The China Banking and Insurance Regulatory Commission recently issued the regulations on off-site supervision of financial leasing companies (hereinafter referred to as the regulations), which defined the procedures and methods related to off-site supervision of financial leasing companies, so as to make up for the shortcomings of the supervision system of financial leasing companies. Industry insiders believe that the gradual improvement of the relevant regulatory rules of financial leasing companies will contribute to the standardized development of the financial leasing industry. In the future, some non-standard behaviors that exploit regulatory loopholes and platform companies will be gradually cleared out.
stricter supervision of financial leasing industry
According to the spirit of the fifth national financial work conference in 2017, the CBRC is responsible for formulating the business rules and regulatory rules of financial leasing companies, and the local governments implement supervision. With the opening of the curtain of strict supervision of financial leasing, all localities have successively carried out clean-up, investigation and list management of financial leasing companies, steadily and orderly promoted classified disposal, and gradually standardized industry management. According to statistics, by the end of September 2021, 667 and 7019 financial leasing companies had been included in the regulatory list and the list of abnormal operating enterprises and publicized to the public respectively. The preliminary classified disposal work has been completed in stages and has the basic conditions for off-site supervision.
The relevant person in charge of the cbcirc said that the regulations made it clear that local financial regulatory authorities should take the analysis and evaluation results of off-site supervision as an important reference for on-site inspection and classified disposal, implement classified supervision according to the risk and compliance degree of institutions, and establish and improve the supervision and evaluation mechanism.
According to the regulations, the off-site supervision of financial leasing companies by local financial regulatory departments should focus on the changes in the external business environment, corporate governance, internal control, risk management ability, asset quality and liquidity indicators of financial leasing companies. For the abnormal changes in the supervision indicators of financial leasing companies found in off-site supervision, local financial supervision departments can take measures such as risk prompt, interview, on-site visit and rectification.
Yang Xinliang, Executive Deputy Secretary General of Tianjin Leasing Industry Association, said that the regulations are the specific guidance and requirements of the CBRC on the supervision of local financial supervision and administration departments for financial leasing companies after the promulgation of the Interim Measures for the supervision and administration of financial leasing companies in 2020, and the requirements for internal control compliance and data submission of financial leasing companies are becoming more and more strict and specific. If it cannot be included in the supervision list of the CBRC, most financial leasing enterprises will face the possibility of withdrawal after the transition period.
Han Xu, general manager of Tianjin Xinhai Financial Leasing Co., Ltd., believes that the regulations reflect the trend of strict supervision in the financial leasing industry and the gradual standardization of the leasing industry. "In the future, some non-standard behaviors that exploit regulatory loopholes and platform companies will be gradually cleared out, which is a good thing for companies that focus on leasing business for a long time."
whether the cross provincial exhibition industry can be concerned
As financial leasing is a financial substitute for financing with leasing as the core, the characteristics of cross provincial business of financial leasing companies are obvious, and the proportion of cross provincial business of financial leasing companies reaches 90%. The regulation specifies that, according to the principle of legal person supervision, the off-site supervision of branches and special project companies (SPV) is the responsibility of the local financial supervision department where the legal person of the financial leasing company is registered, and the supervision indicators and business indicators are calculated in combination with the legal person of the financial leasing company. The regulations on local financial supervision and Administration (Draft for comments) issued by the people's Bank of China at the end of last year stipulates that local financial organizations shall not carry out business across provincial administrative regions in principle, which is highly concerned by the industry.
The relevant person in charge of a financial leasing company told reporters that in recent years, the enterprise has continuously improved the localization development level, and has set up more than 20 branches and subsidiaries across the country. The branches and subsidiaries are incorporated into the consolidated statements of the company's headquarters, and they are consolidated in the submission of regulatory data and business indicators. However, if the financial leasing company is not allowed to cross Provincial Exhibition, it will bring great challenges to the company's business development and layout.
The relevant person in charge of the CBRC said that the clear requirements for the off-site supervision of financial leasing companies to set up branches and special project companies across provinces are mainly based on the development and stock status of financial leasing companies, which does not reflect the supervision guidance of financial leasing companies to carry out business across provinces. Next, the CBRC will formulate and improve the relevant business and regulatory rules of financial leasing companies in accordance with the legislative process and relevant requirements of the local financial supervision and administration regulations.
How to improve the effectiveness and deterrence of supervision has also attracted much attention. In the part of regulatory measures, the regulations specify that local financial regulatory departments can carry out differentiated supervision according to the risk severity of financial leasing companies, and take regulatory measures such as improving the frequency of information submission, requiring to enrich the risk management force, carrying out risk tips and regulatory notifications, carrying out regulatory talks, and improving the frequency of on-site inspection.
Yang Xinliang said that due to the lack of a national superior law, the local regulatory authorities have limited punishment means for financial leasing companies. In the future, it is also necessary to further clarify the punishment power of the regulatory authorities for illegal acts and standardize the development of the financial leasing industry.
