Article 16 A public issuance of corporate bonds shall satisfy the following requirements:
 (1) The net asset of a stock-limited company being no less than RMB 30 million yuan and the net asset of a limited-liability company being no less than RMB 60 million yuan;
 (2) The accumulated bond balance constituting no more than 40 % of the net asset of a company;
 (3) The average distributable profits over the latest 3 years being sufficient to pay the 1-year interests of corporate bonds;
 (4) The investment of raised funds complying with the industrial policies of the state;
 (5) The yield rate of bonds not surpassing the level of interest rate as qualified by the State Council; and
 (6) Meeting any other requirements as prescribed by the State Council. The funds as raised through public issuance of corporate bonds shall be used for the purpose as verified and may not be used for covering any deficit or non-production expenditure. The public issuance of convertible corporate bonds as made by a listed company may not only meet the requirements as provided for in paragraph 1 herein but also meet the requirements of the present Law on public offer of stocks, and shall be reported to the securities regulatory authority under the State Council for examination and approval.

Article 17 With regard to an application for public issuance of corporate bonds, the following documents shall be reported to the department as authorized by the State Council or the securities regulatory authority under the State Council:
 (1) The business license of the company;
 (2) The constitution of the company;
 (3) The procedures for issuing corporate bonds;
 (4) An assent appraisal report and an asset verification report; and
 (5) Any other document as prescribed by the department as authorized by the State Council or by the securities regulatory authority under the State Council. In case a recommendation party shall be employed, as prescribed by the present Law, the Recommendation Letter of Issuance as produced by the recommendation party shall be submitted as well.

Article 18 In any of the following circumstances, no more public issuance of corporate bonds may be carried out:
 (1) Where the corporate bonds as issued in the previous public issuance haven't been fully subscribed;
 (2) Where a company has any default on corporate bonds as publicly issued or on any other liabilities, or postpones the payment of the relevant principal plus interests, and such situation is still continuing; or
 (3) Where a company violates the present Law by altering the use of funds as raised through public issuance of corporate bonds.

Article 19 The formats and reporting ways of application documents as reported by an issuer for examination and approval of securities issuance according to law shall be prescribed by the legally competent organ or department in charge of examination and approval.

Article 20 The application documents for securities issuance as reported by an issuer to the securities regulatory authority under the State Council or the department as authorized by the State Council shall be authentic, accurate and integrate. A securities trading service institution and its staff that produces the relevant documents for securities issuance shall strictly perform its/his statutory duties and functions and guarantee the authenticity, accuracy and integrity of the documents as produced thereby.

Article 21 Where an issuer files an application for an IPO of stocks, it shall, upon submitting the application documents, disclose the relevant application documents in advance according to the provisions of the securities regulatory authority under the State Council.

Article 22 The securities regulatory authority under the State Council shall establish an issuance examination committee, which shall examine the applications for stock issuance according to law. The issuance examination committee shall be composed of the professionals from the securities regulatory authority under the State Council and other relevant experts from outside the said authority, adopt the means of voting for the determination of applications for stock issuance and set forth the opinions on examination. The specific formulation measures, tenure of members as well as work procedures of the issuance examination committee shall be formulated by the securities regulatory authority under the State Council.

Article 23 The securities regulatory authority under the State Council shall take charge of the examination and approval of applications for stock issuance in light of the statutory requirements. The procedures for examination and approval shall be publicized and shall be subject to supervision according to law. The personnel participating in the examination and verification of stock issuance may not have any interest relationship with an issuance applicant, may not directly or indirectly accept any present of the issuance applicant, may not hold any stock as verified for issuance and may not have any private contact with an issuance applicant. The department as authorized by the State Council shall conduct the examination and approval of applications for issuance of corporate bonds by referring to the preceding 2 paragraphs herein.

Article 24 The securities regulatory authority under the State Council or the department as authorized by the State Council shall, within 3 months as of acceptance of an application for securities issuance, make an decision on approval or disapproval according to the statutory requirements and procedures, whereby the time for an issuer to supplement or correct its application documents for issuance according to the relevant requirements may not be calculated within the aforesaid term for examination and approval. In the event of disapproval, an explanation shall be given in writing.

Article 25 Where an application for securities issuance has been approved, the relevant issuer shall, in accordance with the provisions of the relevant laws and administrative regulations, announce the relevant financing documents of public issuance before publicly issuing any securities and shall make the aforesaid documents available for public reference in designated places. Before the information of securities issuance is publicized according to law, no insider may publicize or indulge the relevant information. An issuer may not issue any securities before an announcement of the relevant financial documents of public issuance.

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