Tentative Measures for the Administration of Financing Guarantee Companies

Tentative Measures for the Administration of Financing Guarantee Companies

Order of the China Banking Regulatory Commission, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Commerce, the People's Bank of China and the State Administration for Industry & Commerce [2010] No. 3

March 8, 2010

For the purposes of strengthening the supervision and administration of the financing guarantee companies, regulating financing guarantee business, and promoting the sound development of the financing guarantee industry, the Tentative Measures for the Administration of Financing Guarantee Companies have been formulated in accordance with the Company Law of the People's Republic of China, the Security Law of the People's Republic of China, and the Contract Law of the People's Republic of China, by the China Banking Regulatory Commission, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Commerce, the People's Bank of China, and the State Administration for Industry & Commerce jointly and are hereby promulgated upon the approval by the State Council and shall come into force as of the date of promulgation.

Chairman of the China Banking Regulatory Commission: Liu Mingkang
Minister of the National Development and Reform Commission: Zhang Ping
Minister of the Ministry of Industry and Information Technology: Li Yizhong
Minister of the Ministry of Finance: Xie Xuren
Minister of the Ministry of Commerce: Chen Deming
Governor of the People's Bank of China: Zhou Xiaochuan
Director General of the State Administration for Industry & Commerce: Zhou Bohua

Tentative Measures for the Administration of Financing Guarantee Companies

Chapter I General Provisions
　
Article 1 For the purposes of strengthening the supervision and administration of the financing guarantee companies, regulating financing guarantee business, and promoting the sound development of the financing guarantee industry, these Measures are formulated in accordance with the Company Law of the People's Republic of China, the Security Law of the People's Republic of China, and the Contract Law of the People's Republic of China.
　
Article 2 For the purposes of these Measures, the "financing guarantee" shall mean the practice in which a guarantor concludes an agreement with a creditor, including a banking financial institution, and the guarantor assumes the guarantee liabilities as agreed on in the agreement in accordance with law if the guaranteed party fails to perform its financing obligations to the creditor.
For the purposes of these Measures, a "financing guarantee company" shall mean a limited liability company or joint stock company that provides financing guarantee.
For the purposes of these Measures, the "regulatory departments" shall mean the government departments as determined by the people's government of the provinces, autonomous regions, or municipalities directly under the Central Government to exercise the supervision and administration of the financing guarantee companies under their jurisdiction.
　
Article 3 A financing guarantee company shall follow the principles of security, liquidity, and profitability, and shall establish a sustainable business pattern featuring prudential operation according to market principles.
A financing guarantee company shall follow the good faith principle and abide by the contract in the business transactions with customers, such as enterprises and banking financial institutions.
　
Article 4 The business operations legally conducted by a financing guarantee company shall not be interfered with by any government bodies, entities, or individuals.
　
Article 5 The business operations conducted by a financing guarantee company shall comply with laws, administrative regulations, and these Measures, and shall not harm the State interests or public interests.
A financing guarantee company shall properly keep the secrets of its customers, and shall not use the information provided by a customer for the purpose of engaging in any activity that is unrelated to the guarantee business with such customer or harms the interests of such customer.
　
Article 6 A financing guarantee company shall follow the principle of fair competition in the process of providing financing guarantee, and shall not engage in illicit competition.
　
Article 7 The financing guarantee companies shall be subject to the supervision and administration under the jurisdiction of the people's government of the provinces, autonomous regions, or municipalities directly under the Central Government. The regulatory department as determined by the people's government of local provinces, autonomous regions, or municipalities directly under the Central Government shall take charge of the approval, market access, and withdrawal of financing guarantee companies under its jurisdiction as well as relevant normal supervision and risk management, and give reports at the Inter-ministerial Conference for the Regulation of Financing Guarantee as established by the State Council.

Chapter II Establishment, Alteration, and Termination of a Financing Guarantee Company
　
Article 8 The establishment of a financing guarantee company or a branch thereof shall be subject to the examination and approval by the competent regulatory department.
The competent regulatory department shall, after approving the establishment of a financing guarantee company or a branch thereof, issue the business certificate to such company or branch, and such company or branch thereof shall apply to the competent administrative department for industry and commerce for registration on the strength of the business certificate.
No entity or individual may engage in financing guarantee without prior approval by the competent regulatory department or use the expressions "financing guarantee" in its name or the name of its enterprise, unless otherwise provided by laws and administrative regulations.
　
Article 9 A company to be established to provide financing guarantee service shall:
1.
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