CBIRC Issues New Regulations for Financial Leasing Firms, Gives Greater Role to Local Authorities

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China’s banking regulator has issued new rules for the offsite inspection and regulation of the country’s financial leasing firms.

On 15 February the China Banking and Insurance Regulatory Commission (CBIRC) issued the “Financial Leasing Firm Off-site Regulatory Procedures” (融资租赁公司非现场监管规程), for the purpose of “clarifying responsibilities in relation to off-site regulation of financial leasing firms, and standardising off-site regulatory procedures.”

The Procedures step up the authority and responsibilities of local financial departments when it comes to the regulation of financial leasing firms within their respective jurisdictions.

They allow local financial authorities to “undertake differentiated regulation depending upon the severity of risk of financial leasing firms, and adopt regulatory measures including increases to the information reporting frequency, requiring greater risk management capability, issuing risk warnings and regulatory notifications, undertaking regulatory discussions and increasing the frequency of on-site inspections.”

The issuance of the new Procedures arrives following the release of the “Financial Leasing Firm Temporary Administrative Measures” by CBIRC in June 2020 (融资租赁公司监督管理暂行办法), as part of efforts to better regulate China’s financial leasing sector.

As of the end of September 2021 667 financial leasing firms had been placed on regulatory lists, while 7019 had been placed on lists for irregular operations.