China's National Financial Regulatory Administration (NFRA) issued the Measures for the Administration of Financial Leasing Companies’ Finance Leasing Business, setting end-to-end operational and risk management requirements for finance leasing activities to standardise conduct and strengthen controls across the business lifecycle. The Measures comprise eight chapters and 68 articles covering due diligence, risk assessment and approval, contract formation and execution, post-lease management, risk management and internal controls, and supervisory arrangements. Requirements are tailored to leasing features by prioritising the compliance of the leased asset type and strengthening asset-related checks on suitability, ownership, valuation and physical condition, as well as registration and delivery and state-based post-lease management for assets under construction, in lease, at maturity and pending lease. Risk provisions include differentiated requirements for direct leasing, sale-and-leaseback and operating leases, with specified controls for credit, concentration, operational and related-party transaction risks, alongside expectations for internal control, internal audit, incentive and constraint mechanisms, and key controls for operating lease asset management, overseas business and employee conduct. For sale-and-leaseback, the Measures require ownership verification and valuation governance, prohibit low-value assets being overvalued, cap the business amount at the leased asset value, and require monitoring of fund use to prevent misuse; for operating leases, firms must strengthen asset operations, maintenance and insurance, track valuation changes, revalue periodically, perform impairment testing and make sufficient impairment provisions. NFRA indicated it will organise implementation of the Measures and supervise financial leasing companies’ compliance with the new framework.
China Banking and Insurance Regulatory Commission 2025-12-05
China's National Financial Regulatory Administration issues rules tightening financial leasing companies’ finance leasing business management
China's National Financial Regulatory Administration issued the Measures for the Administration of Financial Leasing Companies’ Finance Leasing Business, establishing operational and risk management requirements. The Measures cover due diligence, risk assessment, contract management, and supervisory arrangements, with provisions for direct leasing, sale-and-leaseback, and operating leases. NFRA will oversee implementation and compliance with this framework.