China's National Financial Regulatory Administration revises financial leasing company supervisory ratings to add an IT management pillar and refine grade structure

China's National Financial Regulatory Administration issued a revised supervisory rating methodology for financial leasing companies, updating both the rating factors and the way results are graded to support more differentiated supervision and align with the revised Financial Leasing Company Administration Measures issued in September 2024. The revised framework sets five rating dimensions: corporate governance, capital management, risk management, professional capability, and information technology management, with respective weights of 20%, 15%, 30%, 25%, and 10%. It integrates the former “management quality” factor and corporate governance supervisory assessment content into the corporate governance dimension, and introduces information technology management as a new standalone factor. Rating results run from 1 (best) to 5 (worst) plus an S category, with grades 2 and 3 further split into A and B; firms with major risks are directly classified as grade 5, while firms undergoing restructuring, takeover, or market exit can be placed in S and excluded from that year’s rating. Supervisors will use the ratings to dynamically adjust supervisory intensity and resource allocation, and as a prudential condition in market access decisions such as changes to business scope, establishment of institutions, and issuance of capital instruments. Where a downgrade means a firm no longer meets conditions for specialised business qualifications, the authority may suspend one or more such businesses following statutory procedures, and can set a one-year observation period during which the relevant activities are temporarily unaffected while the firm remediates issues.