(Promulgated by the People's Bank of China on September 28, 1987)
(Promulgated by the People's Bank of China on September 28, 1987)
Whole Doc.
Article 1
These Provisions are hereby formulated with a view to utilizing
foreign investment, supporting the development of national economy,
assuring the raise of funds on the international financial market based on
a plan, making a rational arrangement for use of borrowed funds and
strengthening the control of issuing bonds abroad.
Article 2
Legal entities which are registered in China (hereinafter referred to
as "institute within China" shall abide by these Provisions in respect of
issuing bonds abroad.
Article 3
The head office of the People's Bank of China is the examination and
approval authority in charge of issuing bonds abroad. The State
Administration of Exchange Control and its branch offices (hereinafter
referred to as "exchange control authorities") are the organs regulating
the issue of bonds abroad by resident institutions, and shall take the
responsibility of examining, adjusting and supervising the issue of bonds
and controlling the use and repayment of the raised funds.
Article 4
In need of issuing bonds abroad, resident institutions shall make a
written application to the local exchange control authority and submit
relevant documents and materials in light of Articles 6, 7 and 8 of these
Provisions. with suggestions made by the local exchange control authority
upon examination, the application shall be subject to the check-up by the
State control Administration of exchange and approval by the head office
of the People's Bank of China.
Article 5
In applying for issuing bonds abroad, resident institutions shall
submit the following documents and materials:
1) the report on business, finance and the status of receipt and
disbursement of foreign exchange of bonds issuing institution within the
recent consecutive three years;
2) matters as the market, types, amount, forms of currency, length,
interest rate and various expenditure of bonds issued;
3) the status of main secretaries in charge and main entrusted banks;
4) controlling methods for the funds raised through issuing bonds and
for exchange rate and rate risk;
5) arrangements of bond issuing institutions for paying back
principal plus interest of bonds;
Article 6
In case that funds raised through issuing bonds are to be used for
fixed assets investment, the following materials shall also be provided:
1) feasibility report on investment project;
2) documentation which shows that the plan about fixed assets
investment has been brought into line of the state's or local plan;
3) documentation of necessary Renminbi (RMB) Funds and necessary
goods and materials;
4) the plan for utilizing the funds raised through issuing bonds.
Article 7
In the event that funds raised through issuing bonds are to be relent
to domestic enterprises, the applicants shall present the following
materials in the meanwhile:
1) reports on conditions for the business, finance and receipts and
expenditure of foreign exchange of the domestic enterprises;
2) reports on the purpose of the loan used by the domestic enterprise
and its necessary Renminbi funds and necessary goods and materials;
3) the document testifying that the borrowed funds which are used for
the investment in fixed assets have been brought into line of the state's
or local plan;
4) arrangement for the use and repayment of the funds borrowed by the
domestic enterprise;
5) feasibility report of such domestic enterprise on the project for
investment in fixed assets;
6) a loan agreement signed between the bond issuer and the borrower.
Article 8
If the issuance of bonds is entrusted by a domestic institution, the
following documents and materials shall be provided upon application by
the entrusted institution and the local exchange control authority
respectively:
1) bonds agreement signed between the entrusting and entrusted
institutions, being submitted by the entrusted party;
2) relevant documents and materials submitted by the entrusted
institution according to these Provisions;
3) examination reports on issuing bonds in entrusting and entrusted
ways, which shall be presented respectively by the local exchange control
authorities where the entrusting and entrusted institutions are located,
in light of relevant provisions of the State Administration of Exchange
Control.
Article 9
If in need of application for grading, the institution which issues
bonds abroad for the first time, shall present the exchange control
authority a written application with materials concerning the name of the
institution for grading, materials useful for grading, grading procedures,
etc. the issuing institution shall not apply for grading abroad until the
approval is given, The issuing institution shall make a report on the
grading results to the exchange control authority within 3 days after the
grading. The head office of the People's Bank of China shall, in light of
the results of grading, decide to approve its issue of bonds or not. In
need of another grading, the institution shall give a report on the
results and reasons of the grading to the exchange control authority if
the results of grading differ from that of the last time.
Article 10
If the bonds are issued for the need of its own operation of the
issuing institution, such funds raised shall be used for the purpose as
approved, and the issuing institution shall take the full responsibility
of paying off the principal and interest of bonds.
Article 11
In case the issue of bonds is entrusted by a local government, the
raised funds shall be used for the projects arranged by the local
government, and the repayment of principal plus interest is brought into
line with the local plan for the expenditure of foreign exchange. The
local government shall be responsible for the repayment.
Article 12
If the issue of bonds is entrusted by the State, the raised funds
shall be used according to the State arrangements and the repayment of the
principal and interests is brought into line with the State plan for the
expenses of foreign exchange, The State shall undertake the responsibility
of the repayment.
Article 13
The bond issuing institution shall report the conditions of the
issuing to the exchange control authority, the same day on which bonds are
issued and file the documents and materials concerning the issue
(including the directions for the issuing of bonds, etc.) with the
exchange control authority within 20 days after the issue.
Article 14
If the bonds are to be marketed in a financial market other than the
place in which the bonds are issued after the issuance, the issuing
institution shall in advance report it to the exchange control authority
for the record, and shall provide a report to the exchange control
authority at any time when there are any changes in price after the bonds
went on the market.
Article 15
After the bonds are issued, the issuing institution shall, in the
light of requirement of the exchange control authority, submit quarterly
the reports concerning the use of the funds, operation of the investment
and loan project and the repayment of the funds. If the purpose of the
using the funds is necessary to be changed, the issuing institution shall
obtain the consent from the exchange control authority in advance.
Article 16
The exchange control authority has the right to examine the use and
repayment of the funds, and the issuing institution shall cooperate with
the exchange control authority, presenting relevant documents and
materials.
Article 17
In case of violation of these Provisions, the exchange control
authority may make the punishment of disciplinary warning, fining and even
canceling the qualification for issuing bonds according to the seriousness
of the case.
Article 18
The authority to interpret these Provisions resides in the State
Administration of Exchange Control.
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