Shanghai Stock Exchange, Tentative Measures for the Administration of the Suitability of Investors of the Bond Market Shanghai Stock Exchange, Tentative Measures for the Administration of the Suitability of Investors of the Bond Market

(ii) local government bonds;

(iii) convertible corporate bonds;

(iv) corporate bonds of separately tradable convertible corporate bonds (Separately Tradable Bonds);

(v) corporate bonds (including enterprise bonds);

(vi) margin trading and short selling in the form of pledged bond repurchase; and

(vii) other types of trading bonds as recognised by the Stock Exchange.

Ordinary investors may conduct transactions of the following bond products:

(i) sovereign bonds;

(ii) local government bonds;

(iii) convertible corporate bonds;

(iv) Separately Tradable Bonds;

(v) corporate bonds that fulfil Article 2.2 of the Shanghai Stock Exchange, Rules for Listing of Corporate Bonds;

(vi) short selling in the form of pledged bond repurchase; and

(vii) other types of trading bonds as recognised by the Stock Exchange (Article 6).

An individual investor who fulfils the following criteria may apply to be a professional investor:

(i) the net assets in his/her securities accounts are no less than Rmb500,000;

(ii) he/she has basic knowledge on bond investment and has passed the relevant tests;

(iii) he/she has 10 or more records of bond transactions within the most recent three years;

(iv) he/she has signed the in writing with the Stock Exchange members, and has made undertakings related thereto; and

(v) he/she has no major poor integrity record (Article 8).

A legal person or another organisation that fulfils the following criteria may apply to be a professional investor:

(i) it has net assets of no less than Rmb1 million;

(ii) the net assets in its securities accounts are no less than Rmb500,000;

(iii) the relevant business personnel have basic knowledge on bond investment and have passed the relevant tests;

(iv) it has 10 or more records of bond transactions within the most recent three years;

(v) it has signed the in writing with the Stock Exchange members, and has made undertakings related thereto; and

(vi) it has no major poor integrity record (Article 9).

clp reference:3700/11.12.23/SHpromulgated:2011-12-23effective:2012-02-01