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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II CREDIT-ASSET SECURITIZATION PROMOTER INSTITUTIONS AND SPECIAL PURPOSE TRUST CHAPTER III TRUSTEE INSTITUTION OF SPECIAL PURPOSE TRUST CHAPTER IV LOAN SERVICE INSTITUTIONS CHAPTER V FUND PRESERVATION INSTITUTION CHAPTER VI ISSUANCE AND TRANSACTIONS OF ASSET-BACKED SECURITIES CHAPTER VII INFORMATION DISCLOSURE CHAPTER VIII RIGHTS OF THE HOLDERS OF ASSET-BACKED SECURITIES AND EXERCISE OF SUCH RIGHTS CHAPTER IX SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. For the purposes of regulating the pilot work of credit asset securitization, protecting the legitimate rights and interests of the parties concerned, enhancing the fluidity of the credit assets and enriching the varieties of securities, these Measures are formulated in accordance with the Law of the People's Republic of China on the People's Bank of China, the Banking Supervision Law of the People's Republic of China, the Trust Law of the People's Republic of China and other relevant laws and regulations. Article 2. These Measures shall apply to the structural financing activities carried out within the territory of China by which the banking financial institutions, as the promoter, entrusts a trustee institution with credit assets, and the trustee institution offers beneficial securities to investment institutions in the form of asset-backed securities and pay the yields of the asset-backed securities with the cash generated from the asset concerned. A trustee institution shall, in accordance with the present Measures and the trust contract stipulations, entrust a loan service institution, fund preservation institution, securities register and custodian institution or other institutions providing services for securitization transactions to exercise their respective duties. A trustee institution shall undertake the obligation of paying the investment institutions yields of the asset-backed securities within the limit of the trust assets. Article 3. The asset-backed securities shall be issued by the special purpose trustee institution, representing the shares of beneficial rights under the special purpose trust. The asset-backed securities shall be issued and traded in the national inter-bank bond market. Article 4. The rights and obligations of the promoter institutions of credit-asset securitization, trustee institutions, loan service institutions, fund preservation institutions, securities register and custodian institutions, other institutions providing services for securitization transactions, as well as the institutions investing in asset-backed securities shall comply with the relevant laws, regulations, the present Measures as well as the stipulations in the trust contracts and other contracts (hereinafter referred to as the relevant legal documents). A trustee institution shall, in accordance with the relevant laws and regulations, these Measures as well as the stipulations in the relevant legal documents, perform the trustee's duties. A promoter institution, loan service institution, fund preservation institution, securities register or custodian institution or any other institution providing services for securitization transactions shall perform their respective duties in accordance with the laws, regulations, the present Measures as well as the stipulations in the relevant legal documents. An asset-backed securities investment institution (also called a holder of asset-backed securities) shall be entitled to enjoy the benefits of the trust property and bear the risks in accordance with the relevant legal documents and shall, through the general meeting of asset-backed securities, make resolutions on the important matters that may affect its interests. Article 5. The principle of free will, impartiality and good faith shall be observed in the credit-asset securitization activities. No state interest or public interest may be impaired. Article 6. The credit assets obtained by a trustee institution due to commitment of trust are trust property, which are independent of the fixed property of the promoter institution, trustee institution, loan service institution, fund preservation institution, securities register and custodian institution as well as other institutions providing services for securitization transactions. The property and yields obtained by a trustee institution, loan service institution, fund preservation institution and other institutions providing services for securitization transactions from managing or operating the special purpose trust fund or due to other circumstances shall fall under the trust property. Where a promoter institution, trustee institution, loan service institution, fund preservation institution, securities register and custodian institution or any other institution providing securitization services is liquidated due to dissolution, revocation or bankruptcy in accordance with the law, the trust property doesn't fall within the scope of liquidation property. Article 7. The creditor's rights generated from a trustee institution's management, operation and disposition of trust property shall not offset against the debts incurred from the fixed property of the promoter institution, trustee institution, loan service institution, fund preservation institution, securities register and custodian institution as well as other institutions providing services for securitization transactions. The creditor's rights and debts generated from the management, operation and disposition of different trust property shall not offset against each other. Article 8. All trustee institutions, loan service institutions, fund preservation institutions, securities register and custodian institutions and other institutions providing services for securitization transactions shall be dutiful and perform their obligations of being honest, faithful, prudent and diligent. Article 9. The Banking Regulatory Commission (hereinafter referred to as the CBRC) shall supervise the credit asset securitization activities of the relevant institutions in pursuance of the law. The relevant supervisory provisions shall be separately formulated by the CBRC. Article 10. The CBRC shall supervise the offer and transaction of asset-backed securities on the national inter-bank bond market. CHAPTER II CREDIT-ASSET SECURITIZATION PROMOTER INSTITUTIONS AND SPECIAL PURPOSE TRUST Article 11. The term "credit-asset securitization promoter institutions" refers to the financial institutions that transfer credit assets by establishing special purpose trusts. Article 12. A promoter institution shall inform the relevant obligees of the matters relating to the plan to establish a special purpose trust to transfer the credit assets by publishing them on a nationwide medium. Article 13. The promoter institution and the trustee institution shall enter into a trust contract, which shall state: (1) the purposes of trust; (2) the names and addresses of the promoter institution and trustee institution; (3) the scope of the beneficiaries and determination methods; (4) the scope, categories, criterions and status of the trust property; (5) the redemption or replacement conditions as prescribed in Article 14 of the present Measures; (6) the forms and methods for beneficiaries to obtain trust interests; (7) the time limit for the trust; (8) the administrative measures for the trust property; (9) the rights and obligations of the promoter institution or trustee institution; (10) the duties of institution to handle the trust matters as entrusted by the trustee institution; (11) the remuneration of the trustee institution; (12) the organizational form and power of the general meeting of the holders of asset-backed securities; (13) the way of selection of new trustee institution; and (14) reasons for termination of trust. Article 14. Within the valid period of a trust contract, if the trustee institution finds that trust-property credit asset doesn't conform to the scope, category, criterions and status as stipulated in the trust contract as of the day when it is counted as put in stock, it shall demand the promoter institution to redeem it or replace it by a new one. CHAPTER III TRUSTEE INSTITUTION OF SPECIAL PURPOSE TRUST Article 15. The trustee institution of a special purpose trust is an institution responsible for managing the special purpose trust and issuing asset-backed securities due to its commitment of trust. Article 16. A trust institution shall be a lawfully established trust investment company or any other institution approved by the CBRC. Article 17. A trustee institution shall perform the following duties: (1) Issuing asset-backed securities; (2) Managing the trust property; (3) Continuously disclosing the information about the trust property and asset-backed securities; (4) Distributing the trust interests under the stipulations in the trust contract; and (5) Other duties as stipulated in the trust contract. Article 18. A trustee institution shall entrust a commercial bank or any other professional institution to act as the fund preservation institution for the trust property and shall, under the stipulations in the trust contract, entrust an institution with other qualifications to perform the duties of loan services, transaction management and other duties. Article 19. A trustee institution shall be terminated under any of the following circumstances: (1) Being disqualified from a trustee institution; (2) Dismissed by the general meeting of the holders of asset-backed securities; (3) Being dissolved, revoked or declared bankrupt in accordance with the law; (4) Having quit from acting as a trustee institution on its own initiative; or (5) Other circumstances as provided for in any law or regulation or as stipulated in the trust contract. Article 20. If the trustee institution is disqualified from being a trustee institution, is dissolved or declared bankrupt pursuant to law, the CBRC shall designate a temporary trustee institution before the new trustee institution appears. The trustee institution shall, after the termination of its duties, properly preserve the relevant materials and timely go through the hand-over formalities. The trustee institution or temporary trustee institution shall take over the aforesaid materials in a timely manner. CHAPTER IV LOAN SERVICE INSTITUTIONS Article 21. A loan service institution is an institution responsible for the management of the loan as entrusted by the trustee institution. The loan service institution may be a credit-asset securitization promoter institution. Article 22. The trustee institution and loan service institution shall sign a service contract, which shall state: (1) the names and addresses of the trustee institution and loan service institution; (2) the duties of the loan service institution; (3) the methods and standards for the management of loans; (4) rights and obligations of the trustee institution and loan service institution; (5) the remuneration of the loan service institution; (6) the liabilities for breach of contract; and (7) other matters. Article 23. A loan service institution shall manage the trust-property credit assets as stipulated in the service contract. It shall perform the following duties: (1) collecting the principal and interests of the loan; (2) managing the loan; (3) preserving the legal documents about the trust property and making them independent of those about its own property; (4) regularly providing the trustee institution with service reports, which shall state the information about the trust-property credit assets; and (5) other duties as stipulated in the service contract. Article 24. A loan service institution shall set up a special business department, which shall establish separate accounts for the trust-property credit assets and manage the trust property separately. Article 25. A loan service institution shall, under the contractual requirements, put the money collected back from the trust-property credit assets into the fund preservation institution, and shall inform the trustee institution of the relevant information. Article 26. If the trustee institution finds that the loan service institution is unable to perform its duties in accordance with the form and criterions as stipulated in the service contract, it may change it upon decision of the general meeting of the holders of asset-backed securities. If the trustee institution changes the loan service institution, it shall timely inform the borrower of the relevant information. CHAPTER V FUND PRESERVATION INSTITUTION Article 27. A fund preservation institution is an institution responsible for preserving the fund in the trust property account as entrusted by the trustee institution. No credit-asset securitization promoter institution or loan service institution may act as the fund preservation institution for an identical transaction. Article 28. The trustee institution shall conclude a fund preservation contract with the loan preservation institution. The contract shall state the following: (1) the name and address of the trustee institution and fund preservation institution; (2) the duties of the fund preservation institution; (3) the fund management methods and criterions; (4) the rights and obligations of the trustee institution and fund preservation institution; (5) the remuneration of the fund preservation institution; (6) the liabilities for breach of contract; and (7) other matters. Article 29. The fund preservation institution shall manage the fund according to the fund preservation contract. It shall perform the following duties: (1) safely preserving the fund of trust property; (2) establishing an account for the trust-property asset fund in the name of the special purpose trust of credit-asset securitization; (3) paying investment yields to the holders of asset-backed securities in a way as stipulated in the fund preservation contract; (4) managing the fund in the special purpose trust account according to the form as stipulated in the fund preservation contract as well as the trustee institution's instructions; and (5) regularly submitting fund preservation reports to the trustee institution so as to provide it with the information about the fund management and payments of yields of asset-backed securities; and (6) other duties as stipulated in the fund preservation contract. Under the stipulations of the trust contract, the trustee institution may entrust other service institutions to perform the duties as mentioned in Items (3) through (5) of this Article. Article 30. During an interval before the fund preservation institution pays yields of trust property to the investment institution, it can, forming a way as stipulated in the contract as well as the instructions of the trustee institution, only invest the yields of trust property to government bonds of high negotiability and liquidity, policy financial debts and other financial products as approved by the People's Bank of China. Article 31. If the trustee institution finds that the fund preservation institution is unable to preserve the fund in the way and according to the criterions as stipulated in the contract, it may change the fund preservation institution upon decision of the general meeting of the holders of asset-backed securities. CHAPTER VI ISSUANCE AND TRANSACTIONS OF ASSET-BACKED SECURITIES Article 32. When a trustee institution intends to issue asset-backed securities in the national inter-bank bond market, it shall submit the following documents to the People's Bank of China: (1) An application; (2) The articles of association of the promoter institution, or the written document of consent of the power institution as provided for in the documents which are by nature articles of association; (3) The drafts of trust contract, loan service contract, fund preservation contract and other relevant legal documents; (4) The draft of the prospectus (refer to the Annex for the format requirements); (5) The underwriting contract; (6) The relevant approval documents issued by the CBRC; (7) The legal advice of a practicing lawyer; (8) The accounting advice of a Certified Public Accountant; (9) The draft of the credit rating report issued by the credit rating institution as well as the relevant introduction of the follow-up tracking rating arrangement; and (10) Other documents as required by the People's Bank of China. Article 33. The People's Bank of China shall, within 5 working days of receiving a complete set of documents about the issuing of asset-backed securities, decide whether or not to accept the application. If the People's Bank of China decides to reject the application, it shall notify the applicant of the reasons in writing. If it decides to accept it, it shall make a written decision of approval or disapproval within 20 working days from the day when it accepts the application. Article 34. The asset-backed securities may elevate its credit rating through an internal or external credit promotion method. Article 35. A credit rating institution with rating qualifications shall be hired to conduct follow-up credit rating for the asset-backed securities issued and transacted in the national inter-bank bond market. The credit rating institution shall ensure the objectiveness and impartiality of its credit rating. Article 36. When issuing asset-backed securities, the issuer shall form a underwriting group. The underwriters may, during the period of issuing such securities, distribute the asset-backed securities underwritten by it to other investors. Article 37. The name of the asset-backed securities shall be obviously different from the names of the promoter institution, trustee institution, loan service institution and fund preservation institution. Article 38. The asset-backed securities may be issued in the form of an one-off full amount or in the form of limited amount by stages. If the asset-backed securities are issued in the form of limited amount by stages, the trustee institution shall, not later than 5 working days prior to the issuing of asset-backed securities for each stage, submit the final prospectus, rating report as well as all the relevant final legal documents to the People's Bank of China for archival purposes, and shall disclose the pertinent information as required by the People's Bank of China. Article 39. The asset-backed securities may be underwritten by way of agreement or bidding. An underwriter shall be a financial institution and shall meet the following conditions: (1) It's registered capital shall not be less than RMB 200 million yuan; (2) Having relatively strong capabilities in distributing bonds; (3) Having qualified professionals engaging in the bond market business, and bond distribution channels; (4) Having no serious illicit act within recent two years; and (5) Other conditions as required by the People's Bank of China. Article 40. Within 10 working days after the issuance of asset-backed securities in the national inter-bank bond market, the trustee institution shall report the issuance to the People's Bank of China and the CBRC. Article 41. The asset-backed securities may be issued exclusively to a particular group of investors. The exclusively issued asset-backed securities may be exempt from credit rating. The exclusively issued asset-backed securities can only be transferred among the underwriters. Article 42. Within 2 months after the issuance of asset-backed securities in the national inter-bank bond market, the trustee institution shall, pursuant to the Rules on the Trading and Circulation of Stocks in the National Inter-bank Bond Market, apply for trading the asset-backed securities in the national inter-bank bond market. Article 43. The register, custody, trading and settlement of asset-backed securities in the national inter-bank bond market shall comply with the Administrative Measures for the Trading of Bonds in the National Inter-bank Bond Market and other relevant provisions. CHAPTER VII INFORMATION DISCLOSURE Article 44. The trustee institution shall, prior to the issuing of asset-backed securities and during the period of their existence, disclose the information about the trust property and asset-backed securities. The aforesaid information shall be disclosed by the media as designated by the People's Bank of China. The trustee institution and the relevant insiders shall not divulge any content of the information before it is disclosed. Article 45. The trustee institution shall ensure the information be disclosed genuinely, exactly, completely and timely, which shall not contain any false record, misleading statement or serious omission. The institution that issues securitization services as entrusted by the trustee institution shall, under the stipulations in the relevant legal documents, provide the trustee institution with the pertinent information reports and shall ensure the genuineness, exactness, completeness and timeliness of the information. Article 46. The trustee institution shall, not later than 5 working days prior to the issuing of asset-backed securities, issue the final prospectuses. Article 47. The trustee institution shall, in an eye-catching position of the prospectus, remind the investment institutions that the asset-backed securities only represents the corresponding shares of beneficiary rights of the special purpose trust rather than the debts of credit asset securitization promoter institution, trustee institution of special purpose trusts or any other institution, and the investment institutions' right to recourse shall be limited to the trust property only. Article 48. During the period of the existence of asset-backed securities, the trustee institution shall verify the loan service reports and fund preservation reports regularly submitted by the loans service institution and fund preservation institution, and shall regularly disclose the reports of the trustee institution, reporting the information about the trust property, information about payments of principal and interests of loans, information about the yields of securities as well as other information as required by the People's Bank of China and CBRC. Article 49. The trustee institution shall timely disclose all the information that has substantial influence on the value of asset-backed securities. Article 50. The annual report of the trustee institution shall be audited by a certified public accountant. The trustee institution shall disclose the audit report. Article 51. Prior to the information disclosure, the trustee institution shall submit the information disclosure documents to the National Inter-bank Funding Center and China Government Securities Depository Trust & Clearing Co. Ltd., respectively. The National Inter-bank Funding Center and China Government Securities Depository Trust & Clearing Co. Ltd. shall offer services for the information disclosure of asset-backed securities and shall timely report to the People's Bank of China the acts that violate the relevant information disclosure provisions. CHAPTER VIII RIGHTS OF THE HOLDERS OF ASSET-BACKED SECURITIES AND EXERCISE OF SUCH RIGHTS Article 52. A holder of asset-backed securities shall be entitled to enjoy the following rights under the stipulations in the relevant legal documents: (1) Sharing the trust benefits; (2) Participating in distributing the remainder of trust property after liquidation; (3) Assigning the asset-backed securities it holds; (4) Requesting to hold the general meeting of holders of asset-backed securities; (5) Exercising the voting power over the matters subject to the deliberation of the general meeting of the holders of asset-backed securities; (6) Consulting or copying the publicly disclosed information and materials relating to the trust property and asset-backed securities; and (7) Other rights as stipulated in the trust contract and prospectus. Article 53. The following matters shall be deliberated and decided through the general meeting of holders of asset-backed securities. If there are definite stipulations in the trust contract, such stipulations shall be followed: (1) Changing the trustee institution of special purpose trust; and (2) Other matters as stipulated in the trust contract. Article 54. The general meeting of holders of asset-backed securities shall be convened by the trustee institution. If the trustee institution fails to do so, the holders of asset-backed securities may, on their own initiatives, be entitled to convene a meeting according to the stipulations in the trust property contract and shall report to the People's Bank of China for archival purposes. Article 55. When convening a general meeting of holders of asset-backed securities, the convener shall, not later than 30 days prior to its convening, announce the time, place, form of meeting, matters to be deliberated, discussion procedures, way of voting, etc. The general meeting of holders of asset-backed securities shall not vote for any unannounced matter. Article 56. The general meeting of asset-backed securities may be convened on the spot or by other ways of communication. The holders of asset-backed securities have the voting right as stipulated in the trust contract. They may entrust agents to attend the general meeting of asset-backed securities and exercise the voting rights. Article 57. Any matter subject to the decision of the general meeting of the holders of asset-backed securities shall be reported to the People's Bank of China for archival purposes and shall be announced. CHAPTER IX SUPPLEMENTARY PROVISIONS Article 58. The provisions governing the accounting, taxation and modifications to the registration of mortgage of real estates relating to securitization of credit assets shall be separately formulated by the relevant departments of the State Council. Article 59. The investment management policies concerning the purchase and holding of asset-backed securities shall be formulated by the relevant regulatory institution separately. Article 60. The present Measures shall be implemented as of the date of promulgation. Article 61. The power to interpret the present Measures shall remain with the People's Bank of China and China Banking Regulatory Commission. Annex: Requirements for the Prospectus of Asset-backed Securities 1. The name and address of the issuing institution (trustee institution), promoter institution, loan service institution, fund preservation institution, securities register and custodian institution and other institutions providing services for asset securitization; 2. A brief introduction to the promoter institution as well as its financial status; 3. The securitization transaction experience of the promoter institution, trustee institution, loan service institution and fund preservation institution as well as their declarations about breach of contract; 4. The transaction structure and the main rights and obligations of each party concerned; 5. The organizational form and the power of the general meeting of holders of asset-backed securities; 6. The declarations about the relationship among all trading parties; 7. The main contents of the trust contract, loan service contract, fund preservation contract and other relevant legal documents; 8. The loan granting procedures, examination standards, guaranty form, management methods, and loan disposal procedures and methods for breach of contract; 9. The standards on the selection of credit assets for the establishment of special purpose trust, and the statistical information; 10. The checklist of taxes to be paid for the trust property cash flow, the sources of payments for various taxes and the priority order of payments; 11. The information about the different grades of asset-backed securities, the amount for the principal of each grade, credit rating, coupon rate, expected time limit and priority order for the repayment of principal and interests; 12. The internal and external forms for elevating the credit level of the asset-backed securities; 13. The outline of the report issued by the credit rating institution about the credit rating of the asset-backed securities, and an introduction to the relevant follow-up tracking rating arrangement; 14. The outline of the legal advice issued by a practicing lawyer; 15. The conditions for selective or mandatory redemption or termination, e.g. conditions for liquidation repurchase; 16. The interest sensibility analyses of the asset-backed securities of each grade; under the precondition of a given rate of repayment ahead of the schedule, the changes of the yield rate and weighted average time limit of the asset-backed securities of each grade; 17. The reminding of investment risks; 18. The advice of the tax arrangement of the transaction as issued by a certified public accountant; 19. The content of the information to be disclosed during the period of the existence of securities and how to access the information; 20. Other matters as provided for by the People's Bank of China. |
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