China Banking and Insurance Regulatory Commission issues measures governing finance leasing companies’ finance leasing business

The China Banking and Insurance Regulatory Commission published the Measures for the Administration of Finance Leasing Business of Financial Leasing Companies, setting out comprehensive governance, process and risk-control requirements intended to steer financial leasing companies back toward their core finance leasing role and improve the standardisation of their business practices. The measures comprise eight chapters and 68 articles covering general provisions, due diligence, risk assessment and approvals, contract conclusion and execution, post-lease management, risk management and internal controls, supervisory management and supplementary provisions. They emphasise the leased asset as the core of finance leasing, use the direct leasing workflow as the main organising line, and provide corresponding rules for other business types including sale-and-leaseback and operating leases. Risk requirements target key exposures including credit risk, concentration risk and operational risk, and include specific expectations for operating lease asset management, overseas business management and employee conduct controls. The authority indicated it will organise the roll-out and implementation of the measures and continue related supervisory work for the sector.