Decree of China Banking Regulatory Commission
No. 1 The Measures for Administering Finance Leasing Companies have been adopted at the 55th chairmen’s meeting on December 28, 2006, are January 23, 2007 Measures Administering Finance Leasing Companies Article 1 For the purpose of promoting the healthy development of the finance leasing industry of our country and strengthening the supervision Article 2 The “finance leasing companies” as mentioned in the present Measures means the non-banking financial institutions mainly engaging The name of a finance leasing company shall include words “finance leasing”. Unless it is otherwise prescribed by any law or regulation, Article 3 The term “finance leasing” as mentioned in the present Measures means such trading activities by which the lessor leases the objects The leased objects applicable to the finance leasing business shall be fixed assets. Article 4 The term “business of sale and rent-back” as mentioned in the present Measures means such business by which the lessee sells its Article 5 The expression “relationship of associated parties and associated transaction ” as mentioned in the present Measures means the relationship Article 6 The CBRC and its dispatched institutions shall impose supervision and administration on the finance leasing companies in accordance Chapter II Establishment, Alteration and Termination of Institutions Article 7 For applying for the establishment of a finance leasing company, the following requirements shall be satisfied: (1) having contributors satisfying the requirements of the present Measures; (2) having the minimum registered capital as provisioned in the present Measures; (3) having the articles of association in line with the Company Law of the People’s Republic of China and the present Measures; (4) having directors and senior managers satisfying the post holding qualification requirements as specified by the CBRC, as well as qualified (5) having perfect systems for corporate governance, internal control, business operation and risk prevention, etc.; (6) having qualified business places, safety measures and other facilities in relation to business operations; and (7) satisfying other requirements as specified by the CBRC. Article 8 The contributors of a finance leasing company are sorted into the principal contributors and ordinary contributors. The former means The principal contributor shall, as the applicant, file an application to the CBRC for the establishment of a finance leasing company. Article 9 The principal contributor of a finance leasing company shall satisfy any of the following requirements: (1) a commercial bank with independent legal person status as registered at home or abroad shall also satisfy the following requirements: I. its capital adequacy ratio satisfies the requirements of the finance supervisory organ in the place where the commercial bank is registered II. its year-end assets for the recent one year is not below RMB 80 billion Yuan or any freely convertible currency with equivalent value; III. it has consecutively made profits for the recent two years; IV. it complies with the laws and regulations of its registration place, and has not been involved in any major case or committed any V. it possesses good corporate governance structure and internal control mechanism as well as perfect risk management system ; and VI. it satisfies the other prudential requirements as specified by the CBRC. (2) a lease company as registered at home or abroad shall also satisfy the requirements as follows: I. its year-end assets for the recent one year is not below RMB 10 billion Yuan or any freely convertible currency with equivalent value; II. it has consecutively made profits for the recent two years; and III. it conforms to the laws and regulation of its registration place, and has not been involved in any major case or committed any serious (3) a large-scale enterprise, which is registered within the territory of China and whose main business is to produce products fit for I. its year-end assets for the recent one year is not below RMB 50 billion Yuan or freely convertible currency with equivalent value; II. it has consecutively made profits for the recent two years; and III. its year-end ratio of net assets for the recent one year is not below 30%; IV. its incomes from main businesses account 80% or more of all its business incomes; V. it possesses good credit records; and VI. it complies with the laws and regulations of its registration place, and has not been involved in any significant case or committed (4) other financial institutions that are recognized by the CBRC to be the principal contributor. Article 10 A general contributor of a finance leasing company shall conform to the related provisions of the CBRC on the investment into and Article 11 The minimum registered capital of a finance leasing company is RMB 100 million Yuan or any freely convertible currency with equivalent The CBRC may adjust the minimum registered capital of finance leasing companies on the basis of the demand for the development of Article 12 The establishment of a finance leasing company covers two phases: preparatory establishment and start of business. The Chinese version Article 13 For applying for the preparatory establishment of a finance leasing company, an applicant shall submit the documents as follows: (1) an application form for preparatory establishment, which shall cover the name, registration place, registered capital, contributors (2) a feasibility study report, which shall cover the market prospect analysis, future business development programs, organizational management (3) the (draft) of the articles of association of the finance leasing company to be set up; (4) the basic information on contributors, including the name, legal representative, registration place, photocopy of business license, (5) annual audit reports audited by qualified intermediary institutions of the contributors for the recent two years; and (6) other documents as required by the CBRC to be submitted. Article 14 After the preparatory establishment of a finance leasing company has been accomplished, the applicant shall apply for business start (1) a report on preparatory establishment work, and an application form for business start; (2) a capital assessment certificate issued by a qualified domestic intermediary institution, and a registration letter issued by the (3) a shareholders brochure , and the amount and proportion of their contributions; (4) articles of association of the finance leasing company, which shall at least cover the name, business place, nature of institution, (5) the name list, specific resumes and certification materials on post holding qualification of the senior managers to be appointed; (6) bylaws for the businesses to be operated, and risk control rules; (7) materials about the business place and other facilities in relation to business; and (8) other documents as required by the CBRC. Article 15 A finance leasing company may, upon approval of CRBC, establish a branch. The specific requirements for the establishment of branches Article 16 The CBRC shall carry out the post holding qualification approval system to directors and senior managers of finance leasing companies. Article 17 A finance leasing company shall report to the CBRC for approval any of the following changes: (1) change of name; (2) change of organizational form; (3) adjustment of business scope; (4) change of registered capital; (5) change of stock rights; (6) modification of articles of association; (7) change of registration place or business place; (8) change of directors or senior managers; (9) merger or division; or (10) any other matter prescribed by the CBRC. Article 18 A finance leasing company may be dissolved upon approval of the CBRC under any of the following circumstances: (1) The business term as prescribed in its articles of association expires or any other cause for dissolution as specified by its articles (2) The (general) assembly of shareholders makes a resolution on dissolution; (3) The dissolution is required by virtue of the merger or division of the company; (4) The company’s business license is revoked, the company is ordered to be closed down or is canceled ; or (5) Any other statutory cause. Article 19 A finance leasing company may apply to the court for bankruptcy upon approval of the CBRC under any of the following circumstances: (1) It can not pay its due debts, and apply for bankruptcy as initiated by itself or as required by the creditor; or (2) It is liquidated by virtue of dissolution or revocation, and the liquidation group finds that the assets of the finance leasing company Article 20 If a finance leasing company fails to pay off its due debts and its assets are not enough to pay off all the debts or it clearly Article 21 In case a finance leasing company is terminated by virtue of bankruptcy, revocation or bankruptcy announcement, liquidation shall Chapter III Business Scope Article 22 A finance leasing company may, upon approval of the CBRC, engage in all or part of the following businesses in RMB or any foreign (1) to conduct finance leasing business; (2) to absorb time deposits with the term of one year or longer from its shareholders; (3) to accept the guaranty bonds for lease from the lessee; (4) to transfer receivable payment for lease to commercial banks; (5) to issue financial bonds upon approval; (6) to conduct inter-bank lending; (7) to borrow money from financial institutions; (8) to borrow foreign exchanges from abroad; (9) to sell off and dispose of the scrap value of leased objects; (10) to conduct economic consultancy; and (11) other businesses as approved by the CBRC. Article 23 Any finance leasing company is prohibited from absorbing deposits from any bank shareholder. Article 24 If the business of a finance leasing company involves in any matter about foreign exchange control, it shall observe provisions on Chapter IV Business Rules Article 25 With respect to corporate governance, a finance leasing company shall set up an organizational framework mainly composed of the (general) Article 26 A finance leasing company shall, in accordance with the principles of full scale, prudence, effectiveness and independence, set up Article 27 The associated transaction of a finance leasing company shall, in accordance with the commercial principle, be carried out on terms Article 28 A finance leasing company shall constitute rules for managing associated transaction, which shall specifically include: (1) supervision over and management of associated transaction by the board of directors or the business decision-making body; (2) duties and personnel composition of the associated transaction control committee; (3) collection and management of the information about associated parties; (4) rules for reports, commitments, identification and confirmation of associated parties; (5) types, price fixing polices, examining and approving procedures and standards for associated transaction; (6) withdrawal system; (7) internal audit and supervision; (8) information release; (9) punishment measures; and (10) other contents as required by the CBRC. Article 29 Any major associated transactions of a finance leasing company shall be subject to approval of the board of directors. The “major Article 30 When the board of directors of a finance leasing company, the operation decision-making institution of a finance leasing company Article 31 For the business of sale and rent-back, a specific subject matter is required, and the subject matter shall comply with the present Article 32 The subject matter of the business of sale and rent-back shall be actually owned by the lessee and the lessee shall have the right Article 33 A finance leasing company shall, in the business of sale and rent-back, have the price fixing basis that is reasonable and does not Article 34 A finance leasing company, which engages in the business of sale and rent back, shall actually obtain the ownership of corresponding Chapter V Supervision and Administration Article 35 A finance leasing company shall conform to the following supervisory indicators: (1) Capital adequacy ratio. The net capital of a finance leasing company may not be below 8% of the risk weighted assets; (2) Finance concentration ratio to a single client. The financing balance of a finance leasing company to a single lessee may not be more (3) Correlation degree of single clients. The financing balance of a finance leasing company to an associated party may not be more than (4) Correlation degree of group clients. The financing balance of a finance leasing company to all the connected parties may not be more (5) Inter-bank lending proportion. The capital balance of inter-bank lending of a finance leasing company to all the associated parties The CBRC may, on the basis of the demand of supervisory work, properly adjust the aforesaid indicators. Article 36 A finance leasing company shall make information disclosure in accordance with related accounting standards for business enterprises Article 37 For risk assets, a finance leasing company shall conduct the five-grade classification system. Article 38 A finance leasing company shall, in accordance with related provisions, constitute rules for bad debt provisions, and prepare the Article 39 A finance leasing company shall, in accordance with the legal provisions, prepare balance sheets, profit and loss statements and Article 40 A finance leasing company shall, within 4 months as of the end of each accounting year, submit to the CBRC or its dispatched institution Article 41 A finance leasing company shall set up a regular external audit system, and shall, within 4 months as of the end of each accounting Article 42 If a finance leasing company goes against the related provisions in the present Measures, the CBRC may order it to make corrections Article 43 If a finance leasing company has fell in or may fall in a credit crisis, which seriously damages the lawful rights and interests Article 44 If a finance leasing company goes against any related provision in the present Measures, the CBRC may punish it in accordance with Chapter VI Supplementary Rules Article 45 The CBRC shall be responsible for the interpretation of the present Measures. Article 46 The present Measures shall go into effect as of March 1, 2007. |
China Banking Regulatory Commission
2007-01-23