For the purposes of accelerating the development of ecological civilization guiding the green development of the services of financial institutions, and promoting the structural transformation and upgrade of the economy and t shift of economic development modes, in accordance with the Law of the People's Republic of China on the People's Bank of China and the Measures for the Administration of the Issue of Financial Bonds on the National Interbank Bond Market (No. 1 [2005], PBC), the following matters concerning the issue of green financial bonds on the interbank bond market are hereby announced:
I. For the purposes of this Announcement, “green financial bonds” means the denominated securities issued by incorporated financial institutions to raise funds mainly for supporting green industries, with the repayment of the principal and the payments of interest as agreed on. For the scope of green industry projects, please see the Catalogue of Projects Supported by Green Bonds (See Annex).
II. For the purposes of this Announcement, “incorporated financial institutions” includes development banks, policy banks, commercial banks, finance companies of enterprise groups, and other legally established financial institutions.
III. To issue green financial bonds, an incorporated financial institution shall meet all of the following conditions:
(1) It has a sound corporate governance mechanism.
(2) It earned profits in the most recent year (excluding development banks and policy banks), and has not committed any serious violation of laws and regulations in the last three years.
(3) It satisfies the requirements for macro-prudential regulation, and its financial risk supervision indicators comply with the relevant rules of the financial regulatory authorities.
(4) It has adequate and effective rules on the credit extension, risk control, and marketing, among others, for green industry projects and a mature business team.
IV. To apply for an issue of green financial bonds, an incorporated financial institution shall submit the following materials to the People's Bank of China (“PBC”):
(1) An application report for the issue of green financial bonds.
(2) A prospectus for green financial bonds, including but not limited to the categories of green industry projects in which the funds raised are to be invested, the criteria for project selection, the decision-making procedures for projects, the environmental benefit objectives, and the plan and management rules for the use of funds raised from green financial bonds.
(3) Written documents on the consent of the governing body specified in its bylaws or constitutional documents.
(4) Its audited financial reports and audit reports for the most recent three years and its financial report for the most recently completed period.
(5) A letter of commitment to investment of the funds raised in green industry projects.
(6) Other documents as required by the PBC.
V. In addition to the application materials as set out in article IV of this Announcement, an incorporated financial institution applying for an issue of green financial bonds is encouraged to submit an evaluation or certification opinion issued by an independent professional evaluation or certification institution.
VI. An issuer granted approval to issue green financial bonds (“issuer”) shall, within five working days before each issue of green financial bonds, submit the following materials to the PBC for recordation:
(1) The prospectus for the current issue of green financial bonds.
(2) The written administrative licensing decision of the PBC to grant approval of the issue of green financial bonds (photocopy).
(3) The underwriting agreement and underwriting syndicate agreement signed.
(4) The credit rating report for financial bonds and a statement on arrangements for continuous follow-up rating issued by a credit rating agency.
(5) A legal opinion issued by the issuer's lawyer.
(6) Other documents as required by the PBC.
VII. An issuer may issue green financial bonds by bidding or book building. To issue bonds by book building, an issuer shall, in the recordation materials, add the plan for issue by book building, including but not limited to the specific principles and methods for pricing and placement by book building and the measures for preventing operational risk and tunneling.
VIII. An issuer may issue green financial bonds all in one issue or in installments under a specified limit. An issuer that has issued any financial bonds and complied with subsequent supervision and administration requirements may apply for issue in installments under a specified limit.
IX. An issuer shall invest the funds raised in green industry projects within the time limit specified in its commitments in the prospectus. During the idle period of the funds raised, the issuer may invest the funds in green bonds issued by non-financial enterprises and monetary market instruments with good credit ratings and market liquidity.
X. An issuer shall open a special account or maintain a special journal to enhance the management of the receipt, disbursement, and recovery of the funds raised from green financial bonds and guarantee that the funds are exclusively used for and completely invested in green industry projects in the duration of bonds.
XI. An issuer shall disclose information on the use of funds raised to the market on a quarterly basis. An issuer shall, before April 30 each year, disclose the annual report and special audit report on the use of the funds raised for the previous year and information on the use of funds raised for the first quarter of the current year, and report the use of funds raised from green financial bonds for the previous year to the PBC.
XII. In the duration of green financial bonds, an issuer is encouraged to annually disclose an evaluation report issued by an independent professional evaluation or certification institution to the market to carry out continuous follow-up evaluation on the development of the green industry projects supported by green financial bonds and their environmental impacts, among others.
XIII. An issuer may, under an agreement, make market-making arrangements for green financial bonds with the lead underwriter or any other institution qualified as a market maker.
XIV. The registration, custody, and clearing of green financial bonds shall be conducted at the registration, custody, and clearing institution recognized by the PBC.
XV. Green financial bonds issued by issuers may be included in the scope of collateral under the relevant monetary policy operations of the PBC.
XVI. Relevant government departments and local governments are encouraged to issue preferential policies and measures to support the development of green financial bonds.
All types of financial institutions, securities investment funds, and other investment plans, the Social Security Fund, enterprise annuities, social welfare funds, and other institutional investors are encouraged to invest in green financial bonds.
XVII. The PBC gathers statistics specifically on the use of funds raised from green financial bonds, and disclose the statistical results on a regular basis.
XVIII. The issue of green financial bonds on the interbank bonds market by an overseas financial institution that satisfies the relevant requirements for the issue of bonds in the territory of the People's Republic of China shall be governed mutatis mutandis by this Announcement.
The rules for the administration of the issue of non-financial enterprise debt financing instruments by non-financial enterprises to support green industry projects shall be otherwise developed by the National Association of Financial Market Institutional Investors.
XIX. This Announcement shall be subject to interpretation by the PBC. Matters not included in this Announcement shall be governed by relevant rules of the PBC.
XX. This Announcement shall come into force on the date of issuance.
Annex:
Catalogue of Projects Supported by Green Bonds (Omitted)
The People's Bank of China
December 15, 2015
