China's National Financial Regulatory Administration published an update on its special rectification programme for six categories of local financial organisations and, together with other agencies, set the supervisory priorities for 2026. The regulator reported a sustained clean-up of non-compliant institutions and market misconduct, alongside a push for remaining firms to refocus on core business lines and consumer protection. The campaign covers microloan companies, financing guarantee companies, pawnshops, financial leasing companies, commercial factoring companies, and local asset management companies. Enforcement has targeted “missing” and “shell” entities and firms with serious illegal operations, as well as practices such as excessively high interest and fees, disguised multiple charges, and improper debt collection; measures used by local authorities include public disclosure of non-compliant institutions, withdrawal of operating qualifications, credit sanctions, and orderly exit. By end-December 2025, the number of these organisations was down 26% year on year and 55% from its historical peak, with more than 5,600 non-compliant institutions exited cumulatively since 2024. For 2026, the regulator said it has jointly deployed local financial organisation supervision work with the People’s Bank of China, the State Administration for Market Regulation and the China Securities Regulatory Commission, calling for stronger oversight, continued rectification and focused governance of key areas of disorder, while guiding firms to “reduce quantity and improve quality” and better serve the real economy and livelihoods.

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