· Document Number：No. 224 [2016] of People's Bank of China

· Area of Law： Negotiable Instruments

· Level of Authority： Departmental Regulatory Documents

· Date issued：08-27-2016

· Effective Date：08-27-2016

· Issuing Authority： People's Bank of China

· Status： Effective

Notice of the People's Bank of China on Regulating and Promoting the Development of the Electronic Commercial Bill Business
(No. 224 [2016] of the People's Bank of China)
The Shanghai Head Office of the People's Bank of China (“PBC”), all branches and business management departments of the PBC, all central sub-branches of the PBC in capital cities of provinces (autonomous regions) and sub-provincial cities and central sub-branch of the PBC in Shenzhen; China Development Bank, all policy banks, state-owned commercial banks, joint-stock commercial banks and Postal Savings Bank of China; and the Clearing Center for City Commercial Banks and the Rural Credit Banks Funds Clearing Center:
For the purposes of fully maximizing the advantages of the electronic commercial bill (hereinafter referred to as the “electronic bill”) system and the electronic bill business, preventing the business risk of paper commercial bills (hereinafter referred to as “paper bills”), and accelerating the electronic process of the bill market, you are hereby notified of the following matters on regulating and advancing the development of the electronic bill business:
I. Increasing system coverage and expanding system functions
1. Increasing system coverage and optimizing the circulation environment of electronic bills.
Banking financial institutions and finance companies (hereinafter collectively referred to as “financial institutions”) that have had no access to the electronic bill system shall accelerate access, and financial institutions that have had access to the electronic bill system shall increase the outlet launching rate as much as possible under the premise of risk control.
All financial institutions shall improve the function of handling the electronic bill business of the internal business system, support the initiation and reception of cross-bank acceptance, cross-bank discount and other services, and support the initiation and receipt of various types of bill services to and from the access institutions represented, and shall not set any obstacle for the cross-bank flow of electronic bills. All banking financial institutions shall concurrently support both online and offline fund clearing methods. The delivery versus payment (DVP) clearing method shall be adopted for bill rediscount business carried out between financial institutions that have launched online clearing functions.
Shanghai Head Office, all branches and business management departments of the PBC, central sub-branches of the PBC in capital cities of provinces (autonomous regions), and central sub-branch of the PBC in Shenzhen (hereinafter collectively referred to as “provincial branch offices of the PBC”) shall support central sub-branches of the PBC in prefectures or cities that have not launched electronic bill rediscount business to access to the electronic bill system, and provide electronic bill rediscount services.
2. Continuously opening the electronic bill simulation operating environment and providing testing convenience.
The China National Clearing Center shall continue to open the simulation operating environment of the electronic bill system, increase the capacity of the simulation operating environment, and provide strong support for business testing of financial institutions. Financial institutions that need to access to the simulation operating environment to conduct tests shall submit test needs and plans to the China National Clearing Center. The China National Clearing Center shall arrange tests within 1 month of the receipt of an application for test from the financial institution. The test period shall not be shorter than 2 months (except when financial institutions proactively end the test).
3. Comprehensively promoting the online clearing functions of finance companies.
From September 1, 2016, finance companies that meet the conditions shall be organized in batches to launch the online clearing function. A finance company that intends to launch the online clearing function shall submit the business needs together with the Application Form for A Finance Company's Authority for Launching the Online Clearing Function (See Annex) in formal document to the Head Office of the PBC through the provincial branch office of the PBC at the place where the legal person is located.
4. Increasing electronic bill transaction entities.
From September 1, 2016, other financial institutions other than banking financial institutions and finance companies as transaction entities in the interbank bond market may join the electronic bill system through the banking financial institutions as represented entities, to carry out electronic bill rediscount (including buyout and repos), presentation for payment and other prescribed business. “RC03” is adopted for the subject identification code of this category of represented institution in the electronic bill system, and an agency shall, through system control, restrict acceptance, discount, rediscount and other service authorities of the represented non-banking financial institutions.
II. Improving the service level and simplifying business operation
1. Improving the service level and facilitating the use of electronic bills by enterprises.
All banking financial institutions shall make joint efforts to improve the level of customer service, disclose the institutions and outlets that launch the electric bill business and their phone numbers through the official websites, promotional leaflets and other methods, develop concise and easy-to-understand business application and operating guidelines, and provide centralized training, door-to-door guidance and other services on the basis of clients' needs. All financial institutions shall, by focusing on the industrial chain leading enterprises or group companies that have close upstream and downstream relationships, drive upstream and downstream enterprises in the industrial chain to use electric bills; and may, by such means of increasing comprehensive marketing efforts, prioritizing electronic bill discount, and offering preferential rates, encourage and direct companies to issue, receive and transfer electric bills. Qualified financial institutions shall also provide facilities for enterprises' handling of counter electronic bill business and batch electronic bill business, and electric bill business under group enterprises' centralized management. Financial institutions shall be encouraged to initiate issuance of bills (including presentation for acceptance and application for delivery), transfer of endorsement, application for discount, etc., and affix electronic signatures based on the agreement on behalf of clients. The Payment and Clearing Association of China shall organize the development of unified functional standards and operation specifications for the electronic bill client, direct financial institutions to further unify and improve the basic functions and operation services that shall be displayed in the E-bank customer interface, and facilitate enterprises' handling of the electronic bill business.
2. Enhancing commercial credit and developing electronic commercial acceptance bills.
Financial institutions shall select enterprises with good credit status and stable production, supply and sales relations, encourage them to issue, receive, and transfer electronic commercial acceptance bills; and explore the use of letters of guarantee, guarantees, and discount surety business and other methods, to strengthen the credibility of electronic commercial acceptance bills, and promote the circulation of electronic commercial acceptance bills. Issuers and acceptors of electronic commercial acceptance bills shall be encouraged to carry out credit rating, the rating information registration function of the electronic bill system shall be fully utilized, the credit guarantee of bills shall be enhanced, the clearing principles of “scrupulously abiding by commitments, and making payments according to the contract” shall be strictly followed, and mature electronic commercial acceptance bills shall be paid in full. A recipient of electronic commercial acceptance bills may use the payment credit inquiry function of the electronic bill system to understand the credit status of the drawer and the acceptor.
3. Improving the examination efficiency of the authenticity of the trade background.
Where an enterprise with sound credit standing applies for acceptance of electronic bill, the financial institution may conduct on-line review of the real transaction relationship and the debtor-creditor relationship of the electronic bill by reviewing the photocopies of the contract, invoice and other materials, as well as the electronic signature of the enterprise. Where an electronic commerce enterprise applies for acceptance of electric bills, the financial institution may conduct on-line review of the real transaction relationship and the debtor-creditor relationship of the electronic bill by reviewing the electronic orders or electronic invoices. An enterprise that applies for electric bill discount is not required to provide contract, invoice or any other materials to the financial institution.
4. Simplifying the rediscount operation.
When handling electronic bill rediscount business (including buyout and repos), the financial institution does not need to re-enter into an offline agreement, and where there are matters that need to be agreed, the financial institution may, through the contract module of the electronic bill system, enter into an agreement, or indicate the agreement on the relevant matters in the column of remarks.
III. Regulating the operation, to ensure the orderly development of business
1. Regulating the entering of organization codes.
An enterprise that holds a business license bearing a unified social credit code shall, when carrying out business through the electronic bill system, enter the 9-17 subject identification code of the uniform social credit code in the “organization code” data field, and enter 10-digit code according to the requirements of entry rules for organization code in the message format standards for the electronic commercial bill system, and an enterprise that has not replaced the business license bearing the uniform social credit code shall still enter the organization code according to the original business rules.
2. Effectively reviewing the continuity of the endorsement of electronic bills.
Where the account numbers, codes of banks of deposit, organization codes and identity categories of the prior endorsee and subsequent endorser of an electronic bill are identical, but the names are different, the continuity identification of the endorsement of the bill shall not be affected, and the acceptor shall pay the funds of the bill. Where the relevant party is indeed required to make explanation, the acceptor shall consult the reply message through the High Value Payment System or contact with the relevant party or the bank of deposit of the party by other means to confirm it in a timely manner.
3. Strictly fulfilling the responsibility for payment of electronic bills.
If a bearer that makes presentation for payment within the period of presentation for payment of an electronic bank acceptance bill issues an order of presentation for payment before 12:00, the acceptor shall, on the current day of receiving the request for presentation for payment (to be postponed in case of a legal holiday, non-business day of the High Value Payment System, and non-business day of the electronic bill system, here and below), make payment or refuse to make payment; and if a bearer issues an order of presentation for payment after 12:00, the acceptor shall, on the current day of receiving the request for presentation for payment or the next day at the latest of receiving a presentation for payment, make payment or refuse to make payment. The access institution of the acceptor of the electronic commercial acceptance bill shall notify the acceptor of the request of the bearer for presentation for payment in a timely manner, and where the acceptor still does not give reply on the third day of the following day of the receipt of a request, the access institution shall give reply on a commissioned basis as agreed in the agreement.
4. Strengthening the examination of the authenticity of the represented access to the electronic bill system.
A financial institution that directly accesses to the electronic bill system shall, when providing agency access services for electronic bills, verify the authenticity of the profile and identity of the represented institution, and conduct verification and confirmation (the inquiry message contents include at least the applicant's full name, name of the legal representative, business license number, financial license number, inquiry items, etc.) of the represented institution through the High Value Payment System, and the represented institution shall give specific reply of agreeing or disagreeing with access.
5. Strictly implementing the rules on the registration of paper commercial bills.
The provincial branch offices of the PBC shall, when giving official replies on plate making for bills of banking financial institutions, review the relevant supporting documents on their access to the electronic bill system to launch the registration and inquiry functions of paper bills or entrust other banking financial institutions to handle the registration of paper bill business on a commission basis. All financial institutions shall strictly implement the relevant requirements of the Measures for the Administration of the Registration and Inquiry of Paper Commercial Bills (No. 328 [2009], PBC). Financial institutions that have not realized automatic importation of the paper bill registration information through the system or unified registration of incorporated institutions shall strengthen the management and examination of the registration of their branch offices, and ensure their registration of the relevant information in a timely, accurate and complete manner. The transferee of the reverse repurchase (matched sale of repo) of paper bills shall handle registration according to the requirements for the registration of rediscount business; and the original transferor that handles redemption of paper bills shall, mutatis mutandis to, the requirements for the registration of rediscount business, handle registration, enter the paper bill redemption date in the date of rediscount, and indicate “redemption” in the column of remarks.
6. Improving the rules on inquiry reply for the bill business.
According to the relevant provisions of the Notice of the Supreme People's Court on the Issues concerning the Publication of Announcements by People's Courts in the Procedure for Announcement to Urge Declaration of Claims (No. 109 [2016] of the Supreme People's Court), all financial institutions shall, when handling discount, rediscount, pledge and other business of bills (including paper bills), understand whether the bills are subject to stop-payment, declaration of claims, etc. in a timely manner through consulting the electronic bill system, www.chinacourt.org, the website of the People's Court Announcement, the People's Court Daily, etc.; and strictly implement the relevant provisions on the inquiry reply of the payment system, comprehensively and faithfully reply the judicial litigation-related, freezing and other information to the inquiring bank, and effectively prevent risks.
IV. Improving the assessment mechanism and strengthening the business supervision
1. Specifying the work objectives and effectively increasing the proportion of the electronic bill business.
All financial institutions shall strictly implement the various regulations and provisions on the electronic bill business, adopt effective measures, regulate the orderly development of the electronic bill business, effectively increase the proportion of the electronic bill business, and ensure that the proportion of acceptance of electronic bills handled in all the acceptance of commercial bills handled by these institutions is increased year by year. From January 1, 2017, commercial bills with single issuing amount of 3 million yuan or more shall all be handled through electric bills; and from January 1, 2018, in principle, commercial bills with single issuing amount of 1 million yuan or more shall all be handled through electronic bills.
2. Establishing the assessment reporting mechanism.
Each financial institution shall, in the light of its reality and the requirements of this Notice, develop detailed measures and schedules for the promotion of the application of the electric bills of the institution, carry out self-inspection of the functions of its internal system for supporting inter-bank business and the business of the represented institution, conduct rectification and optimization in a timely manner where the requirements are not satisfied, submit the detailed measures, promotion schedules, and transformation of the functions of the system to the PBC in formal documents before October 15, 2016, and report the promotion of the electronic bills in the previous year before January 20 of each year. China Development Bank, various policy banks, state-owned commercial banks, joint-stock commercial banks, China Postal Savings Bank, the Clearing Center for City Commercial Banks and the Rural Credit Banks Funds Clearing Center shall submit them to the Head Office of the PBC, and urban commercial banks, rural commercial banks, rural cooperative banks, rural credit cooperatives, village banks, foreign-funded banks and finance companies shall submit them to the provincial branch offices of the PBC where the legal persons are located. The Head Office of the PBC and the branch offices at the provincial level shall establish an assessment and evaluation mechanism for the promotion of the electric bill business of financial institutions, conduct annual assessment and supervision, and notify financial institutions that fail to reach the standard in the annual assessment and supervise their rectification.
The provincial branch offices of the PBC shall, in consideration of the reality of the jurisdictions and the requirements of this Notice, develop the detailed measures and schedules for promoting electronic bills within their jurisdictions, submit them in formal documents to the Head Office of the PBC before October 15, 2016, and report the promotion of the electronic bill business in the previous year before January 20 of each year. The Head Office of the PBC shall establish an assessment and evaluation mechanism for the promotion of the electronic bill business of all provincial branch offices, conduct assessment and supervision on annual basis, and include the completion status in the annual assessment of the payment and settlement work.
3. Smoothing the tip-off channels and increasing the efforts of law enforcement inspection.
The provincial branch offices of the PBC shall strictly implement the disciplines on the clearing of electronic bills and the registration of paper bill business, announce the consultation and tip-off phone numbers, and smooth the tip-off mechanism; and shall focus on the inspection of the development and promotion of the electronic bill business of financial institutions in the law enforcement inspections of payment and clearing. Financial institutions found in tip-off accepted and law enforcement inspections to have such illegal acts as unregulated registration of paper bills and functions of the internal electronic bill system failing to satisfy the requirements for inter-bank business shall be severely investigated and punished according to the law and be urged to make rectification in a timely manner.
The provincial branch offices of the PBC shall forward this Notice to the central sub-branches of the PBC in prefectures or cities, all urban commercial banks, rural commercial banks, rural cooperative banks, rural credit cooperatives, village banks, foreign-funded banks and finance companies within their jurisdictions. Problems encountered in the implementation, if any, shall be reported to the Head Office of the PBC in a timely manner.
Contact person of the Payment System Department of the PBC: Dong Ping, Tel: 010-66195509
Contact person of the China National Clearing Center of the PBC: Wang Huan (simulation operating environment), Tel: 010-51709609; and Wu Dan (information consulting services), Tel: 010-59372652
Annex: Application Form for A Finance Company's Authority for Launching the Online Clearing Function
People's Bank of China
August 23, 2016