(The English version is used for reference only. Should the English version doesn’t match the meaning of the original text in Chinese, the Chinese version shall prevail.)

(Deliberated and adopted on August 29, 2017 at the third session of the Fifth Governing Council)

Chapter I General Provisions

Article 1 This Rules and Procedures for the Registration of Debt Financing Instruments of Non-Financial Enterprises for Private Placement (this “Rules”), formulated in accordance with the Administrative Measures for Debt Financing Instruments of Non-Financial Enterprises on the Inter-bank Bond Market (《银行间债券市场非金融企业债务融资工具管理办法》) (PBOC Order [2008] No.1) and other applicable rules including the Rules for the Registration and Issuance of Debt Financing Instruments of Non-Financial Enterprises in Inter-bank Market（《非金融企业债务融资工具注册发行规则》） of the National Association of Financial Market Institutional Investors (“NAFMII”), is designed to regulate the registration of debt financing instruments of non-financial enterprises(“Debt Financing Instruments”) for private placement and promote the development of a multi-tiered bond market.

Article 2 Enterprises may privately place Debt Financing Instruments to selected institutional investors of Debt Financing Instruments (“Specialized Institutional Investors”) or designated institutional investors of Debt Financing Instruments (“Designated Institutional Investors”).

Article 3 A Registration Office under NAFMII Secretariat Office (“Secretariat Office”) is responsible for receiving registration documents of privately placed Debt Financing Instruments and verifying the completeness of the registration documents and information to be disclosed therein. The Registration Office will not make any substantive judgment on the investment value and risk of privately placed Debt Financing Instruments.

Article 4 Relevant documents and information involved in any processes including the private placement of Debt Financing Instruments shall be disclosed to private placement investors through NAFMII's Integrated Business and Information Service Platform (“Integrated Service Platform”) to facilitate their oversight.

Chapter II Private Placement Investors

Article 5 For the purpose of this Rules, private placement investors include Specialized Institutional Investors and Designated Institutional Investors.

Article 6 For the purposes of this Rules, the term “Specialized Institutional Investor” refers to any institutional investor who, in addition to being experienced in investing in the interbank market and identifying the risks associated therewith, is also familiar with the risk characteristics and investment process with respect to privately placed Debt Financing Instruments, and is willing and capable of bearing the investment risks, and voluntarily accepts the self-regulation of NAFMII and fulfills its obligations as a member of NAFMII.

Specialized Institutional Investors shall be selected by NAFMII in accordance with the market-based principle and the procedures as determined by the Governing Council and shall be publicly disclosed on any websites recognized by NAFMII.

Article 7 For the purposes of this Rules, the term “Designated Institutional Investor” refers to any institutional investor who understands and is capable of identifying the risk characteristics and investment process with respect to an issue of Debt Financing Instruments privately placed by a specific Enterprise, is willing and capable of bearing the investment risks, and voluntarily accepts the self-regulation of NAFMII and fulfills obligations as a member of NAFMII.

Designated Institutional Investors shall be selected by an enterprise and its principal underwriter.

Article 8 Each investment product created or managed by a private placement investor who is appointed or authorized as an asset manager by its clients in accordance with laws and regulations, for the purpose of managing assets or making investments in accordance with the investment plan and method agreed upon with the clients, including, but not limited to, any securities investment fund, bank wealth management product, asset management scheme and trust plan, insurance product, housing provident fund, Social Security Fund, corporate annuity, pension fund, or other non-corporate qualified institutional investor (“Non-Corporate Private Placement Investor”) shall be regulated as if it is a private placement investor, have its relevant statutory or agreed rights exercised by its asset manager, accept the self-regulation of NAFMII, and fulfill its obligations as a NAFMII member.

Article 9 The asset manager of a Non-Corporate Private Placement Investor shall comply with the agreements with the principal and may not invest in any privately placed Debt Financing Instrument that is beyond the investment scope and the principal’s risk tolerance.

Article 10 The asset manager and custodian of a Non-Corporate Private Placement Investor shall, on an ongoing basis, enhance the development of internal control and other systems, optimize the setup of departments and posts, and improve the business competence of relevant personnel to prevent relevant institutions and individuals from damaging the lawful rights and interests of the principal by abusing their duties.

Article 11 An enterprise and its principal underwriter shall determine the scope of private placement investors before submitting the registration document.

To privately place any Debt Financing Instrument to Specialized Institutional Investors and Designated Institutional Investors (if any), the enterprise shall prepare a private placement offering memorandum and other relevant documents in accordance with the rules of NAFMII on the content and format of private placement disclosures.

To privately place any Debt Financing Instrument to Designated Institutional Investors only, the enterprise shall enter into a private placement agreement with the Designated Institutional Investors intending to invest in such Debt Financing Instrument and agree upon the rights and obligations of the parties thereto and matters related to the registration and issuance of the Debt Financing Instrument in accordance with the rules of NAFMII on the content and format of private placement disclosures. Such private placement agreement shall be binding upon the parties thereto.

Article 12 An enterprise and its principal underwriter may select additional Designated Institutional Investors as the private placement investors of its Debt Financing Instrument.

Chapter III Registration and Filing

Article 13 An enterprise may privately place a Debt Financing Instrument at its own discretion during the validity period of the registration thereof. If the enterprise fails to issue such Debt Financing Instrument within 12 months upon the registration acceptance, the first tranche of such Debt Financing Instrument to be issued thereafter shall be filed with NAFMII in advance.

Article 14 Within one working day upon its receipt of an enterprise’s registration document for private placement, the Registration Office shall check whether the document contains all the key elements. If yes, it shall accept the registration document and review the registration document and the information to be disclosed therein. If not, it can advise the enterprise or relevant intermediaries to supplement or amend the registration document.

Article 15 The Registration Office enforces a conflict of interest avoidance system for the review. If, at the time of reviewing registration documents and the information to be disclosed, a reviewer has a potential or existing conflict of interest which may affect the fairness of performance of his or her duties, he or she shall be recused from the review.

Article 16 During the review, the Registration Office may advise an enterprise or relevant intermediaries to explain, supplement, or amend the registration document; access the due diligence report or other relevant materials of the intermediaries; and, if the information to be disclosed in the registration document is incomplete because an intermediary has not perform its duties with diligence, order the intermediary to re-perform its duties.

Article 17 The review of information disclosure in a registration document for private placement uses a two-person system and chiefly comprises the following steps:

1. The Registration Office appoints two reviewers to separately and concurrently conduct the review on the registration document in accordance with applicable self-regulatory rules and guidelines to assess the completeness of the registration document and the information to be disclosed therein. The Registration Office shall designate one of the two reviewers as the lead reviewer, who shall be responsible for follow-up communications and feedbacks.

2. If the reviewers find the information to be disclosed in the registration document incomplete, the lead reviewer shall aggregate the opinions and advise the enterprise or relevant intermediaries through a letter (the “Suggestion Letter”) to furnish additional information. The Suggestion Letter for an enterprise which registers Debt Financing Instrument for the first time shall be sent out within ten working days of accepting the registration document, and for an enterprise which has previously registered any Debt Financing Instrument, within five working days.

3. The enterprise or relevant intermediaries shall submit the supplemented or amended registration document (the “Supplemented Document”) to the Registration Office within ten working days upon receiving the Suggestion Letter.

A written explanation shall be submitted for failing to meet the above time limit. Where the written explanation is not provided or the delays in providing responses during the phase of registration review have reached more than 60 working days in total, NAFMII will suggest the enterprise or relevant intermediaries to withdraw the registration document.

4. If, after the Registration Office has received the Supplemented Document from the enterprise or relevant intermediaries, the reviewers find the Supplemented Document and the information to be disclosed therein still incomplete, the lead reviewer shall aggregate the opinions and issue a Suggestion Letter within five working days upon receipt of the Supplemented Document; if the reviewers find the disclosure in compliance with applicable rules and guidelines, NAFMII will accept the registration in accordance with relevant procedures and issue a Notice of Registration Acceptance to the enterprise.

Article 18 The Registration Office may seek opinions from Registration Specialists on a registration document ant the information to be disclosed therein. The Registration Specialists shall give a written feedback to the lead reviewer within five working days upon receipt of the registration document and relevant materials on which opinions are intended to be sought from him or her.

The lead reviewer shall disclose the Registration Specialist opinions to the enterprise and relevant intermediaries within one working day upon receiving such opinions. The enterprise and relevant intermediaries shall submit a Supplemented Document within five days upon receipt of the Registration Specialist opinions and provide a reminder of the opinions and supplementary disclosure in a prominent position of the private placement memorandum or private placement agreement. NAFMII will remind private placement investors of the Registration Specialist opinions and supplementary disclosure through the Integrated Service Platform.

Article 19 If any of the following event occurs to an enterprise within the period from the start date of the most recent full fiscal year to the date of registration acceptance, the Registration Office shall submit the registration document as amended by the enterprise to the Registration Meeting for review and the Registration Meeting shall decide whether to accept the registration of the enterprise’s Debt Financing Instrument for private placement.

1. The enterprise has defaulted on a major debt obligation by failing to repay it on time;

2. The enterprise has suffered a material loss or deficit of more than 10% of its net assets;

3. The enterprise’s actual controller is a natural person who is under investigation or subject to compulsory measures by a competent authority for suspected violation of laws or disciplines;

4. The enterprise has made a decision on capital reduction, merger, division, dissolution, or applying for bankruptcy, or is in bankruptcy proceedings or ordered to shut down in accordance with the law;

5. The enterprise’s auditor has issued a qualified opinion, adverse opinion, or disclaimer of opinion on the enterprise’s recently disclosed audited financial statements;

6. The enterprise has lost the de facto control over its key subsidiary (i.e. a company more than 35% of whose assets, net assets, operating revenue, or net profit are attributed to the enterprise) due to rights issue, secondary market acquisition, equity transfer with or without consideration or other reasons;

7. The enterprise is downgraded in its corporate credit rating (if any);

8. The enterprise is having difficulty in maintaining its operation or production (e.g., its business operation or production had previously been suspended), or is having a dire liquidity situation, or is under significant pressure in repaying its outstanding debts; or

9. Other circumstances that may have a major impact on the investment value judgment and investment decision-making of private placement investors.

Article 20 If, upon the occurrence to an enterprise of a material event or an event which is not material, but may have a significant impact on the investment value judgment and investment decision making of private placement investors between the date of registration acceptance and the establishment of a creditor-debtor relationship under its privately placed Debt Financing Instrument, a supplementary disclosure of relevant information is required, the enterprise shall timely inform the Registration Office thereof in writing and disclose relevant documents to the private placement investors through the Integrated Service Platform. The enterprise shall suspend the issuance of its privately placed Debt Financing Instrument if the issuance document has already been disclosed to the private placement investors, but the creditor-debtor relationship under the privately placed Debt Financing Instrument has not yet been established.

In case of the occurrence of any event set forth in Article 19 hereof, the Registration Office shall submit the registration document as amended by the enterprise to the Registration Meeting for review by reference to the procedures for re-submission of registration document to the Registration Meeting for public issuance.

Article 21 Submission of registration documents for private placement to the Registration Meeting for review and their subsequent processing shall be made by reference to the procedures for public issuance.

Article 22 The principal underwriter of an enterprise shall monitor the business operation and financial situation of the enterprise during registration review and throughout the validity period of the registration, and shall press the enterprise to make supplementary disclosures on material events and other major events.

Article 23 The Registration Office shall timely organize the Registration Specialist opinions and the files related to each Registration Meeting, and preserve them till three years after the termination of the creditor-debtor relationship under the last tranche of the Debt Financing Instrument within the registered quota reviewed by relevant Registration Specialists or at the Registration Meeting.

Article 24 If an enterprise is required to file with NAFMII before issuing any Debt Financing Instrument within the validity period of the registration thereof, it shall prepare the filings in accordance with NAFMII’s requirements on the content and format of disclosures for such filing and submit them to the Registration Office through the principal underwriter. The Registration Office shall accept the filings by reference to the procedures set forth in Article 14.

Article 25 Filing for private placement chiefly comprises the following steps:

1. The Registration Office appoints one reviewer to examine the filings in accordance with applicable self-regulatory rules and guidelines for the completeness of such filings and the information to be disclosed therein.

2. If the reviewer finds the disclosure incomplete, he or she shall issue a Suggestion Letter to the enterprise or relevant intermediaries within two working days from acceptance of the fillings. If, after receiving the corresponding Supplemented Document, the reviewer finds supplementary disclosures necessary, he or she shall issue another Suggestion Letter within two working days upon the receipt of the Supplemented Document.

3. The enterprise or relevant intermediaries shall submit a Supplemented Document to the Registration Office within five working days after receiving a Suggestion Letter.

A written explanation shall be submitted for failing to meet the above time limit. Where the written explanation is not submitted or the delays in providing responses during the phase of filing review have reached more than 30 working days in total, NAFMII will suggest the enterprise or relevant intermediaries to withdraw the filings.

Chapter IV Duties of Intermediaries

Article 26 Principal underwriters, accounting firms, law firms and other relevant intermediaries and individuals who provide intermediary services for the private placement of Debt Financing Instruments shall do so, as required and agreed, with diligence and care and in strict accordance with laws, regulations, rules, and regulatory requirements of relevant administrative authorities, applicable code of practice, and the Rules for Intermediary Services for Debt Financing Instruments of Non-Financial Enterprises in the Interbank Bond Market and other applicable self-regulatory rules of NAFMII.

Article 27 Relevant intermediaries shall establish internal control and risk management systems in relation to intermediary services for Debt Financing Instruments, improve their internal organizational structure, and be staffed with practitioners qualified to engage in relevant business to ensure the truthfulness, accuracy, and completeness of documents issued by them. If documents prepared or issued by the intermediaries contain any false records, misleading statements, or material omissions, they shall be legally liable for any part thereof for which they are responsible.

Article 28 Relevant intermediaries who provide intermediary services for the private placement of Debt Financing Instruments shall have sufficient time and necessary work procedures to ensure that the due diligence is comprehensive and thorough and that the necessary examination and verification of the truthfulness, accuracy and completeness of documents and materials based on which the due diligence is performed are conducted.

Article 29 During the process of the private placement of Debt Financing Instruments, relevant intermediaries may not induce or mislead private placement investors through advertisement, public persuasion, disguised forms of public issuance, exaggerated publicity or such improper means as false advertisement

Article 30 Lead underwriters shall establish sound internal control and enterprise quality evaluation and selection systems in compliance with applicable self-regulatory rules of NAFMII to ensure a good understanding by enterprises of applicable laws, regulations, rules, relevant self-regulatory rules of NAFMII and risk and liabilities to be borne and the proper provision of intermediary services at each phase of the registration and issuance process.

Article 31 Accounting firms shall have in place and effectively implement sound quality control and internal management systems, maintain a high level of practice standards and ethics, and strengthen the management of audit services provided by their accountants with respect to Debt Financing Instruments. An accounting firm and certified public accountants (CPA) assigned by it shall issue an auditor’s report based on sufficient due diligence and in accordance with laws, regulations, rules, the Accounting Standards for Business Enterprises and applicable policies, relevant self-regulatory rules of NAFMII and business standards, code of ethics and duty of diligence and care recognized by the CPA profession.

An enterprise shall engage an accounting firm with a long history of practice and extensive practice experience and highly recognized in the market to issue an auditor’s report.

Article 32 Law firms shall establish a sound risk control system to enhance the management of legal services provided by their lawyers with respect to Debt Financing Instruments. A law firm and lawyers assigned by it shall issue a legal opinion based on sufficient due diligence and in accordance with laws, regulations, rules, relevant self-regulatory rules of NAFMII and business standards, code of ethics and duty of diligence and care recognized by the lawyer profession.

Article 33 Principal underwriters, accounting firms, law firms and other relevant intermediaries and individuals who provide intermediary services for the private placement of Debt Financing Instruments shall not commit such acts as violating fair competition, engaging in illegal tunneling or disrupting the orderly operation of the market during their business activities.

Chapter V Issuance and Miscellaneous

Article 34 Any Debt Financing Instrument privately issued by an enterprise shall be underwritten by a qualified underwriter. The enterprise may select its principal underwriter at its own discretion. If necessary, an underwriting syndicate shall be organized by the principal underwriter.

Article 35 To privately place a Debt Financing Instrument to Specialized Institutional Investors and Designated Institutional Investors (if any), an enterprise shall disclose the current issuance document to them via the Integrated Service Platform at least two working day prior to the issuance. To privately place a Debt Financing Instrument to Designated Institutional Investors only, the enterprise shall disclose the current issuance document to them via the Integrated Service Platform at least one working day prior to the issuance.

Article 36 Upon completion of the private placement of a Debt Financing Instrument, an enterprise shall publish the issuance results of the Debt Financing Instrument to private placement investors via the Integrated Service Platform on the working day immediately following the completion of the creditor-debtor relationship registration.

Article 37 A privately placed Debt Financing Instrument shall be transferrable among such private placement investors as specified in the private placement offering memorandum or private placement agreement.

Article 38 Privately placed Debt Financing Instruments may be used for repurchase transactions in accordance with applicable rules of the interbank bond market.

Chapter VI Ancillary Provisions

Article 39 Staff of the Secretariat Office involved in offering registration shall strictly comply with work disciplines including the Offering Registration Staff Code of Conduct.

Article 40 The Audit Department of Secretariat Office shall supervise the entire process of registration. Relevant rules will be developed separately.

Article 41 Disciplinary sanctions will be imposed against any violator of this Rules and relevant self-regulatory rules of NAFMII in accordance with NAFMII’s Rules for Disciplinary Sanctions for the Market of Debt Financing Instruments Issued by Non-financial Enterprises.

Article 42 In case of any conflict between guidelines on relevant products such as asset-backed notes and project revenue notes and the relevant provisions hereof, such guidelines shall prevail.

Article 43 NAFMII Secretariat Office shall be responsible for interpreting this Rules.

Article 44 This Rules shall come into effect as of November 1, 2017.