Sui Jin Rong Gui [2020] No. 3
Notice of Guangzhou Municipal Local Financial Supervision and Administration Bureau on Issuing the Interim Measures for the Supervision and Administration of Financing Guarantee Companies in Guangzhou
To all parties concerned:
The Interim Measures for Supervision and Administration of Financing Guarantee Companies in Guangzhou has been approved by the Guangzhou Municipal People’s Government and is hereby issued for your due implementation. Problems encountered in the course of implementation should be directly reported to the Guangzhou Municipal Local Financial Supervision and Administration Bureau.
Guangzhou Municipal Local Financial Supervision and Administration Bureau
August 28, 2020
Interim Measures for the Supervision and Administration of Financing Guarantee Companies in Guangzhou
Chapter 1 General Provisions
Article 1 In order to strengthen the supervision and administration of financing guarantee companies, regulate financing guarantee actions, guard against risks, and promote the healthy development of the financing guarantee industry in Guangzhou, these Interim Measures are formulated in accordance with the Regulations on the Supervision and Administration of Financing Guarantee Companies (Guo Wu Yuan Ling No. 683), the Opinions of the State Council on Accelerating the Development of the Financing Guarantee Industry(Guo Fa [2015] No. 43), the Notice of the Guangdong Provincial People’s Government on Issuing the Implementation Plan for Accelerating the Development of Financing Guarantee Industry in Guangdong Province(Yue Fu Han [2016] No. 5), the Rules for the Implementation of the Interim Measures for the Administration of Financing Guarantee Companies in Guangdong Province(Yue Fu Ling No. 149), the Notice of the General Office of the Guangzhou Municipal People’s Government on Issuing the Implementation Plan for Accelerating the Development of the Financing Guarantee Industry in Guangzhou(Sui Fu Ban [2018] No. 27), the Notice of the Guangdong Financial Supervisory Authority on Continuing to Entrust Guangzhou with the Implementation of Relevant Administrative Functions and Powers for Financing Guarantee Companies and Microfinance Companies(Yue Jin Jian Han [2019] No. 165) and other relevant provisions, and in light of local actualities in Guangzhou.
Article 2 Entrusted by the Guangdong Financial Supervisory Authority, the Guangzhou Municipal Local Financial Supervision and Administration Bureau is in charge of supervising, managing and dealing with risks related to financing guarantee companies in Guangzhou. The Guangzhou Municipal Development and Reform Commission, Guangzhou Municipal Industry and Information Technology Bureau, Guangzhou Municipal Administration for Market Regulation, Guangzhou Municipal Finance Bureau, Guangzhou Municipal State-Owned Assets Supervision and Administration Commission, and other relevant authorities shall duly perform their respective duties in promoting the development of the financing guarantee industry in the city.
Article 3 Each district government shall assume the responsibility for responding to emergencies and maintaining stability within their respective jurisdictions, co-ordinate the provision of professional regulatory resources for financial authorities under its jurisdiction, and cooperate with the Guangzhou Municipal Local Financial Supervision and Administration Bureau to supervise and regulate financing guarantee companies in its jurisdiction.
Entrusted by the GuangdongFinancial Supervisory Authority, the Nansha District Financial Work Bureau will independently carry out work on approvals, filing and supervision for financing guarantee companies or branches established within the Pilot Free Trade Zone Nansha Area of Guangzhou.
Chapter 2 Establishment, Alteration and Exit
Article 4 The establishment of a financing guarantee company shall be approved by regulatory authorities. The Guangzhou Municipal Local Financial Supervision and Administration Bureau will establish an entry audit mechanism for financing guarantee companies in the city and carry out entry audits in accordance with the law.
Article 5 The initiation and establishment of a financing guarantee company shall comply with national laws, regulations and relevant requirements. Such companies should have professional management personnel and fixed business premises, form a sustainable business model, and serve the development needs of inclusive finance. The sponsor shareholders shall have a clear equity relationship, the company shall have a clear owner, and funds should be from legitimate sources, and meet the relevant prudential regulations stipulated by superior regulatory authorities.
Article 6 The merger or division of a financing guarantee company, or a reduction in its registered capital, requires approval from the Guangzhou Municipal Local Financial Supervision and Administration Bureau. A financing guarantee company that has undergone a merger, division or reduction in registered capital must satisfy the requirements applicable to a newly established financing guarantee company.
Article 7 If a financing guarantee company undergoes any of the following changes, it shall go through the filing procedures with the Guangzhou Municipal Local Financial Supervision and Administration Bureau within 30 days from the date that such changes are registered:
7.1.Establishment of branches within the jurisdiction of Guangzhou;
7.2.Change in its name, business premises or scope of business activities;
7.3.Increase in its registered capital;
7.4.Change in shareholders holding more than 5% of equity;
7.5.Change in its directors, supervisors or senior managers.
Article 8 If a financing guarantee company meets one of the following conditions, it may terminate its business and apply to exit from the financing guarantee market:
8.1.It has been relieved of all existing financing guarantee liabilities and has cleared off all remaining financing guarantees;
8.2.Although there is a small amount of existing financing guarantees, all parties concerned have signed and implemented a scheme for the disposition of creditor’s rights and debts.
A financing guarantee company that voluntarily applies to exit the market shall submit a market exit report to the Guangzhou Municipal Local Financial Supervision and Administration Bureau.
Article 9 A financing guarantee company shall be mandatorily required to exit the market under any of the following circumstances:
9.1.As prescribed by Article 19 of Order No. 149 of the Guangdong Provincial People’s Government, where a financing guarantee company and its branches fail to commence business operations for more than six months from the date its establishment was approved without any proper reason, or fail to operate a financing guarantee business for more than six consecutive months after its establishment;
9.2.As prescribed by the relevant provisions of Article 21 of Order No. 149 of the Guangdong Provincial People’s Government, where a financing guarantee company has committed a major violation of the law in its commercial operations;
9.3.As prescribed by Article 24 of Order No. 149 of the Guangdong Provincial People’s Government, where a financing guarantee company is dissolved, subject to deregistration, or bankrupt.
Article 10 In case of exit from the market in accordance with Articles 8 and 9, the Guangzhou Municipal Local Financial Supervision and Administration Bureau shall withdraw the Business License for Financing Guarantee Activities after putting forward opinions on handling the exit in accordance with relevant laws and regulations. The Bureau will make an announcement on its official public website, and at the same time inform market regulatory authorities in writing.
When a financing guarantee company is dissolved, a liquidation group shall be established according to law to conduct liquidation, and clear arrangements shall be made for the undertaking of financing guarantee liabilities that have yet to come due. The liquidation process shall be subject to supervision by relevant supervision and administration authorities.
The financing guarantee company shall, within the prescribed time limit, timely complete procedures for change of name and scope of business activities in its business license with market regulatory authorities (removal of words like “Financing Guarantee”) or cancel the registration of the company.
Chapter 3 Supervision and Administration
Article 11 Financing guarantee companies shall be mainly supervised by regulatory agencies, with a greater focus on behavior supervision, through simultaneous adoption of off-site supervision and on-site inspection. Routine supervision will be oriented towards risk control, focus on the quality of guaranteed assets and the use of self-owned funds. Implementation of categorized supervision and administration shall be explored.
Article 12 A local financial risk prevention and control information platform shall be established to strengthen the use of information technology in the supervision of financing guarantees. The application of artificial intelligence, blockchain, cloud computing, big data and other technologies in the regulatory platform will be promoted to collect regulatory information, compile industry statistics and conduct risk monitoring and early warning through the regulatory platform, and realize the interconnectivity and sharing of information among relevant authorities.
Article 13 A financing guarantee company shall regularly submit relevant materials to the Guangzhou Municipal Local Financial Supervision and Administration Bureau through the off-site supervision system. It shall submit the monthly report for the previous month before the 10thof each month, the quarterly report for the previous quarter before the 15thof the first month of each quarter, and the annual report for the previous year before January 15thof each year. The legal representative of the financing guarantee company shall be responsible for the authenticity and accuracy of the data in the reports. The Guangzhou Municipal Local Financial Supervision and Administration Bureau will analyze and evaluate the risk status of financing guarantee companies through off-site supervision.
Article 14 A financing guarantee company shall make a report to the Guangzhou Municipal Local Financial Supervision and Administration Bureau within 24 hours after the occurrence of a major risk event, and also inform local financial authorities of the event. Major risk events mainly include the following:
14.1.Mass incidents caused by financing guarantee companies;
14.2.Guarantee fraud occurs in a financing guarantee company with the amount of guarantee compensation or investment loss possibly exceeding 5% of its net assets;
14.3.Major debt obligations due to a financing guarantee company have not been paid off at maturity, resulting in liquidity difficulties for the company or its inability to pay off debts that are due;
14.4.The main assets of a financing guarantee company have been seized, confiscated or frozen;
14.5.A financing guarantee company has been placed under investigation by administrative and judicial organs for suspected violation of laws or regulations;
14.6.The main investors of a financing guarantee company have made false capital contributions or withdrawn capital contributions, or the main investors have caused other substantial adverse effects on the company;
14.7.More than half of the members of the board of directors or supervisors or the management of a financing guarantee company have resigned within three months;
14.8.The principal officer of a financing guarantee company is missing or has suffered an unnatural death, or is subject to mandatory measures by a judicial organ according to law;
14.9.Directors, supervisors or senior managers of a financing guarantee company are involved in serious violations of laws or regulations;
14.10.Other major risk events.
Article 15 In principle, the Guangzhou Municipal Local Financial Supervision and Administration Bureau will organize a comprehensive on-site inspection of financing guarantee companies in Guangzhou once a year, and professional private intermediary institutions such as accounting firms will be engaged to participate in on-site inspections. Based on regulatory needs, the Guangzhou Municipal Local Financial Supervision and Administration Bureau may carry out special inspections on financing guarantee companies. District financial authorities should cooperate in such efforts.
During on-site inspections, there should be no less than 2 inspectors. An inspection notice and relevant credentials shall be presented to a financing guarantee company before an inspection. The financing guarantee company shall actively cooperate with the on-site inspection, and truthfully provide all relevant documents per the requirements of the inspection team. Relevant persons in charge should be present during inspections.
Article 16 Financing guarantee companies in Guangzhou are encouraged to join industry self-regulation organizations such as the Guangzhou Financing Guarantee Association. The Guangzhou Financing Guarantee Association shall perform its duties in industry self-regulation, rights protection, and services in accordance with laws and regulations as well as its articles of association, and accept guidance from the Guangzhou Municipal Local Financial Supervision and Administration Bureau.
Article 17 A financing guarantee company shall abide by the following code of conduct in the course of its operations:
17.1.Fully disclose information, strictly perform obligations of faithful disclosure and explanation, eliminate information asymmetry, and ensure the fairness of contracts and transactions;
17.2.Protect clients’ financial information and strictly prevent the disclosure of such information;
17.3.Follow proper procedures in debt collection;
17.4.Misleading sales tactics, fraud and other behavior that are harmful to the interests of consumers are prohibited.
Article 18 The 12345 government service hotline, reception halls, complaint hotlines, e-mail and other relevant channels shall facilitate the protection of legitimate consumer rights in the financing guarantee industry. Consumer complaints shall be properly handled in accordance with the law. For real-name tip-offs with relevant evidence provided, the Guangzhou Municipal Local Financial Supervision and Administration Bureau shall handle the matter and inform the informant of such in writing. District financial authorities shall be responsible for the mediation of consumer disputes pertaining to financing guarantees within their respective jurisdictions.
Article 19 Credit records of financing guarantee companies and their employees shall be established. Relevant credit information shall be collected and stored in Guangzhou’s public credit information service platform according to law, so as to facilitate the interconnectivity with basic financial credit information databases.
Chapter 4 Risk Prevention
Article 20 Financing guarantee companies shall strictly abide by the scope of business activities specified in the Regulations on the Supervision and Administration of Financing Guarantee Companies in carrying out financing guarantee activities, and may not operate beyond the scope. A financing guarantee company with stable operations and sound finances may concurrently engage in non-financing guarantee businesses such as bid guarantees, project performance guarantees and litigation preservation guarantees, as well as consulting services related to guarantees.
Financing guarantee companies and their branches shall not receive deposits or receive deposits under disguised pretexts, make proprietary loans, or engage in entrusted loans, entrusted investments or other activities in violation of state regulations.
Article 21 Financing guarantee companies shall bear the primary responsibility for risk events in their business activities, and shall establish and strictly abide by the operating rules and management systems for risk management, internal controls, asset quality, risk preparedness and related party transactions, so as to hold the first line of defense in the prevention and resolution of risks. When a risk event occurs, they shall take corresponding measures immediately, make a timely report to the Guangzhou Municipal Local Financial Supervision and Administration Bureau, and inform district financial authorities.
Article 22 The Guangzhou Municipal Local Financial Supervision and Administration Bureau shall assume the responsibility of routine supervision on financing guarantee companies in Guangzhou as well as risk response, and properly resolve individual, local and structural risks, so as to prevent the occurrence of regional systemic risks. District-level people’s governments are responsible for local emergency response and the maintenance of stability, and shall perform the duties of prevention and disposition of illegal fund-raising under its jurisdiction.
Article 23 The Guangzhou Municipal Local Financial Supervision and Administration Bureau shall establish an emergency management mechanism for major risk emergencies, enact systems for discovering, reporting and handling emergencies in the financing guarantee industry, as well as plans for handling emergencies in the financing guarantee industry. The Bureau will specify the competent authorities and their responsibilities, disposal measures and procedures, and timely and effectively respond to emergencies in the financing guarantee industry.
Article 24 Upon receipt of a risk incident report, the Guangzhou Municipal Local Financial Supervision and Administration Bureau shall immediately judge and assess risks. Based on regulatory needs, the Bureau has the right to require the provision of special information from the financing guarantee company, or arrange talks with its directors, supervisors or senior managers and require them to explain the relevant situation and problems and make necessary rectifications.
Article 25 The Guangzhou Municipal Local Financial Supervision and Administration Bureau shall, in accordance with relevant regulations, report a violation or risk pertaining to any financing guarantee company under its jurisdiction to the Guangdong Financial Supervisory Authority and the Guangzhou Municipal People’s Government, and refer the matter in accordance with law to the Guangdong Financial Supervisory Authority for their action and imposition of penalties. If necessary, banking and financial institutions and creditors can be notified.
Article 26 Without the approval of Guangzhou regulatory authorities, words like “Financing Guarantee” shall not appear in a company’s name and the scope of its business activities, nor may the company de facto engage in financing guarantee operations. The Guangzhou Municipal Local Financial Supervision and Administration Bureau, market regulatory authorities, taxation authorities and other relevant authorities shall work together with district governments in accordance with their respective duties to clean up, rectify, ban and regulate the abovementioned illegal financing guarantee institutions and illegal financing guarantee operations.
Chapter 5 Service and Development
Article 27 The establishment of a two-level government financing guarantee system in urban areas will be promoted to develop government-supported financing guarantee companies. Mechanisms for cooperation among the government, financial institutions and financing guarantee companies will be established to expand the scale of financing guarantees available for small and micro enterprises, individual industrial and commercial proprietors and agriculture, rural areas and farmers, while ensuring fee rates remain low. Private financing guarantee companies are encouraged to engage in policy financing guarantee operations.
Article 28 For financing guarantee operations serving small and micro enterprises, individual industrial and commercial proprietors, agriculture, rural areas and farmers, and other inclusive sectors, support shall be provided to them through comprehensive use of guarantee fee subsidies, capital investment, incremental business incentives, compensation for compensatory losses, and other measures. For newly established district-level government financing guarantee institutions, the Guangzhou Municipal Finance Bureau shall allocate new funds to offer capital investment support at a proportion of no more than 40% of the funds disbursed by district-level finance authorities. Financing guarantee companies are encouraged to increase capital and equity. Corresponding one-time incentives will be given in accordance with the prevailing incentive policy of the Guangzhou Municipal People’s Government on new paid-in capital of financing guarantee companies. Senior executives of financing guarantee companies shall be included in the city’s financial talent support projects and enjoy relevant policy support.
Article 29 The establishment of mechanisms for cooperation and risk-sharing between the banking industry and guarantee industry will be promoted. Financing guarantee companies and banking and financial institutions shall follow the principles of voluntariness, equality, fairness, integrity, compliance and prudence in business cooperation and define reasonable risk sharing ratios and responsibilities. Policy re-guarantee should be used to provide favorable conditions, such as risk sharing and controlling the upward fluctuation of loan interest rate, based on market principles for financing guarantee companies included in the re-guarantee system. All districts are encouraged to establish a financing guarantee risk compensation fund pool.
Article 30 The business environment will be optimized by improving the quality and efficiency of relevant government services for financing guarantee companies. National policies on preferential value-added taxes for financing guarantee and re-guarantee business activities will be implemented. Policies on pre-tax deduction of reserves will be implemented for qualified financing guarantee companies. Local financial regulatory authorities and the People’s Bank of China shall establish a cooperation mechanism to jointly promote the access of qualified financing guarantee companies to the credit reference system of the People’s Bank of China. Qualified financing guarantee companies will be supported in access to the Guangzhou public credit information service platform.
Article 31 Innovative pilots will be carried out in Guangzhou Civil Financial Street to encourage the establishment of characteristic financing guarantee companies serving small and micro enterprises, individual industrial and commercial proprietors, agriculture, rural areas and farmers, and other inclusive sectors. Financial authorities of Yuexiu District shall be responsible for supervision on financing guarantee companies in Guangzhou Civil Financial Street and risk response in accordance with these Measures.
Chapter 6 Supplementary Provisions
Article 32 These Measures shall come into force from the date of issuance and remain valid for a period of 3 years. During the course of implementation, the provisions of new laws, regulations, rules or relevant policies of higher-level authorities shall prevail in the event of any inconsistency.
Mode of disclosure: Active Disclosure
Issued by the General Office of the Guangzhou Municipal Local Financial Supervision and Administration Bureau on September 1, 2020