Measures for the Administration of Consumer Financial Companies (Decree No. 4 [2024] of the State Administration of Financial Supervision and Administration)

Measures for the Administration of Consumer Financial Companies (Decree No. 4 [2024] of the State Administration of Financial Supervision and Administration)

　　(The Measures for the Administration of Consumer Financial Companies were deliberated and approved by the State Administration of Financial Supervision and Administration at the 4th meeting of 2023 on December 4, 2023.) It is hereby promulgated and shall come into force on April 18, 2024. )

Measures for the Administration of Consumer Finance Companies

　　Chapter I: General Provisions

　　Article 1 These Measures are formulated in accordance with the Company Law of the People's Republic of China, the Banking Supervision Law of the People's Republic of China and other laws and regulations, so as to strengthen the supervision and management of consumer financial companies and promote the standardized operation and high-quality development of consumer financial companies.

　　Article 2 The term "consumer finance company" as used in these Measures refers to a non-bank financial institution established with the approval of the State Administration of Financial Supervision and Administration, which does not absorb deposits from the public and provides consumer loans to individuals within the territory of China on the principle of small amounts and dispersion.

　　Article 3 The term "consumer loan" in these measures refers to the loan issued by the consumer finance company to the borrower for the purpose of consumption (excluding the purchase of housing and automobiles).

　　Article 4 The name of a consumer finance company shall be marked with the words "consumer finance". Without the approval of the State Administration of Financial Supervision and Administration, no institution may use the word "consumer finance" in its name.

　　Article 5 The State Administration of Financial Supervision and Administration and its dispatched agencies shall supervise and administer consumer financial companies in accordance with law.

　　Chapter II: Establishment and Alteration

　　Article 6 An application for the establishment of a consumer finance company shall meet the following conditions:

　　(1) Have articles of association that comply with the Company Law of the People's Republic of China and the provisions of the State Administration of Financial Supervision and Administration;

　　(2) There are major investors and general investors who meet the prescribed conditions;

　　(3) The registered capital shall be a one-time paid-in monetary capital, with a minimum limit of RMB 1 billion or the equivalent in freely convertible currency;

　　(4) There are directors, senior managers and qualified practitioners who are familiar with consumer finance business who meet the qualifications, and at least one person with more than 3 years of relevant financial experience in key positions such as risk management, financial management, and credit management;

　　(5) Establish an effective corporate governance, internal control and risk management system;

　　(6) Establish an information technology architecture that is compatible with business operations and regulatory requirements, have the necessary, secure and compliant information systems to support business operations, and have the technology and measures to ensure business continuity;

　　(7) Have business premises, safety precautions and other facilities suitable for business operations;

　　(8) Other prudential conditions stipulated in the rules and regulations of the State Administration of Financial Supervision and Administration.

　　Article 7 The investors of a consumer finance company shall be an enterprise legal person established in accordance with law within or outside the territory of China, and shall be divided into major investors and general investors. The main investor refers to the investor whose capital contribution is not less than 50% of the total share capital of the proposed consumer finance company, and must be a domestic or foreign financial institution or a domestic non-financial enterprise whose main business is to provide products suitable for consumer loan business, and the general investor refers to other investors other than the main investor.

　　Article 8 As the main investor of a consumer finance company, a financial institution shall meet the following conditions:

　　(1) Have more than 5 years of business experience in the field of consumer finance;

　　(2) The total assets at the end of the most recent fiscal year shall not be less than RMB 500 billion or its equivalent in freely convertible currency;

　　(3) Have a good financial position and have made profits in the last two fiscal years;

　　(4) Have a good reputation and have no major violations of laws and regulations in the last 2 years;

　　(5) The capital invested in the shares shall be its own funds, and shall not be invested in non-own funds such as entrusted funds and debt funds;

　　(6) In principle, the balance of equity investment shall not exceed 50% of the net assets of the enterprise (including the amount of this investment), except for investment companies and holding companies specified by the State Council;

　　(7) Have a good corporate governance structure, a sound risk management system and an internal control mechanism;

　　(8) Good regulatory rating;

　　(9) To meet the prudential regulatory requirements of the regulatory authorities of the country or region where they are located;

　　(10) The foreign financial institution shall have sufficient analysis and research on the Chinese market, and the financial regulatory authority of the country or region where it is located has established a good supervision and management cooperation mechanism with the State Administration of Financial Supervision and Administration;

　　(11) Other prudential conditions stipulated in the rules and regulations of the State Administration of Financial Supervision and Administration.

　　As a general investor of a consumer finance company, a financial institution shall, in addition to meeting the requirements of items (3) to (9) of the preceding paragraph, have a registered capital of not less than RMB 1 billion or its equivalent in freely convertible currency.

　　The requirements for the financial indicators involved in the preceding paragraph are all consolidated accounting statements.

　　Article 9 A non-financial enterprise, as the main investor of a consumer finance company, shall meet the following requirements:

　　(1) The operating income of the most recent fiscal year shall not be less than RMB 60 billion or the equivalent in freely convertible currency;

　　(2) The net assets at the end of the most recent fiscal year shall not be less than 40% of the total assets;

　　(3) Be in good financial condition and have made profits in the last three fiscal years;

　　(4) Have a good reputation and have no major violations of laws and regulations in the last 2 years;

　　(5) The capital invested in the shares shall be its own funds, and shall not be invested in non-own funds such as entrusted funds and debt funds;

　　(6) In principle, the balance of equity investment shall not exceed 40% of the net assets of the enterprise (including the amount of this investment), except for investment companies and holding companies specified by the State Council;

　　(7) Other prudential conditions stipulated in the rules and regulations of the State Administration of Financial Supervision and Administration.

　　In addition to the requirements set forth in items 4 and 5 of the preceding paragraph, non-financial enterprises that are general investors of consumer finance companies shall also meet the following requirements:

　　(1) The net assets at the end of the most recent fiscal year shall not be less than 30% of the total assets;

　　(2) Be in good financial condition and have been profitable for the last two fiscal years;

　　(3) In principle, the balance of equity investment shall not exceed 50% of the net assets of the enterprise (including the amount of this investment), except for investment companies and holding companies specified by the State Council.

　　The requirements for the financial indicators involved in the preceding paragraph are all consolidated accounting statements.

　　Article 10 A consumer finance company shall have at least one investor who has more than 5 years of experience in consumer finance business management and risk control, and whose capital contribution ratio is not less than one-third of the total share capital of the proposed consumer finance company.

　　Article 11 Where a consumer finance company makes any of the following changes, it shall report to the State Administration of Financial Supervision or Administration or its dispatched agency for approval:

　　(1) Change the name of the company;

　　(2) Change of registered capital;

　　(3) Changing equity or adjusting equity structure;

　　(4) Change the company's domicile or place of business;

　　(5) Amend the articles of association;

　　(6) Change of directors and senior management;

　　(7) Adjust the scope of operations;

　　(8) merger or division;

　　(9) Other changes stipulated by the State Administration of Financial Supervision and Administration.

　　Article 12 The administrative licensing procedures for the establishment, alteration, termination, adjustment of business scope and increase of business varieties and the approval of the qualifications of directors and senior management personnel of consumer finance companies shall be implemented in accordance with the relevant provisions of the State Administration of Financial Supervision and Administration.

　　Article 13 Where foreign exchange administration matters are involved in the establishment, alteration or business operation of a consumer finance company, it shall comply with the relevant provisions of the State on foreign exchange administration.

　　Chapter III Business Scope and Business Rules

　　Article 14 Consumer finance companies may conduct business nationwide.

　　Article 15 A consumer finance company may engage in some or all of the following RMB businesses:

　　(1) Issuing personal consumption loans;

　　(2) Accepting deposits from shareholders and their domestic subsidiaries, as well as the parent company of the group to which the shareholders belong and their domestic subsidiaries;

　　(3) borrowing money from domestic financial institutions;

　　(4) borrowing money from overseas financial institutions that are shareholders of the company;

　　(5) Issuing non-capital bonds;

　　(6) interbank lending;

　　(7) Consulting and agency services related to consumer finance;

　　(8) Other businesses approved by the State Administration of Financial Supervision and Administration.

　　Article 16 A consumer finance company that is in good business condition and meets the requirements may apply to the State Administration of Financial Supervision and Administration and its dispatched agencies to operate some or all of the following RMB business:

　　(1) Asset securitization business;

　　(2) fixed-income securities investment business;

　　(3) Other businesses approved by the State Administration of Financial Supervision and Administration.

　　The specific conditions and procedures for consumer finance companies to apply for the establishment of the businesses listed in the preceding paragraph shall be implemented in accordance with the relevant provisions of administrative licensing.

　　Article 17 Qualified consumer finance companies may apply for the issuance of capital instruments and shall meet the relevant qualification standards required by the regulatory authorities.

　　Article 18 When a consumer finance company grants a consumer loan to a borrower, it shall prudently assess the borrower's ability to repay, and the maximum credit line for the borrower shall not exceed RMB 200,000.

　　Article 19 Consumer finance companies shall establish a fraud risk prevention and control system, effectively identify fraudulent acts by improving anti-fraud models and related technical means, ensure the authenticity and effectiveness of borrowers' identity data and willingness to borrow, and ensure the safety of credit funds.

　　Article 20 Consumer finance companies shall follow the principle of market-oriented interest rates, establish a risk pricing mechanism for consumer loan interest rates, and reasonably determine the interest rate level of consumer loans in accordance with the principles of legal compliance, prudent operation, equality and voluntariness, fairness and good faith.

　　Article 21: Consumer finance companies carrying out internet lending business shall comply with the relevant laws, regulations, and regulatory provisions on internet lending.

　　Chapter IV: Corporate Governance

　　Article 22 A consumer finance company shall, in accordance with relevant laws, regulations and regulatory provisions, establish and improve a corporate governance structure, clarify the boundaries of responsibilities and performance requirements of each governance entity, and build a corporate governance mechanism with scientific decision-making, effective implementation and effective supervision in accordance with the principles of each performing its own duties, coordinated operation, and effective checks and balances.

　　Article 23 A state-owned consumer finance company shall write the requirements for Party building work into its articles of association, implement the legal status of Party organizations in the corporate governance structure, adhere to and improve the leadership system of "two-way entry and cross-posting", and integrate the Party's leadership into all aspects of corporate governance.

　　Private consumer finance companies shall, in accordance with the relevant provisions on the establishment of Party organizations, establish Party organizational structures, strengthen political guidance, build an advanced corporate culture, and promote the sustainable and healthy development of consumer finance companies.

　　Article 24 A consumer finance company shall establish and improve the relevant systems for the management of shareholders' equity, strengthen the management of shareholders' equity, and regulate the behavior of shareholders.

　　If there is a change in the controlling shareholder, actual controller, related party, person acting in concert or ultimate beneficiary of a consumer finance company, the consumer finance company shall promptly report to the dispatched agency of the State Financial Supervision and Administration in a timely manner.

　　Article 25 In addition to performing their shareholder obligations in accordance with relevant laws, regulations and regulatory provisions, shareholders of a consumer finance company shall also bear the following shareholder obligations:

　　(1) The major shareholder shall not transfer the equity held within 5 years from the date of acquisition of the equity, except for the circumstances where the State Administration of Financial Supervision and Administration approves the adoption of risk disposal measures, orders for transfer, judicial compulsory enforcement, or transfer of equity between different entities controlled by the same investor;

　　(2) The major shareholders shall replenish the capital of the consumer finance company when necessary, and provide liquidity support to the consumer finance company when it has liquidity difficulties;

　　(3) The major shareholder undertakes not to pledge the equity of the consumer finance company it holds or establish a trust;

　　(4) Major shareholders shall not abuse their shareholder rights to interfere with the decision-making power and management power of the board of directors and senior management, and shall not interfere with the operation and management of the consumer finance company beyond the board of directors and senior management, or damage the legitimate rights and interests of the consumer finance company and other shareholders;

　　(5) Major shareholders shall establish an effective risk isolation mechanism to prevent the contagion and transfer of risks among shareholders, consumer finance companies and other affiliated institutions;

　　(6) Shareholders and their actual controllers shall maintain the independent legal personality and operational autonomy of the consumer finance company, and shall not abuse the rights of shareholders to harm the legitimate rights and interests of the consumer finance company, other shareholders and stakeholders;

　　(7) Truthfully inform the consumer finance company of information such as financial information, shareholding structure, source of equity funds, controlling shareholder, actual controller, related party, person acting in concert, ultimate beneficiary, and investment in other financial institutions;

　　(8) Where there is a change in the controlling shareholder, actual controller, related party, person acting in concert, or ultimate beneficiary of a shareholder, the relevant shareholder shall, in accordance with laws, regulations and regulatory provisions, promptly notify the consumer finance company in writing of the change;

　　(9) In the event of a major case, major risk event or major violation of a consumer finance company, the shareholders shall cooperate with the financial regulatory authorities in carrying out investigation and risk disposal.

　　If a shareholder of a consumer finance company refuses to perform its shareholder obligations, the State Administration of Financial Supervision and Administration may take corresponding regulatory measures according to the circumstances.

　　Article 26 Consumer finance companies shall strengthen the establishment of the board of directors and establish and improve the evaluation system for directors' performance of duties. The board of directors shall establish special committees for auditing, risk management, and consumer rights protection, either separately or in combination.

　　The board of directors shall, at least annually, evaluate the qualifications of major shareholders, the fulfillment of commitments, the implementation of the articles of association or the terms of the agreement, and compliance with laws, regulations and regulatory provisions, and submit the evaluation report to the dispatched agency of the State Financial Supervision and Administration before April 30 of each year.

　　Article 27 A consumer finance company shall establish an independent director system, and the independent directors shall ensure that they have sufficient time and energy to effectively perform their duties and express objective and impartial independent opinions on the matters deliberated by the general meeting of shareholders or the board of directors.

　　Article 28 A consumer finance company shall clarify the scope and responsibilities of senior management personnel, standardize the performance of duties by senior management personnel, clearly define the relationship between the board of directors and senior management, and ensure that the division of responsibilities of senior management personnel is in accordance with the principles of appropriate decentralization and effective checks and balances.

　　Article 29 A consumer finance company shall establish a sound salary management system and set up a reasonable mechanism for deferred payment of performance-based remuneration and recourse clawback.

　　For senior managers of consumer finance companies and employees in positions with significant impact on risks, more than 40% of the performance-based remuneration shall be deferred, and the deferred payment period shall generally not be less than 3 years, of which the proportion of deferred payment of performance-based remuneration of key senior management personnel shall be higher than 50%.

　　Article 30 A consumer finance company shall formulate and improve a management system for related party transactions, and comprehensively and accurately identify related parties. Related-party transactions shall comply with laws, regulations and relevant regulatory provisions, and follow the principles of good faith, openness and fairness, penetrating identification, and clear structure.

　　Consumer finance companies shall conduct a special audit of related party transactions at least once a year, and submit the audit results to the dispatched agency of the State Administration of Financial Supervision and Administration before April 30 of each year.

　　Article 31 Consumer financial companies shall establish and improve an annual information disclosure system, and disclose to the public through official websites and other channels relevant information such as the company's basic information, financial accounting reports, risk management information, corporate governance information, information on major events, and information on consumer consultation and complaint channels before April 30 of each year.

　　Chapter 5 Internal Control and Risk Management

　　Article 32 A consumer finance company shall establish an internal control mechanism that conforms to its own operating characteristics, clarify the division of responsibilities between departments and positions, strengthen the establishment of systems, and improve operational procedures. Establish a good internal control culture, carry out internal control compliance evaluation and supervision, give full play to the role of internal control in business management and risk prevention and control, and ensure safe and stable operation.

　　Article 33: Consumer finance companies shall establish and improve compliance management systems, clarify the departments, positions, and corresponding authority specifically responsible for compliance management, formulate compliance management policies, optimize compliance management processes, and strengthen compliance culture and compliance training.

　　Article 34 A consumer finance company shall, in accordance with the relevant provisions of the State, establish and improve the company's financial and accounting systems, and shall follow prudent accounting principles and record and fully reflect its business activities and financial situation.

　　Article 35 A consumer finance company shall establish a comprehensive risk management system that matches the scale of assets, business characteristics and risk status, improve the risk governance structure, risk management policies and procedures adapted to the characteristics of the business, and effectively identify, measure, monitor and control all kinds of risks.

　　Article 36: Consumer finance companies shall establish and complete credit risk management systems and processes, increasing the level of refinement in risk management. Carry out risk classification of financial assets that bear credit risks, establish a prudent asset impairment loss provision system, and make provision for asset impairment losses in full and in a timely manner. If sufficient preparations are not made, profits shall not be distributed.

　　Article 37 A consumer finance company shall establish a liquidity risk management system commensurate with its own business scale, conduct liquidity stress tests on a regular basis, formulate and improve liquidity risk contingency plans, and promptly deal with potential liquidity risks.

　　Article 38 A consumer finance company shall establish a scientific operational risk management system based on business processes, personnel positions, information technology systems, outsourcing management, etc., formulate relevant systems to regulate employee behavior and ethics, strengthen employee behavior management and case risk prevention and control, and ensure effective identification, assessment, monitoring and control of operational risks.

　　Article 39: Consumer finance companies shall establish an information technology risk management system that matches the operation and management model of the information system, strengthen risk prevention and control in areas such as network security, business continuity, and service outsourcing, and ensure data security and the smooth and continuous operation of business systems.

　　Article 40: Consumer finance companies shall formulate and improve reputational risk monitoring mechanisms, emergency response plans, and handling measures, to proactively and effectively prevent reputational risks.

　　Article 41 Consumer finance companies shall strengthen the main responsibility for risk management, independently carry out loan risk review, and independently complete risk control links with important impact, such as pre-loan investigation, identity verification, risk assessment, loan pricing, and credit approval, and shall not outsource business closely related to core management functions such as loan decision-making and risk control.

　　Article 42 A consumer finance company shall strengthen unified credit management, establish an effective risk assessment, credit approval and control mechanism for income and debt repayment ratio, prudently assess the repayment ability and willingness to repay, and reasonably determine the borrower's risk level and credit scheme.

　　Article 43 A consumer finance company shall distinguish between the object, amount, and term of the loan, determine the method, content, and frequency of loan inspections, and track and monitor the use of loan funds and changes in the borrower's credit, so as to ensure the safety of the loan funds. Where it is discovered that the borrower has used loan funds in violation of laws and regulations or misappropriated loan funds to invest in prohibited fields, measures such as requiring the borrower to make rectifications, repaying the loan in advance, or downgrading the loan risk classification shall be adopted for management, and the borrower's liability for breach of contract shall be pursued.

　　Chapter VI: Management of Cooperative Institutions

　　Article 44 Consumer financial companies shall implement a list system of management of cooperative institutions, and conduct classified management of cooperative institutions according to the content and degree of risk of cooperation, so as to ensure that cooperative institutions and cooperation matters comply with laws, regulations and regulatory requirements.

　　"Cooperative institutions" as used in the preceding paragraph includes but is not limited to all types of institutions that cooperate with consumer finance companies in areas such as marketing and customer acquisition, joint funding and loan issuance, payment and settlement, risk sharing, information technology, and overdue collection.

　　Article 45 A consumer finance company shall establish an access mechanism covering all types of cooperative institutions, clarify the corresponding standards, procedures and approval authority, prudently carry out pre-establishment assessments, and reasonably determine the list of cooperative institutions.

　　Article 46 A consumer finance company shall not jointly fund and issue loans with institutions that are not qualified to lend money; shall not accept credit enhancement services provided by institutions that do not have guarantee qualifications and do not meet the regulatory requirements for credit insurance and guarantee insurance operations; Loan quality control shall not be relaxed due to the introduction of guarantee credit enhancement.

　　Article 47 A consumer finance company shall sign a cooperation agreement with a cooperative institution. Clearly stipulate the scope of cooperation, the rights and responsibilities of both parties, income distribution, risk sharing, marketing and publicity, service price information disclosure, consumer rights and interests protection, data confidentiality, dispute resolution, liability for breach of contract, and the cooperative institution's commitment to cooperate with the consumer finance company to accept the inspection of the regulatory authorities and provide relevant information and materials, and require the cooperative institution not to subcontract or subcontract the cooperation matters in disguise.

　　The cooperation agreement shall be based on the principle of matching benefits and risks, based on the real cost of services, and fair and transparent pricing in accordance with the principles of marketization and rule of law; Cooperative institutions shall be required not to collect interest fees from borrowers in any form, except for financial institutions, insurance companies and cooperative institutions with guarantee qualifications that jointly finance and issue loans.

　　Article 48 A consumer finance company shall prudently select its cooperative institutions in accordance with the principle of appropriate diversification to avoid the risks arising from over-reliance on a single cooperative institution.

　　Article 49: Consumer finance companies shall continue to manage cooperative institutions, promptly identify and assess risks caused by cooperative institutions' violations of laws and regulations, urge cooperative institutions to implement compliance management and consumer rights and interests protection responsibilities, and formulate reasonable incentive and restraint mechanisms in consideration of service content, service quality, service compliance, and so forth, and strictly regulate their conduct. Consumer finance companies should conduct a comprehensive assessment of their partner institutions at least once a year.

　　Article 50 Where a consumer finance company discovers that a cooperative institution has collected loan funds in violation of laws and regulations, failed to provide necessary information for loan management in accordance with laws and regulations, or has obvious discrepancies in the quality and price of service charges, or has committed other major violations of laws and regulations, and is unable to continue to meet the access requirements, it shall terminate the cooperation.

　　Chapter VII: Protection of Consumer Rights and Interests

　　Article 51: Consumer finance companies shall incorporate the protection of consumer rights and interests into corporate governance, corporate culture construction, and business development strategies, and establish a work system for the protection of consumer rights and interests.

　　The board of directors shall formulate an overall plan and work structure for the protection of consumer rights and interests, and establish a committee for the protection of consumer rights and interests. Senior management shall establish management mechanisms for the protection of consumer rights and interests, and formulate and implement measures for the protection of consumer rights and interests.

　　Article 52: Consumer finance companies shall establish mechanisms for the management of consumer suitability, carry out pre-loan reviews in accordance with provisions, use information technology and other means to increase the accuracy of customer profiling, and prudently assess consumers' income levels and ability to repay debts.

　　Article 53: Consumer finance companies shall protect consumers' right to know, complete and improve mechanisms for disclosing information on products and services, and inform borrowers in a conspicuous manner of key information such as the annualized interest rate, rate, repayment method, liability for breach of contract, exemption clauses, and complaint channels.

　　Except in the case of the borrower's breach of contract, the consumer finance company shall not charge the borrower any fees other than the loan interest.

　　Article 54: Consumer finance companies shall strengthen the independent management of loan brands, standardize the marketing and publicity conduct of cooperative institutions, avoid confusion between the cooperative institution's service brand and the consumer finance company's own brand, and ensure that the marketing content is truthful, lawful, and in line with public order and good customs.

　　Article 55: Consumer finance companies shall establish systems for the protection of consumers' personal information, adhering to the principles of legality, propriety, necessity, and good faith, and protecting consumers' right to information security. The collection of consumers' personal information shall inform them of the purpose, methods, and scope of collection and use. Personal information must not be collected, stored, used, processed, transmitted, provided, disclosed, or deleted without the consent of consumers, except as otherwise provided by laws and regulations.

　　Article 56 A consumer finance company shall establish a management system for the collection of overdue loans, and urge borrowers to repay debts in accordance with laws and regulations. Violence, threats, intimidation, harassment and other improper means shall not be used to collect the debt, and the collection shall not be carried out on a third party unrelated to the debt.

　　Article 57: Consumer finance companies shall implement the main responsibility for collection management, strengthen the management of cooperative collection agencies, clarify collection strategies and compliance requirements through signing agreements, formulate performance appraisal and reward and punishment mechanisms for collection agencies, and carry out entrusted collection activities in accordance with laws and regulations, so as to protect the lawful rights and interests of financial consumers. The consumer finance company shall inform the borrower of the relevant information of the cooperative collection agency through appropriate means.

　　Article 58: Consumer finance companies shall establish a collection management system, manage and record the collection process, and ensure that the records are true, objective, complete, and traceable, and the relevant data shall be kept for at least 5 years.

　　Article 59: Consumer finance companies shall continue to carry out education and publicity on financial consumers, improve consumers' financial literacy, guide borrowers to be honest and trustworthy, consume rationally, and protect their lawful rights and interests in accordance with law.

　　Chapter VIII: Supervision and Management

　　Article 60 Consumer financial companies shall comply with the following regulatory requirements:

　　(1) The capital adequacy ratio, provision coverage ratio, loan provision ratio and leverage ratio shall not be lower than the minimum regulatory requirements of the State Administration of Financial Supervision and Administration for commercial banks;

　　(2) The balance of interbank loans shall not exceed 100% of the net capital;

　　(3) The liquidity ratio shall not be less than 50%;

　　(4) The balance of the guaranteed credit enhancement loan shall not exceed 50% of the total loan balance;

　　(5) The balance of investment shall not be higher than 20% of the net capital.

　　The State Administration of Financial Supervision and Administration may make appropriate adjustments to the above indicators according to the needs of prudential supervision.

　　Article 61 The State Administration of Financial Supervision and Administration and its dispatched agencies shall, in accordance with the needs of prudential supervision, have the right to conduct on-site inspections of consumer financial companies in accordance with relevant regulations and procedures, and shall have the right to conduct investigations on units and individuals related to suspected illegal matters in accordance with law.

　　Article 62 A consumer financial company shall establish a regular external audit system and submit the annual audit report signed and confirmed by the legal representative to the dispatched agency of the State Financial Supervision and Administration within four months after the end of each fiscal year. When the dispatched agency of the State Administration of Financial Supervision and Administration deems it necessary, it may require the consumer finance company to hire an independent third-party accounting firm to conduct a special audit of the consumer finance company's operating conditions, financial status, risk status, internal control system and implementation status, and may require the consumer finance company to replace an accounting firm with insufficient professional ability and independence.

　　Article 63 The State Administration of Financial Supervision shall conduct a regulatory rating of consumer financial companies on the basis of regulatory needs, and the rating results shall serve as an important basis for measuring the operating conditions, risk level and risk management capabilities of consumer financial companies, formulating regulatory plans, allocating regulatory resources, taking regulatory measures and actions, and market access.

　　Article 64 Where a consumer finance company violates the provisions of these Measures, the State Administration of Financial Supervision and Administration and its dispatched agencies shall have the right to order rectification within a specified period of time; If the rectification is not made within the time limit, or if the company's behavior seriously endangers the company's sound operation and harms the legitimate rights and interests of customers, the State Administration of Financial Supervision and Administration and its dispatched agencies may, in accordance with the Banking Supervision Law of the People's Republic of China and other laws and regulations, take regulatory measures such as ordering the suspension of part of the business and restricting the rights of shareholders.

　　Article 65 A consumer financial company shall, in accordance with regulations, submit relevant reports, regulatory statements and other materials to the State Administration of Financial Supervision and Administration and its dispatched agencies, and ensure that the submitted materials are timely, true, complete and accurate.

　　Article 66 When a consumer finance company has or may have major risks or losses in the course of its operations, it shall immediately take emergency measures and report to the dispatched agency of the State Financial Supervision and Administration in a timely manner.

　　Article 67 A consumer finance company may establish an industry self-discipline organization to implement self-discipline management. Self-regulatory organizations carrying out activities shall accept the guidance and supervision of the State Administration of Financial Supervision and Administration.

　　Chapter 9 Risk Disposal and Market Exit

　　Article 68 A consumer finance company shall, in accordance with the relevant provisions of the State Administration of Financial Supervision and Administration, formulate a recovery and disposal plan and organize its implementation.

　　Article 69 A consumer finance company shall, with the approval of the State Administration of Financial Supervision and Administration, dissolve a consumer finance company in the event of any of the following circumstances:

　　(1) When the business period stipulated in the articles of association of the company expires or other reasons for dissolution arise;

　　(2) The shareholders' meeting decides to dissolve;

　　(3) It is necessary to dissolve due to the merger or division of the company;

　　(4) Other legally-prescribed reasons.

　　Article 70 The State Administration of Financial Supervision and Administration shall have the right to revoke a consumer financial company if it has illegal operations or improper operation and management, and its failure to revoke it will seriously endanger the financial order and harm the public interest.

　　Article 71 When a payment crisis has occurred or is likely to occur in a consumer finance company, seriously affecting the interests of creditors and the stability of the financial order, the State Administration of Financial Supervision and Administration may, in accordance with law, take over the consumer finance company or promote institutional reorganization.

　　The takeover shall be decided and organized by the State Administration of Financial Supervision and Administration.

　　Article 72 Where a consumer finance company meets the bankruptcy requirements stipulated in the Enterprise Bankruptcy Law of the People's Republic of China, the consumer finance company or its creditors may, with the consent of the State Financial Supervision and Administration of the People's Republic of China, apply to the people's court for reorganization, reconciliation or bankruptcy liquidation.

　　The major shareholders of a restructured consumer finance company shall meet the administrative licensing requirements for the establishment of a consumer finance company.

　　The dispatched agency of the State Administration of Financial Supervision and Administration shall, in accordance with the business activities and risk status of the consumer finance company entering bankruptcy proceedings, take regulatory measures such as suspending the relevant business of the consumer finance company.

　　Article 73 Where a consumer finance company is revoked, the State Administration of Financial Supervision and Administration shall, in accordance with law, organize the establishment of a liquidation team and conduct liquidation in accordance with legal procedures.

　　Where a consumer finance company is dissolved, it shall establish a liquidation team in accordance with law, conduct liquidation in accordance with legal procedures, and make clear arrangements for the undertaking of undue debts and related liabilities. The State Administration of Financial Supervision and Administration supervises the liquidation process. After the liquidation is completed, the liquidation team shall submit the liquidation report and other relevant materials to the State Administration of Financial Supervision and Administration in accordance with the regulations.

　　If the liquidation team discovers that the assets of a consumer finance company are insufficient to pay off its debts, it shall immediately stop the liquidation, report to the State Administration of Financial Supervision and, with the consent of the State Administration of Financial Supervision and Administration, apply to the people's court for bankruptcy liquidation of the consumer finance company in accordance with law.

　　Article 74 Where a consumer finance company is taken over, reorganized, revoked or applies for bankruptcy, the State Administration of Financial Supervision shall have the right to require the directors, senior managers and other staff members of the consumer finance company to perform their duties in accordance with the requirements of the State Administration of Financial Supervision and Administration.

　　Article 75: Where a consumer finance company is terminated due to dissolution, revocation, or declaration of bankruptcy, its liquidation shall be handled in accordance with the relevant laws and regulations of the State, and the cancellation of registration shall be handled with the market regulation department in accordance with law.

　　Chapter X: Supplementary Provisions

　　Article 76 The term "major shareholder" as used in these Measures refers to a shareholder who holds or controls more than 5% of the shares or voting rights of a consumer finance company, or holds less than 5% of the total capital or total shares but has a significant impact on the operation and management of a consumer finance company.

　　"Significant influence" as used in the preceding paragraph includes, but is not limited to, nominating or dispatching directors, supervisors or senior management to a consumer finance company, influencing the financial and operational management decisions of a consumer finance company through agreements or other means, as well as other circumstances as determined by the State Administration of Financial Supervision or its dispatched agencies.

　　The term "net capital" in these Measures refers to the difference between the total capital and the corresponding capital deductions calculated by a consumer finance company in accordance with the relevant provisions on capital management formulated by the State Financial Supervision and Administration Administration.

　　Article 77: In these Measures, the words "above", "not less than" and "not less than" all include this number or level.

　　Article 78 The State Administration of Financial Supervision shall be responsible for the interpretation of these Measures.

　　Article 79 These Measures shall come into force on April 18, 2024, and the original Measures for the Administration of Pilot Projects for Consumer Financial Companies (Decree No. 2 of 2013 of the China Banking Regulatory Commission) shall be repealed at the same time.