In line with the directives from the Central Financial Work Conference, China's National Financial Regulatory Administration (NFRA) has issued the revised Regulation on Financial Leasing Companies(hereafter referred to as the Regulation). The amendments aim to strengthen the supervision of financial leasing companies, mitigate financial risks, optimize financial services, and promote the high-quality development of the real economy.

The Regulation consists of nine chapters, with the following key revisions:

Investor Requirements: The revision raises the minimum registered capital for financial leasing companies, enhancing their risk resilience. It also adds three new categories of principal investors, including state-owned capital investment companies, state-owned financial capital companies, and overseas manufacturing firms. Additionally, it raises the entry requirements for key investors, such as total assets, revenues, registered capital, and the minimum shareholding ratio.

Business Supervision: The Regulation clarifies the scope of both basic and specialized business activities, categorizing them based on risk levels and required professional expertise. Non-essential and non-core business activities have been removed, with strict supervision measures for business classifications.

Corporate Governance: The Regulation fully implements recent supervisory standards regarding corporate governance, shareholder responsibilities, related-party transactions, and information disclosure. It also further clarifies the regulatory requirements for Party building within companies, executive compensation, and stakeholder obligations.

Risk Management: The revised rules set clear guidelines for capital adequacy, credit risk, liquidity risk, operational risk, and major related-party transactions. Additionally, certain regulatory indicators have been optimized, and requirements for regulatory ratings and mandatory measures have been clarified.

International Leasing Operations: The Regulation provides clear operational rules for foreign-related leasing activities, specifying how financial leasing companies should establish project management companies abroad to handle specialized operations.

Operational Guidelines: The revisions also address weaknesses in the operational management of financial leasing companies, supplementing rules for the transfer of leasing assets, joint leasing arrangements, fixed-income investments, factoring financing, cooperation with partner institutions, and consumer protection.

The updated Regulation represents a significant step toward enhancing financial supervision, risk prevention, and refining the role of financial institutions. The NFRA will continue to enforce these regulations while guiding financial leasing companies in maintaining their core function of integrating financing with leasing. By doing so, financial leasing firms will help drive the upgrade of large-scale equipment, improve industrial and supply chain resilience, and support the high-quality development of the real economy.