The People's Bank of China ("PBC") has recently issued the Announcement of the People's Bank of China [2017] No.12 (the "Announcement"), effective from September 1, 2017.
According to the Announcement, some provisions in Article 8 of the Interim Administrative Measures for Interbank Negotiable Certificates of Deposit, stating that "the terms of interbank certificates of deposit with a fixed interest rate should not exceed one year in principle, and generally be one month, three months, six months, nine months or one year; and such certificates are priced with reference to the Shanghai Interbank Offered Interest Rate for the same terms. The certificates of deposit with floating interest rates should be accrued for interests based on the Shanghai Interbank Offered Rate, and their terms should, in principle, exceed one year, including one year, two years and three years", are revised to read as "the term of interbank certificates of deposit should not exceed one year, being one month, three months, six months, nine months or one year, and may be accrued for interests based on either the fixed interest rate or the floating interest rate and be priced with reference to the Shanghai Interbank Offered Interest Rate for the same terms". In addition, the Announcement makes it clear that from September 1, 2017, financial institutions are prohibited from issuing new certificates of deposit with a term of over one year (exclusive), but those previously issued with a term of over one year (exclusive) may remain valid until maturity.