BEIJING, March 19 (Xinhua) -- The National Administration of Financial Regulation (NAFR), China's financial regulator, released its amended rules on consumer finance companies to reinforce related regulation and foster development of the industry, reported Xinhua Finance on Monday.
NAFR raised access thresholds, enhanced regulation and supervision over classified businesses of consumer finance companies and related corporate governance, and strengthened risk management and consumer rights and interest protection in the revised rules.
Effective as from April 18, the new rules on consumer finance companies heighten requirements over major capital providers' assets, annual revenues and minimum ratio of equity holdings in the consumer finance companies to be established.
The revised rules also elevate the minimum amount of required registered capital in a bid to shore up risk resilience of consumer finance companies.
In the new rules, requiring no less than 50 percent of equity holdings by the major capital provider of a new consumer finance company is helpful to improve shareholders' participation in corporate operation and efficiency of corporate decision-making.
By separating basic business from specialized business and canceling non-major and unnecessary businesses, the rules optimize business scope dividing for consumer finance companies to tighten related regulation.
The rules also define regulatory requirements over credit risk, liquidity risk, operation risk, IT risk, and reputation risk, add certain regulatory indicators and enrich market exit mechanisms to enhance risk management of consumer finance companies.
(Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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