Detailed Rules for the Implementation of Recordation Administration of the Entry of Qualified Institutional Investors into the Interbank Bond Market

· Document Number：Announcement No. 1 [2016] of the Shanghai Head Office of the People's Bank of China

· Area of Law： Banking & Finance

· Level of Authority： Local Regulatory Documents

· Date issued：05-18-2016

· Effective Date：05-18-2016

· Status： Effective

· Issuing Authority： People's Bank of China, Shanghai Head Office

Announcement of the Shanghai Head Office of the People's Bank of China
(No. 1 [2016])
In accordance with the provisions of Announcement No. 8 [2016] of the People's Bank of China (“PBC”), the Shanghai Head Office of the PBC has developed the Detailed Rules for the Implementation of Recordation Administration of the Entry of Qualified Institutional Investors into the Interbank Bond Market, which are hereby issued for implementation.
Detailed Rules for the Implementation of Recordation Administration of the Entry of Qualified Institutional Investors into the Interbank Bond Market
Article 1 These Detailed Rules for Implementation are developed in accordance with the provisions of Announcement No. 8 [2016] of the PBC (hereinafter referred to as the "Announcement") for the purpose of further improving the work of recordation of the entry of qualified institutional investors into the interbank bond market.
Article 2 For the purposes of these Detailed Rules for Implementation, the term “qualified institutional investors” means domestic institutional investors that meet the requirements of the Announcement, including qualified institutional investors with legal person status and qualified institutional investors without legal person status.
Article 3 Qualified institutional investors that enter the interbank bond market shall undergo recordation formalities online in accordance with Announcement No. 1 [2015] of the Shanghai Head Office of the PBC.
Article 4 To apply for recordation, a qualified institution investor with legal person status shall submit the following materials to the Shanghai Head Office of the PBC:
(1) The duplicate of its legal person business license, and duplicates of its relevant financial business permits.
(2) Statements that it has a sound corporate governance structure, and a robust internal control and risk management mechanism, among others.
(3) Statements that its funds for bond investment come from sources that are in compliance with laws and regulations.
(4) Descriptions on its bond investment personnel, including, but not limited to, the resumes of the person in charge of the business on the interbank bond market, department heads, and personnel engaged in the front-office, middle-office and back-office operations, and the certificates obtained thereby for receiving training on the interbank bond market.
(5) A written commitment that it has appropriate capabilities to identify and tolerate risks, and is aware of, and shall independently bear, the risks in bond investment.
(6) Statements that it engages in business operations in compliance with laws and regulations, and has no major violation of laws and regulations over the last three years in terms of its bond business.
(7) A written commitment that it shall be liable for the veracity, accuracy and integrity of the materials submitted for recordation, and that such materials contain no false records, misleading statements and material omissions.
(8) Other materials required by the PBC.
Article 5 A qualified institution investor without legal person status shall have its manager or custodian apply to the Shanghai Head Office of the PBC for recordation by submitting the following materials:
(1) Descriptions of the basic information on the relevant product.
(2) Certification documents showing that the establishment of the product is in compliance with relevant laws, regulations and industry regulatory provisions, and that the product has been approved or recorded by relevant administrative department or its authorized industry self-regulatory organization in accordance with the law.
(3) The custody contract of the product, and the power of attorney issued for custody business if the custodian is an authorized branch of a financial institution.
(4) A written commitment made by the manager or the custodian that the product is in compliance with relevant laws, regulations and regulatory provisions, that it shall be liable for the veracity, accuracy and integrity of the materials submitted for recordation, and that such materials contain no false records, misleading statements and material omissions.
(5) Other materials required by the PBC.
Article 6 The manager or the custodian shall, when applying for recordation of a qualified institutional investor without legal person status for the first time each year, also submit the following materials:
(1) The enterprise legal person business license and relevant financial business permits of the manager or the custodian; and, in the event that the manager manages a private equity fund, statements that it has been registered with the relevant industry self-regulatory organization, its net assets are not less than ten million yuan, and its size of paid-up assets under management ranks top in the industry .
(2) Statements that the manager or the custodian has a sound corporate governance structure, and a robust internal control and risk management mechanism, among others.
(3) The resumes of the person in charge of the business on the interbank bond market, department heads, and personnel engaged in the front-office, middle-office and back-office operations of the manager or the custodian and the certificates obtained thereby for receiving training on the interbank market.
(4) Statements that the manager or the custodian engages in business operations in compliance with laws and regulations, and has no major violation of laws and regulations over the last three years in terms of its bond business.
(5) Statements that the custodian shall place the entrusted product under independent custody, and shall set up separate accounts to manage and conduct independent accounting of the funds of the principal.
(6) Written commitment made by the manager or the custodian that it shall be liable for the veracity, accuracy and integrity of the materials submitted for recordation, and that such materials contain no false records, misleading statements and material omissions.
(7) Other materials required by the PBC.
The manager or the custodian is not required to repeatedly submit materials listed above that have no change compared with the previous year.
Article 7 The Shanghai Head Office of the PBC shall, in accordance with the prescribed conditions and procedures, accept recordation applications, and issue recordation notices which shall be valid for three months from the date of issuance. Applicants who re-apply for recordation shall explain relevant situations.
Article 8 A qualified institutional investor that needs to change relevant recordation information shall submit an application and relevant materials to the Shanghai Head Office of the PBC. A qualified institutional investor that needs to exit the interbank bond market shall undergo the formalities for network connection termination and account cancellation in a timely manner.
Article 9 These Detailed Rules for Implementation shall be subject to interpretation and revision by the Shanghai Head Office of the PBC.
Article 10 These Detailed Rules for Implementation shall come into force on the date of issuance.
Shanghai Head Office of the People's Bank of China
May 18, 2016