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 and Commerce, Tentative Measures for the Administration of Financing Security Companies

Promulgated: March 8 2010

Effective: as of date of promulgation

Applicability: For the purposes of these Measures, the term “financing security” means the act whereby a guarantor agrees with a banking financial institution or other such creditor that in the event that the secured party fails to discharge its financing debt to the creditor, the guarantor will assume, in accordance with the law, the security liability specified in the contract.

For the purposes of these Measures, the term “financing security company” means a limited liability company or company limited by shares established in accordance with the law and engaging in the financing security business (Article 2).

Main contents: The Measures specify the criteria for establishing a financing security company. The minimum registered capital requirement for financing security companies shall be specified based on local realities, which may not, however, be less than Rmb5 million (Article 10).

The Measures also set forth provisions concerning the changes to, termination of and scope of the business of a financing security company.

Related legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21; PRC Security Law, Jun 30 1995, CLP 1995 No.6 p.21; and PRC Contract Law, Mar 15 1999, CLP 1999 No.4 p.19