All branches and operations offices of the People's Bank of China, the central sub-branches of the capital cities of all provinces, Shenzhen Central Sub-branch, all policy banks, wholly State-owned commercial banks and joint-stock commercial banks, the National Interbank Funding Center, and China Government Securities Depository Trust & Clearing Co. Ltd.:
Pursuant to Article 5 of the Primary Agreement of Forward Bond Transactions in the National Inter-bank Bond Market, both parties to a transaction may determine the margins or guaranty securities through negotiations in light of the credit status of their respective trading counterpart for the purpose of ensuring the performance of the forward transaction contract. The notice on the policies in relation to the rate on margins is given as follows:
I. Where the margin is kept by both parties themselves, its interest rates shall be determined in light of the policies on lifting control over inter-bank deposit rates of commercial institutions, and the interest rates and the method for paying interests shall be determined by both parties through negotiations.
II. Where the margin is kept in a whole packet, the National Interbank Funding Center and China Government Securities Depository Trust & Clearing Co. Ltd. Shall open a special account for depositing at a local branch of the People's Bank of China (PBC), and the PBC shall not calculate or pay interests for it.
The People's Bank of China
August 30, 2005
