The non-performing asset industry welcomes heavyweight documents——
Management Measures for Non Performing Asset Business of Financial Asset Management Companies
Non-performing asset network
On November 11, 2024, the non-performing asset industry received a heavyweight document——
Recently, the State Administration for Financial Regulation formulated and released the "Measures for the Management of Non Performing Asset Business of Financial Asset Management Companies" (hereinafter referred to as the "Measures"), and relevant department heads answered questions from reporters on related issues.
1、 What is the background of the formulation of the Measures?
Since the commercialization transformation of financial asset management companies, under the guidance of regulatory authorities, they have focused on functional positioning, main responsibilities and businesses, and leveraged their professional expertise in resolving risks for financial institutions and real enterprises, effectively maintaining the stable operation of the national economy. Considering the significant changes in asset risk characteristics of financial institutions, in order to align with relevant policies, expand the scope of asset acquisitions by financial asset management companies in an orderly manner, and assist financial institutions in revitalizing their stock, the State Administration for Financial Regulation has formulated and released this "Measures". The promulgation of the Measures is an important measure to thoroughly implement the spirit of the Central Financial Work Conference, which is conducive to guiding financial asset management companies to focus on their main business of non-performing assets, improving their professional capabilities in acquisition, management, and disposal, playing a positive role in preventing and resolving financial risks and supporting the development of the real economy under the new situation, and exerting financial rescue and countercyclical adjustment functions.
2、 What are the main contents of the 'Measures'?
The Measures consist of 8 chapters and 70 articles, including general provisions, acquisition of non-performing assets, management of non-performing assets, disposal of non-performing assets, other businesses related to non-performing assets, risk management, supervision and management, and supplementary provisions. The Measures start from the entire process of acquiring, managing, and disposing of non-performing assets of financial asset management companies, systematically expand the scope of non-performing asset acquisition, clarify and refine the standards for non-performing assets of non-financial institutions that can be acquired, and further clarify regulatory requirements for key links such as due diligence, disposal pricing, and disposal announcements. At the same time, it stipulates that financial asset management companies can carry out light asset businesses such as consulting and entrusted disposal related to non-performing assets, cultivate differentiated core competitiveness, and play an active role in playing a countercyclical rescue function, especially in the reform of insurance for small and medium-sized financial institutions.
3、 What are the new adjustments to the scope of non-performing asset acquisition for financial asset management companies in the Measures?
In recent years, the asset structure of commercial banks and other financial institutions in China has undergone significant changes, and the corresponding risk classification regulatory system has also been adjusted. In order to better connect with relevant policies such as the "Classification Measures for Financial Assets of Commercial Banks", the "Measures" have orderly expanded the scope of non-performing financial assets that financial asset management companies can acquire, allowing them to acquire restructured assets held by financial institutions, other assets that have already experienced credit impairment, etc., to help financial institutions revitalize their stock and release more credit resources to invest in key areas supported by national policy guidelines. At the same time, in order to guide financial asset management companies to further support and serve the development of the real economy, the Measures clearly define the standards for the acquisition of non-performing assets by non-financial institutions, and encourage financial asset management companies to effectively play the role of financial assistance and countercyclical adjustment.
4、 How can the Measures promote financial asset management companies to enhance their professional capabilities?
The Measures adhere to the premise of legal compliance, openness and transparency, combined with the business practice experience of financial asset management companies in recent years and the requirements of the non-performing asset market, refine the operational norms of the entire process of non-performing asset acquisition, management, and disposal, clarify the regulatory requirements for key links such as due diligence, disposal pricing, and disposal announcements, guide financial asset management companies to improve their professional acquisition and disposal capabilities, and balance asset value, economic value, and social value comprehensively. At the same time, the Measures also emphasize that financial asset management companies should establish and improve internal control and risk management systems, build clear approval and decision-making mechanisms with clear rights and responsibilities, clear processes, and effective operation, strictly implement requirements such as "separation of evaluation and review", and effectively prevent moral risks.
5、 What are the main considerations for financial asset management companies to engage in consulting and other non-performing asset related businesses as stipulated in the Measures?
At present, there is a demand for consulting and entrusted disposal services in China's non-performing asset market. In order to fully leverage the comparative competitive advantages of financial asset management companies in professional knowledge, talent teams, and disposal experience, the "Measures" stipulate that financial asset management companies can combine their own resource endowments to carry out light asset, high value-added businesses such as consulting and entrusted disposal around the main business of non-performing assets, comprehensively use various means to help clear financial and real economy risks, and improve the quality and efficiency of resolving and disposing of financial risks.
Source | State Administration of Financial Supervision and Administration