Article 1. In accordance with work requirements for the management of bond transactions in the interbank bond market, the National Interbank Funding Center (hereinafter referred to as the CFETS) and China Government Securities Depository Trust & Clearing Co., Ltd. (hereinafter referred to as the CDC) shall be responsible for the frontline monitoring of bond transactions in the interbank bond market.

Article 2. The main aspects of frontline monitoring work for bond transactions in the interbank bond market include: analyzing the influence of relevant policies on the interbank bond market; studying on the establishment of a system of early warning indices for bond transactions and settlement risk; monitoring and understanding market bond trading activities with a focus on the monitoring of abnormal transactions and transactions in breach of rules, with reporting to a higher level when problems are discovered; gathering, sorting out and submitting relevant data and information related to bond trading and settlement.

Abnormal transactions refer to those for which the price concluded deviates significantly from fair market value, instances in which a single quotation or trading value is significantly higher than that actually required, or instances in which two or more parties conduct reverse transactions for false increase of trading volume purposes, etc. Transactions in breach of rules refer to those that violate relevant administrative provisions on the interbank bond market or other laws and regulations.

Article 3. RMB Market Department of the CFETS and the Customer Service Department of the CDC shall undertake daily monitoring and management work for bond transactions and shall assign corresponding full-time staff to be responsible for liaising and communicating with market members.

Article 4. The CFETS and the CDC shall gather and sort out monitoring information for the previous week on the first working day of each week, submit the same to the Head Office of the People’s Bank of China, and send a copy to the National Association of Financial Market Institutional Investors. At the same time, they shall send a copy of information on relevant transactions executed by non-market maker financial institutions to branches of the People’s Bank of China.

Article 5. In the event of the following circumstances, the CFETS and the CDC shall promptly contact the market member concerned for details, make a report to the People’s Bank of China, and initiate an emergency plan according to the circumstances:

(1) A member’s failure to settle multiple transactions may lead to risk for the institution concerned;

(2) An emergency or adjustment of a significant policy leads to abnormal transactions among market members and may trigger market risk;

(3) A natural disaster or other force majeure event leads to abnormal transactions among market members; or

(4) Other circumstances that may have a significant influence on the market.

Article 6. Where a market member is required to explain its trading conduct, it may, on the day on which the relevant transaction is concluded, report the circumstances of the transaction to the CEFTS and the CDC for record filing (for the content and format of the report, see the schedule).

Article 7. The CFETS and the CDC shall regularly report information on the frontline monitoring of bond transactions in the interbank bond market to the People’s Bank of China and shall notify market members when appropriate.

Article 8. The CFETS and the CDC shall be responsible for the interpretation of this Program.

Article 9. This Program shall come into effect as of the date of promulgation.

RMB Market Department of the CFETS

Tel: 021-68797506         Fax: 021-68797606

E-mail address for reports: surveillance@chinamoney.com.cn

Customer Service Department of the CDC

Tel: 010-88087899          Fax: 010-88086355

E-mail address for reports: service@chinabond.com.cn

              September 21, 2009

Attachment: Bond Transaction Explanation Reporting Form