To regulate information disclosure of asset-backed securities, safeguard the legal rights of investors, ensure a smooth progress of the pilot asset-backed securities and promote the healthy development of the inter-bank bond market, the People’s Bank of China formulates and is hereby promulgating the Rules for the Information Disclosure of Asset-backed Securities. These Rules shall enter into effect on date of promulgation.

The People’s Bank of China

June 13, 2005

Rules for the Information Disclosure of Asset-backed Securities（Unofficial Translation）

Article 1  These Rules are formulated in accordance with the Administrative Rules for the Pilot Securitization of Credit Assets (People’s Bank of China Announcement No. 7 [2005]) and other rules so as to regulate information disclosure of asset-backed securities, safeguard the legal rights of investors and promote the development of the bond market.

Article 2  Information disclosure of the entrusted institution of asset-backed securities (hereinafter referred to as the entrusted institution) shall be conducted via the websites of Chinamoney.com.cn, Chinabond.com.cn or other channels stipulated by the People’s Bank of China.

Article 3  The entrusted institution shall ensure the truthfulness, accuracy and completeness of disclosed information. There shall be no falsified description, misleading statements or major omissions.

According to the stipulation of trust contracts or service contracts, the initiating institution and the service-providing institution designated by the entrusted institution shall provide related information reports to the entrusted institution and ensure the truthfulness, accuracy and completeness of the information provided.

Article 4  Information insiders such as the entrusted institution, the service-providing institution for securitization, the National Inter-bank Lending and Borrowing Center (hereinafter referred to as the NILBC), the China Government Securities Depository Trust & Clearing Company Ltd ( hereinafter referred to as the China Clearing Company) are not allowed to reveal the information before disclosure.

Article 5  The entrusted institution shall release the issuance charter, the credit rating report, the prospectus and the name list of the underwriting syndicate to investors five working days before the issuance of the asset-backed securities.

Where asset-backed securities are issued in installments, information relating to its first issue shall be disclosed in accordance with the first provision of this article, while the entrusted institution shall only release the supplementary issuance charters five working days before the following issues.

Article 6  The entrusted institution shall explain in the issuance charter the liquidation sequence as well as investment risks of the asset-backed securities, and declare in a noticeable place that “ Investors shall carefully read this document and other relevant information-disclosing documents and make independent investment judgments. The approval of the issuance of the said securities by administrative organs implies neither an assessment of the investment value nor a judgment of the investment risks of the said securities”.

Article 7  The entrusted institution shall disclose the issuance result of the asset-backed securities on the day the issuance completes or on the immediate following working day.

Article 8  Before the maturity of the asset-backed securities, the entrusted institution shall announce the trusteeship report (the compiling requirements are attached) 3 working days before the principal redemption and interest payment of each issue of the asset-backed securities. The report shall reveal the status of the investment pool of each corresponding issue of the asset-backed securities as well as information in relation to the principal redemption and interest payment of asset-backed securities of each level. The annual trusteeship report of the previous year audited by certified public accountants shall be disclosed on April 30 every year.

Article 9  The entrusted institution shall make relevant arrangements with a credit rating institution regarding the tracking rating of the said asset-backed securities and disclose to investors the tracking rating report of the previous financial year before July 31 each year.

Article 10  Where a general meeting of the asset-backed security holders is to be held, the convener shall, at least 10 days in advance, announce the time, venue, mode, issues to be reviewed, procedures and voting method, etc. of the general meeting. In addition, the resolution of the general meeting shall be disclosed within 10 days after the conclusion of the general meeting.

Article 11  In cases when an unexpected major event takes place and might have substantial impact on the value of the asset-backed securities, the entrusted institution shall report to the People’s Bank of China in addition to submitting information-disclosing documents to the NILBC and China Clearing Company within 3 working days after the occurrence of the event.

The major events referred to in this article include but are not limited to the following:

1) Occurrence or expected occurrence of the default of the entrusted institution in terms of timely principal redemption and interest payment of the asset-backed securities and other events that might have a negative impact on the investors’ rights;

2) Violation of the laws or regulations or breach of contracts by the entrusted institution and service-providing institution for securitization, which might have a negative impact on the investment value of the asset-backed securities;

3) Substantial change of the third-party guarantor of the asset-backed securities;

4) Change of credit rating of the asset-backed securities;

5) Other events that shall be announced according to stipulations of the trust contract;

6) Other events that shall be announced according to the stipulations of the People’s Bank of China and China Banking Regulatory Commission;

7) Other events that shall be announced according to laws or administrative regulations.

Article 12  The NILBC and China Clearing Company shall disclose the related documents no later than 1 working day after they receive documents of information disclosure.

Article 13  Information disclosure of asset-backed securities is not only subject to these Rules but also the Administrative Rules for the Trading and Circulation of Bonds in the National Inter-bank Bond Market ( People’s Bank of China Decree No. 2 [2000]), the Administrative Rules for the Issuance of Financial Bonds in the Inter-bank Bond Market (People’s Bank of China Decree No.  [2005]) and the Approving Guidance on the Transaction and Circulation of Bonds in the National Inter-bank Bond Market ( People’s Bank of China Announcement No. 19 [2004] ) and other related rules.

Article 14  The People’s Bank of China is responsible for the interpretation of these Rules.

Article 15  These Rules shall enter into effect on date of promulgation

Annex:

Compiling Requirements for the Report of the Entrusted Institution

1.      Names and addresses of the entrusted institution and the service-providing institution for securitization.

2.      Information about principal redemption and interest payment, which includes the counted paid-in amount of the principal, outstanding balance of the principal both at the beginning and end of the current period, coupon rate of the security, information about principal redemption and interest payment for the current period, information about interest in arrears for the current period, information about loss of the principal for the current period, credit rating situation, etc.

3.      Information about characteristics of the asset pool for the current period, which includes outstanding balance of the loans, total amount of the loans, weighted average interest rate of loans and weighted average remaining term of the loans, etc.

4.      Information about the list of principals for the current period ( including normal amount of principal redemption, amount of principal settled in advance, amount of principal redeemed in advance, amount of disposition of principal callback as well as repurchase of the principal of the loans) as well as the list of interests (including the expenses of tax and fees) in the asset pool.

5.      Information about repayment in advance, repayment in arrears, breach of contract, disposition, disposition of callback, loss, etc. of the asset pool.

6.      Information about credit rating enhancement both internally and externally.

7.      Information about the fiduciary assets going through a lawsuit procedure in the asset pool; progress of the lawsuit.

8.      Information about the total amount of the investment income or loss arising from the approved investment activities based on the trust contract.

9.      Other information that shall be disclosed.