With the in-depth reform and development of China's financial industry, the demand for financial leasing companies to carry out financial leasing business as project companies is growing, and the management difficulty is also increasing. In order to standardize financial leasing companies to carry out financial leasing business as project companies and strengthen risk prevention, on January 7, 2022, The CBRC issued the measures for the administration of financial leasing companies and project companies (hereinafter referred to as the measures). In 2010, the former CBRC issued the notice on issues related to the establishment of project companies by financial leasing companies in domestic bonded areas to carry out financial leasing business (hereinafter referred to as the notice). Under the guidance of the notice, the project company has been widely used in the business development of financial leasing companies, providing opportunities for China's financial leasing companies to actively explore aviation It has laid a foundation for the professional development of shipping related leasing business. As an alternative to the notice, the measures improve and perfect the rules and regulations, which is conducive to promoting the functions of China's financial leasing companies in serving the real economy.
I. reasons for the establishment of the project company by the financial leasing company
The establishment of the project company is conducive to the risk isolation of the financial leasing company. The regulation requires that each project company corresponds to a lease contract or a single lessee, which will not affect the whole financial leasing company once the risk of the relevant project occurs. For example, an overseas project of a company violates local laws and regulations and involves major penalties. The local may require the freezing of all assets, and the relevant assets will not be unfrozen until it is investigated and adjudicated. The establishment of the project company will only freeze all the assets of the project company, not other assets of the financial leasing company, and effectively isolate the risks.
The establishment of the project company will help the financial leasing company to save tax costs and carry out professional management. The project company can be set up in domestic bonded areas, etc. there are more preferential tax policies in these areas, which can save tax costs for financial leasing companies. At present, most of the top aircraft leasing companies in the world have carried out business in Tianjin, and many project companies have gathered in Tianjin. On the one hand, it benefits from the attraction effect of Tianjin Free Trade Zone, on the other hand, it also benefits from the innovative supervision of leasing business at Tianjin port, which can better solve some problems existing in leasing business, such as saving aircraft transportation costs, adopting differentiated guarantee system, etc. Financial leasing companies set up project companies in such areas, which can better carry out professional management of project assets and improve operation efficiency.
The establishment of a project company is helpful for financial leasing companies to obtain financing for relevant projects. When the company obtains financing, the financing party needs to evaluate the overall credit status of the company, including the existing debt situation, debt structure, etc. The assets and liabilities of the project company are clear and simple, the project can continuously generate cash flow, and it is easier to obtain financing.
II. Content analysis and influence
There are five chapters and 34 articles in the measures. The main contents include: first, clarify the legal basis of the measures, the definition of the project company and the scope of the lease items for financial leasing transactions through the project company; Second, clarify the establishment location, qualification conditions, principles and business scope of the project company; Third, financial leasing companies and professional subsidiaries are required to follow the principles of consolidated management and penetration management to manage the project company, establish and improve the management system and mechanism, and implement comprehensive risk management; Fourth, strengthen risk management and clarify the specific requirements of the corresponding relationship of the project company, equity transfer and transfer, liquidation and closure, functions and levels of overseas management project company; Fifth, clarify the regulatory responsibilities of the banking and insurance supervision and administration institutions, the regulatory requirements such as event reports, regulatory indicators and report submission, and take regulatory measures or impose penalties according to the existing relevant laws and regulations for the existing problems and risks.
The measures broaden the establishment area of the project company and the scope of the leased property, which is conducive to the professional development of relevant fields. The measures continue that the sum of capital of all project companies established by financial leasing companies shall not exceed 50% of their net assets (consolidated statement caliber). At the same time, it is required that the establishment of project companies shall comply with the relevant provisions of the measures for the implementation of administrative licensing matters of non bank financial institutions of the CBRC. In terms of establishment areas, in addition to domestic bonded areas, the measures have added domestic areas such as free trade pilot zones and free trade ports, and widened the establishment area of the project company; At the same time, it also leaves space for the establishment of project companies in other regions in China in the future. In terms of leased items, in addition to aircraft (including engines), ships, offshore engineering structures and other equipment assets approved by the CBRC, the measures add containers, construction machinery and vehicles, broadening the scope of leased items of the project company. China's China's industrial restructuring one after another, one belt, one road, 2025 manufacturing industries, and Tan Dafeng carbon neutral policy has been increasing in recent years, and the demand for large equipment leasing, especially the leasing of environmental protection equipment, is increasing. At present, the establishment of project companies by financial leasing companies is still limited to aircraft, ships and other fields in terms of practical operation. The widening of the scope of leased goods in the measures may also make a breakthrough in the establishment of project companies in large equipment in the future.
The measures strengthen the business penetration management and comprehensive risk management requirements of the project company. In order to effectively prevent and control the risk of developing business in the form of project company, the Measures specify that the project company should follow the "consolidated management principle" and "penetration management principle". Among them, the "consolidated management principle" requires that financial leasing companies and professional subsidiaries should establish and improve the consolidated management system covering the project company and strengthen the consolidated management of the project company, which is conducive to the financial leasing company to promote the construction of a comprehensive risk management system and reduce the possibility of centralized risk outbreak of the project company. The "penetration management principle" requires that the risk management requirements for the project company to carry out business shall not be lower than those for direct business, which is conducive to the strict implementation of risk management requirements by the project company. The measures require that the financial leasing business carried out through the project company be included in the comprehensive risk management system, and strengthen the management of credit risk, market risk, liquidity risk, operational risk and so on. In recent years, financial leasing companies have been subject to regulatory penalties for "failing to submit statistical statements as required", "providing false or concealing important statements" and other violations. When conducting business through the project company, it is necessary to strengthen the authenticity of data submission, avoid illegal operation and incorporate comprehensive risk management into daily management. In addition, the measures require the internal audit department to conduct a special audit on the project company at least once a year, and separately explain the relevant information of the project company in the notes to the annual financial report.
The introduction of the measures is conducive to regulating the overseas exhibition of financial leasing companies. In 2014, the former CBRC issued the notice of the general office of the Bank Of China Limited(601988) industry supervision and Administration Commission on printing and distributing the Interim Provisions on the management of professional subsidiaries of financial leasing companies (hereinafter referred to as the provisions on the management of professional subsidiaries), which pointed out for the first time that financial leasing companies can establish overseas professional subsidiaries and stipulated the conditions for financial leasing companies to apply for the establishment of overseas professional subsidiaries Business operation rules of overseas professional subsidiaries. The measures are an effective supplement to regulate the overseas exhibition of financial leasing companies. It is clear that professional subsidiaries can set up project companies abroad to carry out financial leasing business. Professional subsidiaries should keep the hierarchical structure of overseas project companies clear, simple and transparent in accordance with the principles of legal compliance and risk control; Overseas project companies are required not to exceed level 2 in principle. The measures add a new professional subsidiary, which can set up a management project company overseas for the purpose of investment management of other project companies or financing from other project companies by issuing bonds. The establishment of a management project company will promote the standardized management of the business of the project company and facilitate the financing of overseas project companies. In addition, the project company established by an overseas professional subsidiary shall be subject to the consolidated supervision of the dispatched office of the CBRC where the parent company of the overseas professional subsidiary is located, and shall comply with the laws and regulations of the country or region where the registration is located.
