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(9) Merger or division; or
(10) Any other matter prescribed by the CBRC.
Article 18 A finance leasing company may be dissolved upon approval of the CBRC under any of the following circumstances:
(1) The business term as prescribed in its articles of association expires or any other cause for dissolution as specified by its articles of association arises;
(2) The (general) assembly of shareholders makes a resolution on dissolution;
(3) The dissolution is required by virtue of the merger or division of the company;
(4) The company's business license is revoked, or the company is ordered to be closed down or is canceled; or
(5) Any other statutory cause.
Article 19 A finance leasing company may apply to the court for bankruptcy upon approval of the CBRC under any of the following circumstances:
(1) It cannot pay off its due debts, and it may apply for bankruptcy as initiated by itself or as required by the creditor; or
(2) It is liquidated by virtue of dissolution or revocation, and the liquidation group finds that the assets of the finance leasing company are not enough to pay off its debts and the company should apply for bankruptcy.
Article 20 If a finance leasing company fails to pay off its due debts and its assets are not enough to pay off all the debts or it clearly lacks the solvency, the CBRC may apply for the reorganization or bankruptcy liquidation of this finance leasing company to the people's court.
Article 21 In case a finance leasing company is terminated by virtue of dissolution, revocation or bankruptcy announcement, liquidation shall be handled in accordance with relevant laws and regulations of the state.
Chapter III Business Scope
Article 22 A finance leasing company may, upon approval of the CBRC, engage in all or part of the following businesses in renminbi or any foreign currency:
(1) To conduct financing leasing business;
(2) To absorb time deposits with the term of one year or longer from its shareholders;
(3) To accept the guaranty for lease from the lessee;
(4) To transfer receivable payment for lease to commercial banks;
(5) To issue financial bonds upon approval;
(6) To conduct inter-bank lending and borrowing;
(7) To borrow money from financial institutions;
(8) To borrow foreign exchanges from abroad;
(9) To sell off and dispose of the scrap value of leased objects;
(10) To conduct economic consultancy; and
(11) Other businesses as approved by the CBRC.
Article 23 Any finance leasing company is prohibited from absorbing deposits from any bank shareholder.
Article 24 If the business of a finance leasing company involves in any matter about foreign exchange control, it shall observe provisions on foreign exchange control of the state.
Chapter IV Business Rules
Article 25 With respect to corporate governance, a finance leasing company shall set up an organizational framework mainly composed of the (general) assembly of shareholders, the board of directors, the board of supervisors and senior managers, classify their respective duties clearly, guarantee their independent operation and effective check and balance and form a scientific and efficient policy-making, incentive and constraint mechanism.
Article 26 A finance leasing company shall, in accordance with the principles of full scale, prudence, effectiveness and independence, set up and perfect the rules for internal control, and submit them to the CBRC or its dispatched institutions for archival filing.
Article 27 The associated transaction of a finance leasing company shall, in accordance with the commercial principles, be carried out on terms not more favorable than similar transactions conducted with non-associated parties.
Article 28 A finance leasing company shall constitute rules for managing associated transactions, which shall specifically include:
(1) Supervision over and management of associated transactions by the board of directors or the business decision-making body;
(2) Duties and personnel composition of the associated transaction control committee;
(3) Collection and management of the information about associated parties;
(4) Rules for reports, commitments, identification and confirmation of associated parties;
(5) Types, pricing policies, as well as examining and approving procedures and standards for associated transactions;
(6) Withdrawal system;
(7) Internal audit and supervision;
(8) Information release;
(9) Punishment measures; and
(10) Other contents as required by the CBRC.
Article 29 Any major associated transaction of a finance leasing company shall be subject to approval of the board of directors. The "major associated transaction" means a single transaction conducted between the finance leasing company and an associated party with a transaction amount of not less than 5 percent of the net capital of the finance leasing company, or any transaction, after which the trading balance of the finance leasing company and the associated party is not less than 10 percent of the net capital of the finance leasing company.
Article 30 When the board of directors of a finance leasing company, the operation decision-making institution of a finance leasing company without a board of directors or an associated transaction control committee votes on or makes a decision about an associated transaction, the persons related to the associated transaction shall withdraw.
Article 31 For the business of sale and rent-back, a specific subject matter is required, and the subject matter shall comply with the present Measures.
Article 32 The subject matter of the business of sale and rent-back shall be actually owned by the lessee and the lessee shall have the right to dispose of it. A finance leasing company may not accept any property under mortgage, involved in any ownership dispute or sealed or seized by the judicial organ or with any other flow as the subject matter of the business of sale and rent-back.
Article 33 A finance leasing company shall, in the business of sale and rent-back, have the pricing basis that is reasonable and does not violate accounting standards as the reference for the purchase price of the subject matter, and may not purchase anything of low value at high price.
Article 34 A finance leasing company, which engages in the business of sale and rent-back, shall actually obtain the ownership of corresponding subject matters. If the subject matter is a property whose transfer of ownership should be registered at the registration organ in accordance with any law or regulation of the state, the finance leasing company shall make corresponding registration.
Chapter V Supervision and Administration
Article 35 A finance leasing company shall conform to the following supervisory indicators:
(1) Capital adequacy ratio. The net capital of a finance leasing company may not be below 8 percent of the risk weighted assets;
(2) Financing concentration ratio to a single client. The financing balance of a finance leasing company to a single lessee may not be more than 30 percent of its net capital. For the calculation of the financing balance to a client, the guaranty provided by the lessee when granting credits may be deducted;
(3) Correlation degree of single clients. The financing balance of a finance leasing company to an associated party may not be more than 30 percent of its net capital;
(4) Correlation degree of group clients. The financing balance of a finance leasing company to all the associated parties may not be more than 50 percent of its net capital; and
(5) Inter-bank borrowing proportion. The borrowed capital balance at the inter-bank market by a finance leasing company may not be more than 100 percent of its net capital.
The CBRC may, on the basis of the demand of supervisory work, properly adjust the aforesaid indicators.
Article 36 A finance leasing company shall make information disclosure in accordance with related accounting standards for business enterprises and the related provisions of the CBRC.
Article 37 For risk assets, a finance leasing company shall conduct the five-grade classification system.
Article 38 A finance leasing company shall, in accordance with related provisions, constitute rules for bad debt reserves, and prepare the bad debt reserves in a timely and sufficient manner. Otherwise, it may not distribute profits.
Article 39 A finance leasing company shall, in accordance with the legal provisions, prepare balance sheets, profit and loss statements and other statements as required by the CBRC and report them to the CBRC. The legal representative and other direct handlers of a finance leasing company shall be responsible for the authenticity of the statements as provided.
Article 40 A finance leasing company shall, within four months as of the end of each accounting year, submit to the CBRC or its dispatched institutions a report on associated transactions for the previous accounting year. The report shall include associated parties, trade types, trading volumes and subject matters, trading prices, pricing methods, proceeds and losses from transactions, as well as the nature and proportion of rights and interests of associated parties in the transactions, etc.
Article 41 A finance leasing company shall set up a regular external audit system, and shall, within four months as of the end of each accounting year, submit to the CBRC and its dispatched institutions the annual audit report as signed by its legal representative .
Article 42 If a finance leasing company goes against the related provisions in the present Measures, the CBRC may order it to make corrections within a fixed period; if it fails to do so within the fixed period, or its act seriously endangers its stable operation or damages lawful rights and interests of clients, the CBRC may, by considering the specific situations, adopt such supervisory measures as business suspension or restriction of shareholders' rights, etc. in accordance with the Banking Supervision Law of the People's Republic of China and other laws and regulations.
Article 43 If a finance leasing company has fallen in or may fall in a credit crisis, which seriously damages the lawful rights and interests of clients, the CBRC may conduct the trusteeship to it or urge it to reorganize, and have the right to revoke it for the serious circumstances.
Article 44 If a finance leasing company goes against any related provision in the present Measures, the CBRC may punish it in accordance with the Banking Supervision Law of the People's Republic of China and other laws and regulations. Where the finance leasing company refuses to accept the punishment decision, it may apply for administration review or lodge an administrative lawsuit to the people's court.
Chapter VI Supplementary Rules
Article 45 The CBRC shall be responsible for the interpretation of the present Measures.
Article 46 The present Measures shall go into effect as of March 1, 2007.
(Not the official translation. Source: www.fdi.gov.cn) | 
