In order to regulate the business behavior of commercial factoring enterprises, strengthen supervision and management, consolidate regulatory responsibilities, prevent and resolve risks, and promote the healthy development of the commercial factoring industry, the China Banking and Insurance Regulatory Commission has recently issued the "Notice on Strengthening the Supervision and Management of Commercial Factoring Enterprises" (hereinafter referred to as "Notice").
1. What is the background of the formulation of the "Notice"?
In 2009, the Ministry of Commerce and other units issued the "Opinions on Promoting the Healthy Development of Commercial Credit Sales" (Shang Zhifa [2009] No. 88), proposing "to carry out a pilot commercial factoring business to promote the circulation of accounts receivable". In 2012, the Ministry of Commerce issued the "Notice on the Work Related to the Pilot Commercial Factoring" (Shang Zihan [2012] No. 419) and the "Reply to the Implementation Plan for the Pilot Commercial Factoring" (Shang Zi Han [2012] No. 919) ), to carry out commercial factoring pilot projects in Tianjin Binhai New Area and Shanghai Pudong New Area. In 2013, the Ministry of Commerce issued the "Reply on Issues Concerning the Implementation of Commercial Factoring Pilots in Chongqing Liangjiang New District, Southern Jiangsu Modernization Demonstration Zone, and Suzhou Industrial Park" (Shang Zi Han [2013] No. 680), adding three new pilots area. After the reform of the commercial system, the Qianhai area of Shenzhen regarded commercial factoring enterprises as general industrial and commercial enterprises directly registered, and some non-pilot areas also began to establish commercial factoring enterprises. After the 2017 National Financial Work Conference, cybersquatting occurred in some provinces and cities, and the number of commercial factoring companies experienced explosive growth.
According to investigation statistics, as of the end of June 2019, there were 12,081 registered commercial factoring companies nationwide, an increase of 4222 and 540 from the beginning of 2018 and 2019 respectively; the registered capital of the whole industry was 848.7 billion yuan, an increase of 111.7 billion from the beginning of 2018 and 2019 respectively. Yuan and 45.7 billion yuan.
2. What specific regulatory indicators does the "Notice" put forward for commercial factoring companies ? What are the main considerations?
The “Notice” states that commercial factoring companies shall comply with the following regulatory requirements: the accounts receivable of the same debtor shall not exceed 50% of the total risk assets; the accounts receivable of the transferee with its affiliated company as the debtor shall not exceed 50% 40% of total risk assets; the 90 days past due uncollected or unrealized factoring financing models included in non-performing assets management; risk reserve provision shall not be less than 1% of the factoring financing balance at the end; risk assets shall not exceed the net assets of 10 times.
The "Notice" regulates concentration, related transactions, classification of non-performing assets, provisioning and leverage ratios, etc. , mainly to prevent commercial factoring companies from operating risks and spillover risks. First, the "notice" the continuation of the Ministry of Commerce of risk assets may not exceed 10 times the required net assets of debt levels commercial factoring companies to be appropriate restrictions. Secondly, as a financial business enterprise, it is necessary to reasonably control the concentration of customers and the scale of related-party transactions, strict asset classification, adequate provisions, and prudent and stable operations. In addition, considering that there are a large number of commercial factoring companies established by enterprise groups in practice, and the proportion of customer concentration and related transactions is relatively large, the "Notice" uses risky assets as the denominator for the calculation of related indicators.
3. How to classify and dispose of existing commercial factoring companies?
The "Notice" requires that commercial factoring companies be classified into three categories: normal operations, abnormal operations, and illegal operations in accordance with operating risks and violations of laws and regulations, and that existing companies shall be classified and disposed of in an orderly manner.
First, the acceptance of and with supervision, a place of business and log in "factoring business information management system" or local financial regulatory authorities designated information system complete reporting normal operations of enterprises in the registration information, the local Financial Supervisory Authority filing a report with silver CIRC Afterwards, they will be publicized in batches, included in the supervision list, and supervised in accordance with laws and regulations. The second is to supervise and urge the rectification of abnormal operations and illegal operations , and the local financial supervision bureaus can be included in the supervision list if they pass the rectification inspection . Third, for abnormal business enterprises that refuse to rectify or fail to pass the rectification inspection, the local financial supervision bureau will coordinate the market supervision department to include them in the abnormal business list, and persuade them to apply for changes in the company name and business scope, voluntarily cancel or revoke their business licenses according to law . Fourth , the local financial supervision bureau will punish or ban enterprises that are unqualified in the rectification and acceptance inspection or have serious violations of laws and regulations , and the suspected crimes will be promptly transferred to the public security agency for investigation and punishment.
4. What other contents are stipulated in the "Notice"?
The "Notice" also made provisions on market access, supervision and management measures, supervision and management responsibilities, and optimization of the business environment.
In terms of market access, there are currently too many commercial factoring companies with mixed good and bad. The current focus should be on digesting the stock, rectifying chaos, and standardizing order; in principle, the registration of commercial factoring companies should be suspended before the market access management measures are issued; If a new establishment is really necessary, the local financial supervision bureau shall establish a consultation mechanism with the market supervision department to form a consensus . At the same time, taking into account the demands of market entities and free trade pilot zones to establish commercial factoring enterprises, the "Notice" allows market entities to enter the commercial factoring industry by transferring existing corporate equity, and allows commercial factoring enterprises to operate in provinces (regions, regions, and regions). City) moved to the free trade experimental zone. In terms of supervision and management measures , local financial regulatory agencies are given off-site monitoring and on-site inspections, and other regulatory methods are established to establish a reporting system for major issues; local financial regulatory agencies can also adopt window guidance, increase the frequency of information reporting, and urge the development of independent Supervisory measures such as investigation, making risk warnings and notifications, and conducting supervisory interviews. Regarding supervision and management responsibilities , clarify the supervision responsibilities of the China Banking and Insurance Regulatory Commission and local governments, establish a hierarchical supervision and full-time supervisor system, and improve the cross-departmental and cross-regional supervisory coordination mechanism. In terms of optimizing the business environment, we will guide and support the development of commercial factoring companies in terms of risk compensation, rewards, interest discount policies, cooperation with banking and insurance institutions, and industry self-discipline, so as to better provide services for small, medium and micro enterprises.
Reprinted source: General Office of China Banking and Insurance Regulatory Commission