CBIRC Releases New Rules for Financial Leasing Companies

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The China Banking and Insurance Regulatory Commission (CBIRC) has released a new regulations to govern the financial leasing sector.

On 8 January CBIRC announced via its official website that it had issued the “Financial Leasing Company Supervisory Administrative Provisional Measures (Draft Version for Solicitation of Opinions)” (融资租赁公司监督管理暂行办法(征求意见稿)), with a view to “standardising the operating conduct of financial leasing companies and unifying financial leasing operating and supervisory regulations.”

The draft version of the Provisional Measures add the following new requirements:

  • The share of financial leasing and other leasing assets of financial leasing companies cannot be less than 60% of total assets;
  • The total sum of risk assets of financial leasing companies cannot exceed net assets by 8-fold;
  • The fixed income securities investment operations of financial leasing companies cannot exceed 20% of net assets;
  • The full financial leasing operations balance of a single lessee cannot exceed 30% of net assets;
  • The full financial leasing operations balance of a single group cannot exceed 50% of net assets;
  • The full financial leasing operations balance of an affiliated party cannot exceed 30% of net assets;
  • The full financial leasing operations balance for all affiliated parties cannot exceed 50% of net assets.

As of the end of June 2019 there were a total of 10,900 financial leasing companies in China, including 385 domestically invested trial financial leasing companies and 10,515 foreign invested financial leasing companies.

Their combined registered capital was 3.0699 trillion yuan, while their total assets were 4.067654 trillion yuan.

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