectively. The maximum extension of the time limit for
the preparatory establishment shall be 3 months.
The applicant shall submit an establishment application prior to the expiration of the time limit as mentioned in the preceding paragraph.
If it fails to do so, the document of approval of preparatory establishment shall be invalidated and the CBRC shall cancel the approval
of preparatory establishment.
Article 24
After the preparatory establishment of a solely foreign-funded or equity joint finance company is finished, the applicant may apply
for the establishment thereof. The application for the establishment of the solely foreign-funded or equity joint finance company
shall be subject to the acceptance and preliminary examination and check of the institution dispatched by the CBRC at the place
where the financial institution is to be established and be subject to the examination and decision of the CBRC.
To apply for the establishment of a solely foreign-funded or equity joint finance company, the applicant shall submit the application
materials to the institution dispatched by the CBRC at the place where the financial institution is to be established.
The institution dispatched by the CBRC at the place where the financial institution is to be established shall, within 30 days after
it accepts the application, submit the application materials, preliminary examination opinions and check opinions to the CBRC and
simultaneously send a copy of the preliminary examination opinions and check opinions to the institution dispatched by the CBRC at
the next higher level. During the course of preliminary examination, the institution dispatched by the CBRC at the place where the
institution is to be established shall notify in written form the applicant of the check conclusion. If the applicant fails to
pass the check, it may, after 10 days from the day it receives the notice, resubmit a establishment application to the institution
dispatched by the CBRC at the place where the institution is to be established.
The CBRC shall, within 30 days from the day it receives a complete set of application materials, make a decision of approval or disapproval.
Article 25
To apply for the establishment of a solely foreign-funded or equity joint financial company, the applicant shall submit the following
application materials in triplicate to the institution dispatched by the CBRC at the place where the financial institution is to
be established:
(1)
An application (letter) which is signed by the head of the preparatory establishment group of the to-be-established institution
and addressed to the Chairman of the CBRC;
(2)
An application form as require by the CBRC;
(3)
The name list, resumes, and photocopies of identity certification and educational background certification of the candidate chairma
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People’s Bank of China
Circular of the People’s Bank of China on the Relevant Matters concerning the Pilots of RMB Interest Rate Swap Transaction
Yin Fa [2006] No. 27
The headquarters of the People’s Bank of China in Shanghai and all branches and business management departments of the People’s Bank
of China, central sub-branches of the People’s Bank of China in all provincial capital cities, central sub-branches of the People’s
Bank of China in all deputy provincial capital cities, all policy banks, state-owned commercial banks, joint-stock banks, National
Inter-bank Funding Center and China Government Securities Depository Trust & Clearing CO., Ltd.,
For the purpose of diversifying the risk management tools of the national inter-bank bond market investors (hereinafter referred to
as the market investors), regulating and directing the RMB interest rate swap transaction, and accelerating the process of interest
marketization, hereby notified of the following matters relating to the pilots of RMB interest rate swap transaction:
I.
The term “RMB interest rate swap transaction” as mentioned in this Notice refers to a transaction in which both parties agree, within
a certain period in the future, to exchange cash flows on a agreed amount of RMB principal, with cash flow of one part calculated
on the basis of floating interest rate but the other part on the basis of fixed interest rate.
II.
Among the market investors, the commercial banks approved by the relevant regulatory institutions to engage in transactions business
of derivatives may, upon authorization of the regulatory institutions, conduct interest rate swap transactions with its clients of
deposits and loans, as well as other commercial banks approved to engage in derivatives transactions business, or provide their clients
of deposits and loans with interest rate swap transaction service. Other market investors are only allowed to conduct swap transactions
hedging for value protection purposes with the commercial banks that related to them due to deposits and loans and are approved to
engage in derivatives transactions business .
III.
The reference interest rates for swap transactions shall be the market interest rates possessing the benchmark character for the national
inter-bank bond market that are announced by the National Inter-bank Funding Center (hereinafter referred to as the NIFC) upon authorization
of the People’s Bank of China, and the one-year fixed deposit interest rate announced by the People’s Bank of China.
IV.
When engaging in swap transactions, the market investors shall be aware of the risks and establish and improve a sound risk control
system and internal control system so as to prevent the potential risks of the swap transactions indeed.
Before a market investor conducts a swap transaction, it shall submit the rules of the swap transaction risk control system and internal
control system to the regulatory institution and simultaneously send a copy to the NIFC.
V.
A swap transaction may be conducted through the trading system of the NIFC, or may be conducted by both parties via telephone, fax
or other means.
VI.
To conduct swap transactions, a market investor shall conclude a written transaction contract for each transaction, in which the transaction
elements shall be stipulated. If both parties to transaction believe necessary, they may enter into a separate agreement to clearly
specify the rights and obligations of both parties, circumstances of breach of contract, as well as handling of breach of contract,.
The aforesaid agreement and transaction contract constitute a complete contract for the swap transaction.
VII.
To conduct a swap transaction, a market investor may, according to the credit status of the opposite party, establish guaranty money
or securities. The submission, preservation and disposal of the guaranty money or securities shall be conducted with reference to
the forward bond transactions mode.
VIII.
After a swap transaction is clinched, both parties to the transaction shall strictly perform the obligations as stipulated in the
transaction contract.
IX.
A market investor engaging in swap transactions shall, within 3 working days after each period of ten days, report the swap transaction
information during the past period of ten days to the NIFC for archival purposes (except the transactions conducted through the trading
system of the NIFC). The NIFC shall, according to the provisions and authorization of the People’s Bank of China, disclose the relevant
information about the swap transactions to the market in a timely manner.
X.
In the case of breach of contract concerning a swap transaction, and existing any disputes over the fact of breach of contract or
liabilities therefore, both parties to the transaction may, upon negotiation, apply for arbitration or file a lawsuit to the people’s
court, and shall, no later than 12: 00 noon of the next working day after they received the final result of arbitration or litigation,
send the final result to the NIFC, which shall announce it to the general public on the same day when receives it.
XI.
The NIFC shall be responsible for the routine monitoring of the swap transactions. If it finds any abnormal transaction information,
it shall report it to the People’s Bank of China in a timely manner and shall, within 10 working days after the end of each month,
report in written form to the NIFC the swap transaction information of the current month.
XII.
All branches and sub-branches of the People’s Bank of China shall strengthen the communication with the NIFC and shall conduct routine
supervision and inspection over swap transactions of the market investors within their respective jurisdiction.
XIII.
This Notice shall come into force as of the date of issuance.
The People’s Bank of China
January 24, 2006
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