People's Bank of China, Verification of the Trading and Circulation of Bonds in the National Interbank Bond Market Rules

Promulgated: December 7 2004
Effective: December 15 2004
Interpreting authority: People's Bank of China (PBOC)
Applicability: The term "bonds" as used in the Rules shall have the same meaning as that given to the same term in the Administration of Bond Transactions in the National Interbank Bond Market Procedures (Article 2).
Matters related to the trading and circulation in the interbank bond market of short-term bonds of securities companies shall be handled in accordance with the Administration of Short-term Bonds of Securities Companies Procedures (Article 3).

Main contents: Bond issuers applying for trading and circulation of bonds issued by them in the interbank bond market (hereafter, Trading and Circulation) shall submit each issue to the PBOC for verification (Article 3). Issuers applying for Trading and Circulation shall comply with certain requirements such as: (1) actual bond issuance amount shall not be less than Rmb500 million; and (2) the bond holding of a single investor shall not exceed 30% of the amount issued in that particular issue (Article 4). As for information disclosure requirements, issuers shall disclose such information as bond Trading and Circulation announcement, annual reports, ad hoc reports and follow-up credit rating results (Article 11). In case of any material events such as capital reduction, mergers, division, dissolution, trusteeship, closing of business and filing of bankruptcy petitions of issuers happened during the period of bond Trading and Circulation, issuers shall notify the market participants immediately and report the same to the PBOC (Article 14). During the period of bond Trading and Circulation issuers may not engage in bond transactions with their own issued bonds as subject assets, with the exception of early redemption by issuers in accordance with the relevant provisions or contract (Article 18).
Related legislation: PRC People's Bank of China Law (Revised), Dec 27 2003, CLP 2003 No.1 p4; PRC Administrative Licensing Law; People's Bank of China, Administrative Licensing Implementing Procedures; People's Bank of China, Administration of Bond Transactions in the National Interbank Bond Market Procedures, Apr 30 2000, CLP 2000 No.6 p9; Administration of Short-term Bonds of Securities Companies Procedures, Oct 18 2004, CLP 2004 No.10 p10