To enhance self-regulatory management of the interbank market, safeguard normal market operation and protect the legitimate rights and interests of market players, the National Association of Financial Market Institutional Investors (NAFMII) organized its members to formulate a Self-regulatory Disciplinary Rules for the Debt Financing Instrument Market of Non-financial Enterprises (the Rules). Examined and adopted by the first meeting of the Third NAFMII Council on March 1, 2012 and approved by the People’s Bank of China (PBOC), the Rules was released on June 18, 2012 and will be implemented as of October 1, 2012.

Guided by the “innovation, development, regularization and coordination” guidelines of the PBOC and adhering to the concept of “combining market development with system construction”, NAFMII pushed forward system construction amid market development and regulated market development amid system construction. Backed by the unremitting efforts and vigorous support of market members, NAFMII has initially established a comprehensive self-regulatory code system, which has played an important role in regulating conducts of the market members, preventing occurrence of noncompliant conducts, safeguarding the legitimate rights and interests of the market players, and maintaining normal order of the interbank market. With continuous expansion of market scale, increasing enrichment of innovative products and growing diversification of market participants, market members have gradually enhanced their awareness of maintaining market order and safeguarding their legal rights and interests. However, there have been increasing number of noncompliant behaviors conducted by some institutions due to their weak awareness of integrity and compliance, which have led to new situations and new problems in market development, thus the original self-regulatory action system can no longer satisfy the inherent needs of compliant market development.

To satisfy the needs of in-depth market development, take disciplinary actions against noncompliant conducts in a fair, just, reasonable and moderate manner, and respond to urgent appeal of market members, NAFMII has extensively solicited opinions of investment institutions, issuers, lead underwriters, intermediaries, experts and scholars, studied the practice and trends of the debt financing instrument market, and reviewed the past with focus on the present and with an eyes to the future. Based on these efforts, NAFMII has formulated and published the Rules in accordance with the laws and regulations of the state as well as the guide to the rules of self-regulatory organizations.

The Rules adheres to the concept of “market orientation”, focuses on maintaining the balance of the original self-regulatory code system, and guarantees the justice and soundness of the self-regulatory disciplinary procedure through constructing a systematic and sound self-regulatory code system. Besides, the Rules enriches the effective and moderate self-regulatory action measures, and balances working efficiency and operability. With a total of 31 articles, the Rules contains five parts – General Provisions, Self-regulatory Disciplinary Action Determination Mechanism, Investigation Stage, Self-regulatory Disciplinary Action Determination Stage and Supplementary Provisions, which specifies that the disciplinary action implements such a system that the self-regulatory disciplinary action meeting determines the penalties, whereby the market experts jointly review the noncompliant conduct and make disciplinary decision or opinion. Besides, the Rules defines the authorities and responsibilities of relevant entities, such as the Executive Council, the Self-regulatory Disciplinary Action Meeting and the Special Meeting of NAFMII Secretariat, in the work of self-regulatory action, sets forth major flows, such as investigation before self-regulatory penalty, disciplinary action decision and review, and lists all self-regulatory disciplinary measures for the first time in the light-heavy order, such as reputational penalty and behavioral penalty. The Rules integrates the existing self-regulatory disciplinary action system, enriches the levels of self-regulatory disciplinary measures, and regulates the operating procedures for self-regulatory actions. This guarantees the objectivity, equality and efficiency of self-regulatory actions, fully realizes the restriction of powers and sharing of responsibilities, and adapts to the trend of in-depth market development.

As a systematic guarantee and fundamental arrangement of NAFMII for self-regulatory management, the Rules define the working procedure and decision-making mechanism for self-regulatory disciplinary actions. The document will constitute the procedural code for the work of self-regulatory action together with the Working Procedure of the Self-regulatory Disciplinary Action Meeting, the Expert Management Procedure of the Self-regulatory Disciplinary Action Meeting and other supporting rules. Moreover, the document will provide basis for appraising noncompliant conducts and determining action decisions together with the revised Issuance Registration Rules, the Information Disclosure Rules, the Intermediate Service Rules and the Member Management Rules.