In a bid to broaden the investment channels for fund management companies to provide asset management services to specific clients, to protect the legitimate rights and interests of investors, and to promote the healthy development of the bond market, the People s Bank of China makes announcement as follows on issues concerning the opening of bond accounts by fund management companies on the national inter-bank bond market for the purpose of providing asset management services for specific clients in accordance with the Administrative Measures of Bond Transactions on China s Inter-bank Bond Market (PBC Decree No.
2 [2000]),:
1.When providing asset management services for a specific client on the inter-bank bond market, the fund management company shall open a dedicated account for each specific asset management portfolio. The name of the account shall be "name of the fund management company-name of the custodian-name of the portfolio".
2.The portfolio can be traded and settled directly or through a settlement agent.
3.When the portfolio is traded and settled directly, its custodian shall file an application to China Government Securities Depository Trust and Clearing Co. Ltd (referred to as China Clearing Company hereinafter) for opening a bond account in the name of the specific asset management portfolio, and the asset manager can file an application to National Inter-bank Funding Centre (referred to as Funding Centre hereinafter) for conducting online bond transactions in the name of the specific asset management portfolio. The following materials shall be provided for application:
(1)Licenses (photocopy) of the asset manager and the custodian for conducting the relevant financial businesses, and the duplicate of the business licenses of their respective legal person entities (photocopy);
(2)Qualification certificate (photocopy) of the asset manager in engaging in specific asset management business;
(3)Tripartite asset management agreement (photocopy) among the client, the asset manager and the asset custodian;
(4)The no comment letter (photocopy) on asset management contract registration provided by the China Securities Regulatory Commission;
(5)Other materials required by the China Clearing Company and the Funding Centre.
The asset manager and asset custodian shall be liable for the authenticity, accuracy and completeness of the materials they provided respectively and warrant that such materials contain no false representation, misleading statement or material omission.
4.When bond transactions and settlement under the account of a specific asset management portfolio are conducted through a settlement agent, the asset manager and the settlement agent shall sign the agreement on agent settlement for bond, and the regulations governing legal persons of financial institutions shall apply mutatis mutandis to the relevant transactions.
The settlement agent shall file an application to the China Clearing Company for opening an account for bond transactions of the specific asset management portfolio. The settlement agent shall provide the materials as required in Article 3 of the Announcement and the agreement (photocopy) on agent settlement for bond signed by the asset manager and the settlement agent.
5.After reviewing the application materials, the China Clearing Company and the Funding Centre shall open the accounts for bond transactions and online transactions respectively according to legal procedures.
6.When bond transactions and settlement under the account of a specific asset management portfolio are conducted directly, the asset custodian shall report to the PBC Shanghai Head Office for record according to the relevant regulations in Shanghai Head Office Announcement No. 3 [2008]. The following materials shall be provided for record:
(1)The materials as required in (1) to (4) of Article 3 of the Announcement;
(2)The notice of conducting online transactions provided by the Funding Centre (if any);
(3)The notice of opening accounts provide by China Clearing Company;
(4)Other materials required by the PBC.
7.When bond transactions and settlement under the account of a specific asset management portfolio are conducted through a settlement agent, the settlement agent shall report relevant information for record according to Article 3 of the PBC Shanghai Head Office Announcement No. 3 [2008]. Apart from the materials required in Article 6 of the Announcement, the settlement agent shall provide the agreement (photocopy) on agent settlement for bond signed by the asset manager and settlement agent.
8.In case of the alteration of the manager, custodian or settlement agent of a specific asset management portfolio, parties concerned shall contact the Funding Centre and the China Clearing Company in a timely manner, go through alteration procedures and report relevant information for record to the PBC Shanghai Head Office as per requirements in Article 3 of the of the PBC Shanghai Head Office Announcement No. 3 [2008].
Provided the contract of the specific asset management portfolio terminates, the manager, custodian or settlement agent of specific asset management portfolio shall contact the Funding Centre and the China Clearing Company in a timely manner, go through cancellation procedures and report relevant information for record to the PBC Shanghai Head Office as per requirements in Article 3 of the of the PBC Shanghai Head Office Announcement No. 3 [2008].
9.No bond transactions shall be conducted between the accounts managed by the same fund management company.
10.Fund management companies shall manage dedicated accounts for bond transactions of specific asset management separately, and shall not misappropriate the bonds under the dedicated accounts.
11.The manager, the custodian or the settlement agent shall observe relevant rules and regulations concerning China s inter-bank bond market when conducting transactions and settlement of specific asset management.
12.The Funding Center and the China Clearing Company shall make relevant business rules and procedures in accordance with the Announcement, which shall be enforced after being reported to the PBC for record, and facilitate the opening of dedicated accounts for bond transactions of specific asset management.
The Funding Center and the China Clearing Company shall effectively conduct daily monitoring of transactions and settlements concluded under dedicated accounts for bond transactions of specific asset management, promptly handle irregularities and report the relevant information to the PBC.
13.The Announcement shall enter into force upon its release.
The People s Bank of China
March 18, 2009
