Chapter 1 Principle Rules

Article 1To Regulate bond transactions and circulation in China Inter-Bank Market,and to protect investors' legal rights,this rule guideline is compiled according to No.9 Announcement published by PBC on year 2015, other relevant laws, regulations, normative documents and self-regulatory rules.

Article 2 This rule book applies to all legally issued bonds traded at National Interbank Funding Centre (hereinafter referred to as " CFETS ").

Bond securities include but not limited to government bonds, central bank bills, credit bonds such as corporate bonds, company bonds and DCM bonds, as well as asset-backed securities,etc.

Article 3 CFETS makes no judgment over bond investment risk or yield, even though bond transactions and circulation occur at CFETS.

Chapter 2 Bond Securities Transaction and Circulation

Article 4Issuers and primary underwriters are responsible for submitting following documents to CFETS on bond security registration date：

(1)List of initial holders and corresponding holding amount

(2)Registration form of transaction and circulation

Issuer or primary underwriter may also entrust bond security registration and depository service institution to provide CFETS with the list of initial holders and corresponding holding amount.

For private issuance, in addition to above files, issuers and primary underwriter ought to submit the scope of investors to CFETS on bond registration date. PPN issuers may entrust National Association of Financial Market Institutional Investors (hereinafter referred to as "NAFMII") to transmit abovementioned information to CFETS.

Article 5 CFETS will finalize transaction and circulation procedure in one business day after receiving all required coupon information for bond trading.

Article 6CFETS will adjust bond trading elements according to modification information on bond transaction and circulationonce received.

Article 7 When introducing innovative and exotic items into bond issuance, issuers shall submit prospectus to CFETS for choosing proper trading mode.

Chapter 3 Information Disclosure Requirements on Significant Events in Transaction and Circulation Period

Article 8Bond (excluding treasury bonds and central bank bills) issuers shall be abide to relevant rules to provide constant information disclosure through Chinamoney.com or other information channel nominated by PBC.

Article 9Information disclosure obligators such as issuers, credit rating agencies and other insiders are strictly forbidden from participating in inside trading, market manipulation and any other activities jeopardizing market integrity before relevant information is properly disclosed.

Article 10Issuers and other obligators ought to disclose information in authentic, accurate and comprehensive manner. Any intention or actions to falsify, misleading and omitting on factual description is strictly forbidden. Obligator needs to explain to CFETS and makes public announcement if the information disclosed contains anything falsified, omitted or misleading.

Article 11In bond circulation period, if any situation described in Article 9 occurs, issuers shall report to market participants through Chinamoney website and other publication channel designated by PBC immediately.

Article 12After issuers disclosing significant events, if such events may have major impact on issuers' solvency, relevant information shall be disclosed on Chinamoney website within two business days.

Article 13If bond prospectus includes annex regarding principal and coupon payments, interest rates, tenors and such, issuers ought to announce on Chinamoney website and other publication channel designated by PBC when meeting annex requirements or choosing to exercising underlying rights.

Article 14Issuers shall conduct information disclosure in accordance with relevant laws and regulations, normative documents, self-regulatory rules, in the event that such rules are stricter in information disclosure.

Article 15CFETS shall review and assess the form of disclosure documents provided by information disclosure obligators according to relevant laws, administrative regulations, normative documents, self-regulatory rules, other regulatory files and this rule book. Nevertheless, CFETS has not responsibility to guarantee the authenticity on information disclosed and materials provided.

Chapter 4 Information Disclosure Requirements on Specific Transactions

Article 16CFETS provides facilitates of trading information disclosure to investors who disclose trading information to the market through CFETS trading system in accordance with this rule book. Where there is special arrangement for treasury bonds and central bank bills, such arrangement shall be applied.

Bond transactions includes cash bond, pledged repo, outright repo, securities lending, bond forward, bond pre-listing and est.

Article 17Within bond circulation period, issuers planning to buyback part of or all debt issued in the secondary market shall follow relevant regulations or contract terms and make public announcement to market participants, with regard to payback amount, price and method. when choosing buyback method, issuer shall treat all investors equally.

Issuer shall disclose details to all market participants on the date when the proposed buyback is completed.

Article 18Within bond circulation period, if single investor holds more than 30% of that particular bond outstanding, CFETS shall disclosure the holding information once provided by bond registration, custody and settlement institutions to all market participants.

Article 19Transactions taken by parent company or other subsidiaries (branches) under same parent company include:

(1) Transaction counterparties are independent legal entities, but one of them is under control of the other in investment proportion, shareholding or contractual agreement;

(2)Transaction counterparties are independent legal entities (or branches) and under control of the same parent company (or head company);

(3)Transaction counterparties are head company and its branch.

Article 20Bond transactions between assets manager's proprietary account and trust account, or between different trust accounts:

(1) One party in transaction is financial institutional participant, and the counterparty of this transaction is the portfolio manager of the same financial institution or non-legal entity product managed by the same financial institution;

(2)Both counterparties in transaction are non-legal entity participants, and managed by the same financial institution.

Article 21Before participating in transactions mentioned in Article 19 and Article 20 of this rule book, investors shall establish trading management procedure, formalize pricing mechanism, internal control, internal assessment procedure, information disclosure and submit relevant documentation to CFETS.

Article 22Both counterparties in transaction or assets manager ought to disclose information of the transactions mentioned in Article 19 and Article 20to all market participants within first 5 business day of each month. Information disclosure statement shall include details such as names of transaction counterparties, underlying securities, dealt prices and volume, est.

When single repo transaction amount (accumulative volume of same counterparty and tenor) exceeds 1 billion Yuan, or single trade of other type of bond transactions (accumulative volume of same counterparty and tenor) exceeds 200 million Yuan, participants have the obligation of reporting to CFETS explaining trading incentive, pricing reference and possible impacts within 5 business day.

When both counterparties of transaction are under control of National Treasury Department, State-owned Assets Supervision and Administration Commission or its platform companies, or transactions mentioned in Article19 and Article 20 are concluded in Central Limit Order Book(CLOB)trading method, then no information disclosure responsibility is required.

When both counterparties of transaction are under control of state assets management committee or similar state assets holding platform companies, information disclosure exemption can be applied at CFETS.

Article 23Issuers are not allowed to use self issued bond for outright repo transactions. When using self issued bond as collateral for pledged repo transactions, issuers shall treat other similar bond securities in equal manner and any additional benefit or condition for using self issued are strictly prohibited.

When issuers using self issued bond as collateral for pledged reverse repo transactions, intraday reverse repo trading volume is not allowed to exceed 5% of last 30-day average daily trading volume; if the bond issuance amount outweigh 10% of that particular bond outstanding in inter-bank bond market, when issuers using self issued bond as collateral for pledged reverse repo transactions, intraday reverse repo trading volume is not allowed to exceed 2% of last 30-day average daily trading volume.

Article 24Before using self issued bond as collaterals for pledged repo transactions, issuers shall establish trading management and risk control procedures, build firewallmechanism separating primary issuance and secondary trading in order to prevent violation activities. Aforementioned trading management and risk control procedures shall be submitted to CFETS for recordation.

Article 25Issuer shall disclose information of pledged repo transactions which using self issued bonds, including tenors and VWAP on next business day.

Chapter 5 Fair Trading

Article 26When investors participants in market activities mentioned in Article 19, Article 20and Article 23 in this rule book, deals shall be done at market price. Tunneling and market price interfering activities are strictly prohibited.

If above transactions are done at price deviated from normal market level, investors shall file pricing reference and explanation on price discrepancy to CFETS, and provide supporting evidence according to CFETS requirements. If the transaction is considered as tunneling and market price interfering based on CFETS assessment, CFETS shall send notification letter to investor's compliance department, investigate such investor and report to PBC, while copy to NAFMII.

Article 27Valid market price level references include dealt price on market maker's quote, volume weighted average price of the market, bond valuation and yield curves published by CFETS and bond registration, custody and settlement institutions.

Article 28CFETS oversees trading activities mentioned in Article 23of this rule book and open to receive report from all market participants. CFETS shall conduct issuer investigation and report to PBC and copy to NAFMII in the event that following situation occurs. If following situations are confirmed by the investigation, CFETS will take action based on Article 39of this rule book.

(1) Violating holding overhead limitation mentioned in Article 23;

(2) Using self issued bond as collateral for repo transaction and the dealt price is significantly better than same quality bond as collateral repo transactions.

(3)The portion of using self issued bond as collateral for repo transaction is higher than portion such bond's outstanding versus the entire market's outstanding;

(4)Other suspicious bond price interfering activities involving using self issued bond as collaterals for repo transactions.

Chapter 6 Trading Information Database

Article 29CFETS serves as trading information database in inter-bank bond market. Market participants shall confirm bond transactions in CFETS trading system, and conduct settlement in clearing and settlement at bond registration, custody and settlement institutions based upon it.

Chapter 7Suspension, Resuming and Termination of Trading Service

Article 30To protect market integrity, CFETS has right to suspend, resume and terminate relevant bond securities trading service based on market conditions and issuer's application, and inform bond registration, custody and settlement institutions. Where there is special arrangement for treasury bonds and central bank bills, such arrangement shall be applied.

Article 31In the event that following situations occur before the information disclosure is made, issuers ought to apply for trading halt from CFETS on relevant bond securities. After properly disclosing information, the trading halt can be lifted:

(1)Uncertainty and confidentiality leaking risk involving with significant event for reporting, or confidentiality is breached before disclosure.

(2)Non-disclosure information appears in public media and may or have caused actual influence.

Article 32CFETS has right to suspend bond trading till proper disclosure is made if the issuer has not followed rules in Chapter 3 to disclose significant events.

Article 33While bond trading is suspended by CFETS, the information disclosure obligator ought to provide explanation on trading halt, and constant feed on event progression.

Article 34 CFETS has right to suspend trading and circulation service on certain bonds if abnormal price fluctuation happens and has significant negative impact on market pricing function.

Article 35During bond transaction and circulation, CFETS shall suspend trading service caused by incorrect bond information submission till ramification is provided

Article 36 CFETS shall stop bond trading service if situations mentioned in Article 15 of this rule book occur.

Chapter 8 Actions taken against violations

Article 37 Below are violation activities:

(1) Fail to submit relevant documents for transactions and circulation on bond registration date;

(2) Fail to provide constant information disclosure when bond security is outstanding;

(3)Fail to fulfill active duty on trading information disclosure and reporting;

(4)Bond price manipulation by repo transactions as issuer;

(5)Using bond transactions to conduct tunneling and influence bond market price;

(6)Apply for trading halt and bond circulation without following this rule book and lead to abnormal trading activities;

(7)Other rule breaching activities

Article 38CFETS has right to conduct a thorough investigation on legal entity considered rule breaching under Article 37, and relevant party has obligation to provide documents and materials according to CFETS requirements. Market participants has right to report violation activity to CFETS.

Article 39If a market participant fouls under Article 37, CFETS shall proceed violations in PBC requirements and take below actions according to seriousness of the consequence, then report to PBC while copy to NAFMII.

(1)Verbal warning；

(2)Written warning；

(3) Questioning

(4) Circulate notice of criticism

(5) Trading login suspension

Article 40The market participant has right to appeal at CFETS when objection arise.

Chapter 9 Annex

Article 41CFETS reserves the rights of interpretation and alteration of this Rules.

Article 42This Rule book comes into effect upon the day of promulgation.