China Banking Regulatory Commission, Opinion on Effectively Safeguarding against the Risks of Providing Security for the Issuance of Bonds by Enterprises

Issued: October 12 2007

Main Contents: All banks shall cease to provide security for bonds issued by enterprises that are mainly used to finance projects. In regard to other financing projects such as enterprise bonds for other purposes, corporate bonds, trust plans, earnings plan of insurance companies and special asset management schemes of securities brokers, no security shall be issued by banks in principle. Where a bank has already provided security, it shall adopt measures to withdraw gradually, and add necessary asset preservation measures in a timely manner (Article 3). Off-balance-sheet contingent liabilities such as security provision shall be included under unified credit granting management (Article 4).