State Council, Financial Asset Management Companies Regulations

Promulgated: November 20 2000
Effective: as of date of promulgation
Applicability: For the purposes of the Regulations, financial asset management company means a wholly State-owned non-banking financial institution established to acquire the non-performing loans of State-owned banks and to manage and dispose of the assets resulting from such acquisitions (Article 2).

Main contents: The Regulations provide that financial asset management companies assume civil liabilities independently but they are under the supervision of the People's Bank of China (PBOC), the Ministry of Finance and the China Securities Regulatory Commission (CSRC) (Articles 3 and 4). Their primary activities are collecting debts, leasing, transferring or restructuring assets resulting from the non-performing loans, converting credit rights into equity interests and other activities approved by PBOC and CSRC (Article 10). A financial asset management company may transfer its equity interest in enterprises to foreign investors (Article 21). A financial asset management company shall dispose of its assets in accordance with the asset disposal procedures formulated by the Ministry of Finance; when it suffers loss due to the bankruptcy of a debtor, the loss shall be handled in accordance with the relevant provisions of the State Council (Article 26).