商业银行柜台记账式国债交易管理办法 Order of the People's Ba

中国人民银行令[2002]第2号

颁布日期：20020131 　实施日期：20020131 　颁布单位：中国人民银行

[2002] No.2

January 31, 2002

To regulate the book-entry government bonds trading over the counter of commercial banks and encourage healthy development of bond market, the People's Bank of China stipulated the Administration Rules on the Book-entry Government Bonds Trading over the Counter of Commercial Banks. Now it enters into force after the passage by the Executive Meeting of the People's Bank of China.

Attachment:

Procedures on the Book-entry Government Bonds Trading over the Counter of Commercial Banks

Chapter I General Provisions

Article 1 To regulate book-entry government bonds trading over the counter of commercial banks, facilitate investor's trading activities and protect their legal rights and encourage the healthy development of the bond market, the People's Bank of China stipulated the Procedures in accordance with relevant laws and regulations.

Article 2 The book-entry government bonds (hereinafter referred to as bonds) defined herein refer to bonds designated by the Ministry of Finance and approved by the People's Bank of China to be traded over the counter of commercial banks.

Article 3 Bond trading over the counter of commercial banks (hereinafter referred to as over-the-counter bond trading) defined herein refers to trading activities conducted by commercial banks through their outlets with government bond investors, including bond custody and settlement.

Article 4 After consulting with the Ministry of Finance, the People's Bank of China can approve qualified commercial banks to undertake over-the-counter bond trading.(hereinafter referred to as undertaking banks)

Article 5 Investors hereof are individuals or enterprises who trade bonds with commercial banks through commercial banks' outlets. Financial institutions shall not buy or sell bonds through commercial banks' outlets.

Article 6 Over-the-counter bond trading shall follow the principle of fairness and integrity. Investors shall take the relevant risks alone.

Article 7 Over-the-counter traded bonds have a two-tier custody system: the Central Government Bond Registration and Clearing Corporation Ltd. (Hereinafter referred to as Central Clearing Co.) is the primary custodian designated by the People's Bank of China, while the undertaking banks are the secondary custodian.

The bond custody account adopts the real name system.

Article 8 The Central Clearing Co. shall stipulate business standards for over-the-counter bond tradings in accordance with the Rules and regulate the exchange of relevant data.

Article 9 The People's Bank of China is the competent authority for the supervision of over-the-counter trading activities. Branches of the People's Bank of China conduct daily supervision on over-the counter trading activities of the commercial banks in their jurisdiction.

Chapter II Undertaking Banks

Article 10 A commercial bank applying to be an undertaking bank shall satisfy the following conditions:

(1) The applicant should have unified, safe and stable computerized business processing system;

(2) The applicant should have sound internal control system and risk prevention mechanism;

(3) The applicant should have a special division to be responsible for over-the-counter trading activities and qualified full-time staff;

(4) The applicant should actively participate in the inter-bank bond market and the total bond trading volume two years prior to the application should rank higher;

(5) The applicant should have been a member of the underwriter group of government bonds for three consecutive years before application;

(6) The applicant should have no serious violation records two years prior to application in the inter-bank bond market; and

(7) Other conditions required by the People's Bank of China.

Article 11 A commercial bank that applies for being an undertaking bank shall provide the People's Bank of China with the following materials:

(1) An Application Letter;

(2) A business plan for over-the-counter trading;

(3) An organizational structure and staff arrangement plan for over-the-counter trading;

(4) An internal control system and implementation rules worked out in accordance with the Rules;

(5) The current situation of computer-based business processing system and a development plan of the business processing system for conducting over-the-counter bond trading business; and

(6) Other relevant materials required by the People's Bank of China.

Article 12 The Provincial branches of an undertaking bank who apply for over-the-counter trading business shall get the approval by the People's Bank of China having consulted with the Ministry of Finance. The undertaking bank shall submit the name list of the outlets that are to launch over-the-counter trading business to local branches of the People's Bank of China and local fiscal agencies for record, and shall publish the information through China Bond Information Network or other relevant media.

Article 13 An undertaking bank shall separate the over-the-counter trading business with other bond businesses in the inter-bank bond market. Its responsible units, staffs and relevant accounts shall be managed separately.

Article 14 An undertaking bank can conduct the following businesses:

(1) Buying and selling bonds with investors as a self-managing dealers and providing two-way quotation;

(2) Opening custody accounts for bond investors and conducting custody, settlement and other relevant businesses;

(3) Selling bonds and servicing bond principle and interest through their outlets; and

(4) Handling the bond registration as collateral for investors.

Article 15 An undertaking bank has the following rights:

(1) Requiring investors provide real and effective identification documents; and

(2) Providing bid and offer prices with discretion within the established spreads.

Article 16 An undertaking bank's commitments include:

(1) Opening and maintaining accounts for investors and providing account requiring, information and consulting services;

(2) Publishing price quotations for over-the-counter trading in accordance with the Rules;

(3) Accurately and continuously keeping record of investor's bonds transactions and balances, and transmitting daily over-the-counter trading data in required forms and types to the Central Clearing Co.;

(4) Keeping investor's account information confidential; and

(5) Reporting to the People's Bank of China the information about over-the-counter trading business, serious events being reported to both the People's Bank of China and the Ministry of Finance.

Chapter III Trading and Settlement

Article 17 Over-the-counter trading shall be conducted through the over-the-counter trading business processing system (hereinafter referred to as trading system) of the undertaking bank.

Article 18 Business day for over-the-counter trading is any day from Monday to Friday, except legal holidays. An undertaking bank shall not stop over-the-counter trading without approval by the People's Bank of China.

Article 19 Investors shall open bond custody accounts in their real names, and open or designate a corresponding capital account according to the requirement of the undertaking bank.

Article 20 Investors shall provide the undertaking bank with written orders in buying or selling bonds. The undertaking bank shall maintain complete record of investors' orders in its trading system and provide investors with complete record of delivery as requested.

Article 21 The spread between the bid and offer prices made by an undertaking bank shall not be higher than the price difference set up or adjusted jointly by the People's Bank of China and the Ministry of Finance with consideration of market situation and discussion with the undertaking banks.

Article 22 Within business hours, undertaking banks shall quote unified bid and offer prices and reference yield to maturity in all their outlets undertaking over-the-counter trading business, at the same time, disclose the information to public. They shall not unquote prices at their wills; And they have the discretion to adjust their quotations according to market conditions.

Article 23 Undertaking banks shall present the following notice prominently in all their undertaking outlets: "The prices are given according to market changes, investors shall buy or sell bonds at their own risks."

Article 24 Undertaking banks shall buy or sell bonds at the disclosed prices. Were there some temporary shortage of certain kind of bond, the relevant undertaking bank may suspend selling the bond and put a report to the People's Bank of China for record. The bank shall replenish supply of the bond within two business days and resume its selling.

Article 25 The quotation unit of over-the-counter bond trading is in RMB hundred yuan, and so is the trading unit. The unit for settlement is yuan with two decimals.

Article 26 Over-the-counter trading adopts the real time settlement for delivery and payment. Undertaking banks shall conduct capital and bond settlement for investors timely, and when the trading is concluded, transfer the relevant data and settlement orders to the Central Clearing Co. as required.

The Central Clearing Co. shall, in accordance with the data and settlement orders received, finish the bond settlement between the undertaking banks' own accounts and their general broker's accounts before the start of the next business day.

Chapter IV Bond Custody and Redemption

Article 27 The Central Clearing Co. shall open dealer's accounts and general broker's accounts for undertaking banks, and record their own bonds and their clients' bonds respectively. The Central Clearing Co. shall be responsible for the authenticity, accuracy and integrity of the first-grade custodian accounts.

Article 28 An undertaking bank shall open bond custodian account for investors to record their bonds. After the Central Clearing Corporation's examination and verification, the outstanding balance recorded by the undertaking bank in the second-grade custodian accounts should be the quantity of bonds held by investors. The undertaking bank shall be responsible for the authenticity, accuracy, integrity and safety of the second-grade custodian accounts.

Article 29 Undertaking banks and the Central Clearing Corporation may charge service fees for providing custody and other relevant services.

Article 30 Undertaking banks shall strictly separate their own bonds with their investors' bonds, and shall not misappropriate investors' bonds.

Article 31 Investors may make recustody of their bonds among different undertaking banks.

Article 32 Issuers shall transfer the redeemed interest or principal to the fund account designated by the Central Clearing Corporation at least one workday before the interest-payment day or the maturity day. The Central Clearing Corporation shall after receipt transfer the above mentioned money to the undertaking bank one business day in advance, the latter shall transfer the total amount of money to the fund accounts of investors on the interest payment day or redemption day.

Chapter V Inquiry and Supervision

Article 33 Undertaking banks shall establish account information inquiry systems for over-the-counter bonds trading, while the Central Clearing Corporation shall establish an account information reviewing system. An investor may inquire about the transaction volume and outstanding balance of his or her bonds from the undertaking bank or require that the Central Clearing Corporation review his or her outstanding balance through the reviewing system. Were there any doubts, the investor may ask the undertaking bank to explain, and even report that to the local People's Bank of China branch if unsolved.

Article 34 Undertaking banks shall as stipulated transfer their over-the-counter trading data to the Central Clearing Corporation, and the latter shall check relevant accounts against the data received. The Central Clearing Corporation shall check any wrong information with the undertaking bank concerned. If the check cannot be finished before the next business day, the Central Clearing Corporation shall suspend part or all of transactions of the undertaking bank with the approval by the People's Bank of China.

Article 35 The Central Clearing Corporation shall publish the quotation information provided by undertaking banks to the public through China Bond Information web-site or the media designated by the People's Bank of China.

Article 36 With the authorization of the People's Bank of China, the Central Clearing Corporation may examine the second-grade custodian accounts of an undertaking bank.

Article 37 Undertaking banks and the Central Clearing Corporation shall report periodically to the People's Bank of China on over-the-counter trading and subject themselves to the inspection and supervision by the People's Bank of China.

Chapter VI Penalty Provisions

Article 38 A commercial bank that has committed any of the following offences shall, according to the seriousness of the offence, be punished by the People's Bank of China in the formality of circulating a notice of criticism, giving a disciplinary warning, suspending or revoking its trading status, plus a fine of no more than RMB30,000 yuan. Both the senior manager and the directly responsible personnel shall be given disciplinary punishment by their regulatory authorities. Offences against the People's Bank of China management rules governing the competence for posts on Senior Management of Financial Institutions will be punished according to the rules.

(1) Conducting over-the-counter trading business without approval;

(2) Not publishing two-way quotations as stipulated by the rules;

(3) Short-selling bonds;

(4) Conducting over-the-counter trading business out of the trading system;

(5) Not satisfying the need of investors according to the quoted prices;

(6) Suspending trading activities without proper causes;

(7) Misappropriating investors' bonds;

(8) Fabricating bond accounts' records;

(9) Change Custody for investors without following the relevant rules;

(10) Issuing false bond custody certification;

(11) Divulging investors' account secret information; and

(12) Other offences against the Rules.

Article 39 The Central Clearing Corporation shall be punished by the People's Bank of China circulating a notice of criticism or giving a disciplinary warning plus a fine of no more than RMB30000 yuan for any of the following offences. Both the senior manager and the directly responsible person shall be given a disciplinary punishment by their supervisory authorities.

(1) Causing serious losses to undertaking banks or investors because of its dereliction of duty;

(2) Publishing false information or divulging non-public information;

(3) Inducing investors and resulting in their losses;

(4) Facilitating the malicious manipulation of the market or various activities against the Rules by undertaking banks;

(5) Divulging secrets of undertaking banks and investors; and

(6) Other offences against the Rules.

Chapter VII Supplementary Provisions

Article 40 The People's Bank of China shall be responsible for the interpretation of the Rules.

Article 41 The Rules shall enter into force as of the date of its promulgation.