Chapter I General Provisions

Article 1 These Rules are formulated according to the Law of the People's Republic of China on the People's Bank of China so as to regulate the issuance of financial bonds in the national inter-bank bond market.

Article 2 Financial bonds in these rules refer to the securities issued and with principal redemption and interest payment effected as agreed by financial institutions with legal person status domiciled within the territory of the People's Republic of China.

Financial institutions with legal person status in these rules include policy banks, commercial banks, finance companies and other financial institutions.

Article 3 The People's Bank of China shall regulate and supervise the issuance of financial bonds in accordance with law. Financial institutions may not issue financial bonds without the approval of the People's Bank of China.

Article 4 The issuance of financial bonds shall follow the principle of "equality, fairness, faithfulness and self-discipline". The issuers of financial bonds （hereinafter referred to as "issuers"） as well as related financial intermediaries should disclose relevant information to full extent and warn investors of the risks.

Article 5 The investment risks involved in financial bonds shall be born by the investors.

Chapter II Application and Approval

Article 6 Policy banks shall submit the application for issuing financial bonds to the People's Bank of China annually and may only issue financial bonds with the application approved by the People's Bank of China. The application for issuing financial bonds filed by the policy banks shall include total amount, maturity arrangement, issuing mode and other related information. Any adjustment regarding the application shall be subject to approval of the People's Bank of China.

Policy banks in these rules refer to China Development Bank, the Export-Import Bank of China and the Agricultural Development Bank of China.

Article 7 Commercial Banks shall satisfy the following conditions in order to issue the financial bonds:

1. having sound corporate governance system;
2. having a core capital adequacy ratio of no less than 4%;
3. being profitable in the most recent preceding 3 years;
4. maintaining adequate loan loss provisions;
5. with risk management indicators satisfying regulatory requirements;
6. no record of major violation of laws and regulations in the most recent preceding 3 years;
7. other conditions required by the People's Bank of China.

Based on the filed application, the People's Bank of China may exempt the commercial banks from certain specific items of the above-mentioned conditions.

Article 8 Finance companies of enterprises groups shall satisfy the following conditions in order to issue financial bonds:

1. having a sound corporate governance system;
　　
2. having a capital adequacy ratio of no less than 10%;
3. with risk management indicators satisfying regulatory requirements;
4. no record of major violation of laws and regulations in the most recent preceding 3 years;
5. other conditions required by the People's Bank of China.

Article 9 Conditions that other financial institutions shall satisfy to issue financial bonds will be stipulated separately.

Article 10 Financial institutions （excluding policy banks） shall submit the following documents to the People's Bank of China for the issuance of financial bonds:

1. an application report for the issuance of financial bonds;
2. a written consent produced by the authoritative institution specified in the issuer's charter of association or similar document;
3. a written consent produced by the supervisors for the issuance of the financial bonds;
4. the audited financial statements and the auditing reports of the issuer for the most recent preceding 3 years;
5. the Prospectus;
6. the issuance announcement or the issuance charter;
7. the underwriting agreement
8. a special report on the redemption plan and assurance measures;
9. a credit rating report of the financial bonds and relevant information on follow-up credit rating arrangements produced by a credit rating institution;
10. legal opinions in writing produced by the issuer's counselor;
11. other documents required by the People's Bank of China;

If the issuance of the financial bonds is backed by a guarantee, the guarantee agreement and a report of the guarantor's financial situation and credibility shall also be submitted.

The People's Bank of China may ask the regulatory agency of the issuer to present its supervisory opinion as needed.

Article 11 Policy banks shall submit the following documents to the People's Bank of China when issuing financial bonds:

1. an application report for the issuance of financial reports;
2. the audited financial statements and the auditing reports of the issuer for the most recent preceding 3 years;
3. rules for the issuance of the financial bonds;
4. underwriting agreement;
5. other documents required by the People's Bank of China;

Article 12 The People's Bank of China shall make a response to the application for the issuance of financial bonds within the time period specified in relevant provisions of the Rules of the People's Bank of China for the conduct of Administrative Approval.

Chapter III Issuance of financial bonds

Article 13 Financial bonds may be issued in the national inter-bank bond market or to targeted investors.

Article 14 The issuance of the financial bonds may be conducted either once in aggregate or in installments under the specified quotas. If it is conducted in the latter form, the issuers shall explain the installment arrangement for the whole issuance plan in the Prospectus. The issuers （excluding policy banks） shall file with the People's Bank of China all the documents required by items 5, 6, 8 and 9 of Article 10 five working days before every installment issuance of the financial bonds. Disclosure of relevant information in accordance with requirements of the People's Bank of China is also necessary.

Policy banks shall file with the People's Bank of China all the documents required by items 2 to 4 of Article 11 five working days before every installment issuance of the financial bonds. Disclosure of relevant information in accordance with requirements of the People's Bank of China is also necessary.

Article 15 The issuance of financial bonds shall be subject to the credit rating by a rating institution qualified for rating financial bonds. The credit rating institution shall conduct follow-up credit rating on the financial bonds annually after their issuance. In case of occurrence of any significant events which have an impact on the credit rating of the financial bonds, the credit rating institution shall make corresponding adjustment of the rating of the financial bonds and make it known to the investors.

Article 16 The issuers shall organize an underwriting syndicate in order to issue the financial bonds. The underwriter may distribute its underwritten financial bonds to other investors during the issuing period.

The issuers and the underwriters shall specify in the underwriting agreement their rights and obligations and make relevant disclosures.

Article 17 The underwriting of financial bonds may take the form of contracted underwriting, public bidding or other modalities. The underwriters shall be financial institutions and satisfy the following conditions:

1. the registered capital is no less than 200 million yuan;
2. having a relatively strong capability in bond distribution;
3. having qualified professional staff engaged in bond market business and channels for sub-underwriting bond distribution;
4. no record of major violation of laws and regulations in the most recent preceding 2 years;
5. other conditions required by the People's Bank of China.

Article 18 The issuer shall announce the following information to the underwriters when the issuance of financial bonds is conducted via public bidding.

1. informing the underwriters of the specific time for public bidding, the bidding method, the bidding assets, the confirmation of successful bidding, contingency bidding scheme and other information at least three working days before the start of bidding.
2. sending bidding to the underwriters when the bidding commences;
3. the issuer shall announce the bidding result immediately after the ending of the bidding process and make a public notice as to the bidding result of the financial bonds. The underwriters shall fulfill their underwriting after they win the bid.

Article 19 The issuance of financial bonds through public tendering shall be carried out through the bonds issuing system of the People's Bank of China.

The issuers and relevant parties involved in tendering are neither allowed to disclose the bidding information nor intervene the bidding process. The People's Bank of China will carry out on-site supervision of the bidding process.

Article 20 The issuers are not allowed to buy or purchase in any disguised form financial bonds issued by themselves.

Article 21 The issuers shall issue the financial bonds within sixty working days after the People's Bank of China grants the approval and complete the issuance within the specified period of time.

In case the issuers fail to complete the issuance within the specified period of time, the original approving document is invalidated automatically. The issuers are not allowed to continue the current issue of the financial bonds unless they submit a separate application in accordance with these rules.

Article 22 The issuer shall make a written report about the issuing process to the People's Bank of China within ten working days after the issuance of the financial bonds completes.

Article 23 The financial bonds to be issued to targeted investors may be exempted from a credit rating as agreed by the investors, but such financial bonds may only be transferable among these specific investors.

Article 24 Trading of the financial bonds shall follow relevant regulations on bond transactions of the national inter-bank bond market.

Chapter IV Registration, Trust and Redemption

Article 25 China Government Securities Depository Trust & Clearing Company Ltd. （hereinafter referred to as China Clearing Company） is the institution that provides registration and trust services for financial bonds.

Article 26 When the issuance of financial bonds is complete, the issuers shall timely confirm the debtor-creditor relationship with the China Clearing Company which shall make registration for the bonds promptly.

Article 27 Prior to the date （ including the day） of interest payment or redemption of the financial bonds, the issuers shall transfer the corresponding fund to the bond-holder's designated financial account.

Chapter V Information Disclosure

Article 28 The issuers shall perform the obligation of information disclosure before the issuance and maturity of the financial bonds. Information shall be disclosed through the websites of Chinamoney.com.cn or Chinabond.com.cn.

Article 29 The issuers shall ensure a truthful, accurate, complete and a timely disclosure. There shall be no falsified description, misleading statements or major omissions.

The issuers and relevant insiders are not allowed to reveal information before its disclosure.

Article 30 When a major event occurs that affects an issuer's capability to fulfill its debt obligations, the issuer shall in the first instance report to the People's Bank of China and make relevant disclosure in a way prescribed by the People's Bank of China.

Article 31 Where the People's Bank of China has approved the issuance of the financial bonds, the issuers shall disclose the contents of the prospectus and the public announcement three working days before each issue of the financial bonds.

The issuers shall explain in the prospectus and the public announcement repayment priority as well as the investment risks of the financial bonds, and disclaim in a noticeable place that " Investors shall carefully read this document and relevant information-disclosed documents and make independent investment judgements. The approval of the issuance of the bond by supervisory departments implies neither an assessment of the investment value nor a judgment of the investment risks of the current bond issue".

Article 32 Before the maturity of the financial bonds, the issuers shall disclose an annual report to the investors before April 30 of each year, which includes an account of the issuers' performance situation of the previous year, the financial reports audited by certified public accountants, major lawsuits involved and other matters.

Article 33 The issuers shall make a public announcement on interest payment two working days before each interest payment date of the financial bonds, and five working days before the date of final interest payment and redemption.

Article 34 Before the maturity of the financial bonds, the issuers shall disclose the follow-up credit rating report before July 31 of each year.

Article 35 The disclosed financial statements shall be audited by certified public accountants and accompanied by auditing reports; the legal opinions and the credit rating reports involved in the disclosure of information shall be produced respectively by practicing lawyers and credit rating institutions capable of rating financial bonds. Relevant documents produced by the above-mentioned certified public accountants, lawyers and credit rating institutions may not contain any falsified descriptions, misleading statements or major omissions.

Article 36 The issuers shall send relevant information disclosure documents to the National Inter-bank Lending Borrowing Center （hereinafter referred to as the "NILBC"） and China Clearing Company respectively, which will make disclosure through the websites of Chinamoney.com.cn and Chinabond.com.cn respectively.

The NILBC and China Clearing Company shall provide services for information disclosure of financial bonds, and shall report to the People's Bank of China any violation of the rules related to information disclosure and make public the misconduct.

Article 37 Where the financial bonds are issued to targeted investors, the content and format of information disclosure shall be stipulated in the prospectus and the issuance instructions. The information shall be disclosed to the investors of the financial bond.

Chapter VI Legal Liability

Article 38 The People's Bank of China shall issue a penalty in accordance with Article 46 of the Law of the People's Republic of China on the People's Bank of China on the issuer found involved in any of the following activities.

1. issuing financial bonds without the approval of the People's Bank of China;
2. issuing financial bonds exceeding the granted limit;
3. manipulating market prices or misleading investors;
4. failing to submit reports or disclose information as required;
5. other activities in violation of these rules.

Article 39 The People's Bank of China shall issue a penalty in accordance with Article 46 of the Law of the People's Republic of China on the People's Bank of China on the underwriter found involved in any of the following activities.

1. soliciting underwriting business involving unfair competition;
2. disclosing false information or revealing non-public information;
3. other activities in violation of these rules.

Article 40 The People's Bank of China shall issue a penalty in accordance with Article 46 of the Law of the People's Republic of China on the People's Bank of China on the trustee found involved in any of the following activities.

1. misusing the financial bonds in the trust account;
2. registering the financial bonds incorrectly or losing the registration documents;
3. disclosing false information or revealing non-public information;
4. other activities in violation of these rules.

Article 41 In the case there are falsified description, misleading statements or major omissions in the documents produced by the certified public accountants, lawyers or credit rating institutions, the People's Bank of China shall issue a penalty in accordance with Article 46 of the Law of the People's Republic of China on the People's Bank of China on the above-mentioned institutions or persons. If the misconduct has incurred a loss to other people, those held accountable shall bear certain civil liability according to law.

Chapter Seven Supplementary Provisions

Article 42 These rules shall also apply to the issuance of subordinated debts or asset-backed securities by the commercial banks in the national inter-bank bond market, except for otherwise stipulated.

Article 43 The People's Bank of China is responsible for interpretation of these rules.

Article 44 These rules shall enter into effect on June 1, 2005, and the Provisional Rules on the Issuance of Financial Bonds in the Market by Policy Banks are invalidated at the same time.

注意事项：

在本英文翻译版本同汉语原版本出现任何不符时，以汉语版本为准。

Important Notice:

In case of this English version has any discrepancy with the original version in Chinese, the Chinese version shall prevail.