Four Sets of Rules for Financing Guarantee Issued

Recently, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Notice on Issuing Four Sets of Rules in Support of the Regulation on the Supervision and Administration of Financing Guarantee Companies (No.1 [2018], CBIRC). The CBIRC has, in conjunction with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Agriculture and Rural Affairs, the People's Bank of China, the State Administration for Market Regulation, and other members of the Inter-Ministerial Joint Meeting on Financing Guarantee Business Supervision, developed the Measures for the Administration of Financing Guarantee Business Permits, the Measures for the Measurement of Balances of Financing Guarantee Liabilities, the Measures for the Administration of the Asset Proportions of Financing Guarantee Companies, and the Guidelines for the Business Cooperation between Banking Financial Institutions and Financing Guarantee Companies.
The Measures for the Administration of Financing Guarantee Business Permits aim to lay down rules for the regulators' administration of financing guarantee business permits, promote the compliance of financing guarantee companies, and maintain the order of the financing guarantee market. The Measures for the Measurement of Balances of Financing Guarantee Liabilities aim to regulate the operations of financing guarantee companies, prevent risks in financing guarantee business, and precisely measure the balances of financing guarantee liabilities. The Measures for the Administration of the Asset Proportions of Financing Guarantee Companies aim to direct financing guarantee companies to focus on their main business and operate prudentially, ensure that financing guarantee companies maintain adequate capacities to repay debts on behalf of debtors, and give priority to protect the liquidity and safety of assets. The Guidelines for the Business Cooperation between Banking Financial Institutions and Financing Guarantee Companies aim to regulate the business cooperation between banking financial institutions and financial guarantee companies (“bank-guarantee cooperation”), maintain the legitimate interests of both parties, promote the sound development of bank-guarantee cooperation, and better serve the development of micro and small enterprises and “agriculture, rural areas, and farmers.”