Preface

On August 17, 2022, the Guangdong Provincial Local Financial Supervision and Administration Bureau (hereinafter referred to as the “Provincial Financial Bureau”) published the Implementation Rules for the Supervision and Administration of Financial Leasing Companies in Guangdong Province (hereinafter referred to as the “Rules”). Since Guangdong Province is one of the most active provincial-level administrative regions for financial leasing activities in China, and many of the so-called “leading commercial lessors” in China’s financial leasing industry are registered within Guangdong Province, it is foreseeable that the promulgation of the Rules will have a profound impact on a series of future business activities of financial leasing companies in China, especially those within Guangdong Province. In the author’s view, the Rules and the regulatory rules they prescribe have already constituted and will continue to constitute an important part of the regulatory framework for China’s financial leasing industry.

It is noteworthy that the Rules underwent two rounds of public consultation before being issued (the first round starting from May 13, 2021, and the second round from November 19, 2021).

{Note: The differences and main content of the two drafts have been analyzed and explained in detail by the author in the articles “Interpretation of Guangdong Province’s <Leasing Rules (Second Exposure Draft)>” and “Interpretation of <Guangdong Province Financial Leasing Company Supervision and Management Implementation Rules (Exposure Draft)>,” both of which have been published. Readers are welcome to search and refer to them.} From the publication of the first exposure draft to the official release of the Rules, over a year had passed. This shows that the Provincial Financial Bureau, as the drafting authority, attaches great importance to the regulation and governance of the financial leasing industry in the province, as well as to the formulation of the Rules as an important industry regulatory document.

Overall, the main content of the Rules is highly consistent with the second exposure draft published on November 19, 2021 (hereinafter referred to as the “Second Draft”), with only minor revisions made on the basis of the Second Draft. Now that the Rules have been officially released, the author takes this opportunity to provide his understanding of several important provisions of the Rules for the reference and critique of colleagues!

I

Understanding and Analysis

2.1 Clarifying the Industry Self-Regulatory Responsibilities of the Guangdong Financial Leasing Association

Article 6 of the Rules provides:

The Guangdong Financial Leasing Association shall, in accordance with laws, regulations, and its章程, perform the roles of service, coordination, rights protection, and industry self-regulation; cooperate with provincial regulatory authorities in conducting theoretical research, regulatory ratings, data reporting, and other work; carry out activities such as industry self-regulation management, personnel training, and dispute mediation; and guide financial leasing companies to operate lawfully and compete fairly.

It should be noted that financial leasing industry associations in various provinces, municipalities directly under the central government, and autonomous regions (hereinafter referred to as “provincial leasing associations”) have played an important role in practice as bridges and links between local financial leasing companies and relevant government departments such as local financial regulatory authorities. However, the responsibilities of provincial leasing associations in different regions have not all been clearly defined by relevant local financial regulatory laws and regulations.

{Note: (1) The Beijing Local Financial Supervision and Administration Bureau issued the “Beijing Financial Leasing Company Supervision and Management Guidelines (Trial)” (hereinafter referred to as the “Beijing Leasing Guidelines”) on April 7, 2020. Article 44 of that document provides that the Beijing Leasing Industry Association is the self-regulatory organization for the Beijing financial leasing industry, performing duties such as self-regulation, coordination, rights protection, and service, guiding financial leasing companies to operate with integrity, compete fairly, and operate stably. However, the Beijing Leasing Guidelines were subsequently repealed by the enacting authority on July 15, 2021. (2) Article 65 of the “Jilin Province Financial Leasing Company Supervision and Management Implementation Rules (Trial)” provides that local financial regulatory authorities shall strengthen the professional capacity building of financial leasing practitioners, conduct relevant business training for practitioners, take measures to improve the comprehensive quality of practitioners, and cultivate a group of financial leasing talents with high professional capabilities. Support industry associations in conducting training, textbook compilation, level assessment, experience promotion, and business exchange. Increase the propaganda and popularization of financial leasing concepts and knowledge, continuously enhance the social influence and recognition of the financial leasing industry, and create a good social atmosphere for industry development. In the author’s view, the above documents indirectly define the scope of work of industry associations but do not explicitly designate “industry associations” as provincial leasing associations. (3) Article 39 of the “Yunnan Province Financial Leasing Company Supervision and Management Implementation Rules (Trial)” provides that the financial leasing industry association is the self-regulatory organization of the financial leasing industry and a social团体法人. Legally established financial leasing industry associations shall play communication, coordination, and industry self-regulatory roles according to their章程, perform coordination, rights protection, self-regulation, and service functions, carry out activities such as industry training, theoretical research, and dispute mediation, cooperate with regulatory authorities, and guide financial leasing companies to operate with integrity, compete fairly, and operate stably. The above provisions also do not explicitly designate the “financial leasing industry association” as a provincial leasing association. (4) Article 8 of the “Hunan Province Financial Leasing Company Supervision and Management Guidelines (Trial)” provides that according to industry development needs, a Hunan Province Financial Leasing Industry Association shall be established in due course according to law, performing duties such as self-regulation, coordination, rights protection, and service, guiding financial leasing companies in the province to operate with integrity, compete fairly, and operate stably. In the author’s understanding, the above provisions leave space at the regulatory document level for a provincial leasing association that may be established in the future. These provisions can be understood as special provisions for a (potentially future) provincial leasing association.}

The author believes that the above provisions of the Rules have significant and positive implications, mainly including the following two aspects:

(I) Clear Rights and Responsibilities, Legal Basis.

Through the clarification of regulatory laws and regulations, the responsibilities and status of the Guangdong Financial Leasing Association have a legal basis. In fact, the author believes that this clarification has the effect of authorization, i.e., the Provincial Financial Bureau authorizes the Guangdong Financial Leasing Association to perform corresponding industry self-regulatory functions within the scope prescribed by the Rules.

At the same time, it also clearly distinguishes the Guangdong Financial Leasing Association from other social organizations and intermediary institutions within Guangdong Province. That is, compared with other social organizations and intermediary institutions within Guangdong Province, the industry self-regulatory functions and status of the Guangdong Financial Leasing Association are explicitly stipulated by the Rules.

(II) Clarifying the Definition of Self-Regulatory Functions.

Article 6 of the Rules stipulates the self-regulatory functions of the Guangdong Financial Leasing Association. Industry association self-regulation, broadly speaking, is the self-management of the industry association, an essential requirement for the industry association to practice industry autonomy, running through the entire process of the association’s existence and development.

{Note: Zhao Hai (Executive Vice President of Shanghai Development Zone Association): “Calling for Legislation on Industry Association Self-Regulation at the National Level,” April 14, 2020, published online at: https://mp.weixin.qq.com/s/8NFfDByMK-vzFgrc3Ie9jw.} To enable industry associations to better perform their self-regulatory functions, clarifying these functions through relevant laws, regulations, and regulatory documents is particularly important.

The author believes that the above provisions of the Rules also reflect the refinement of the CBIRC’s “Interim Measures for the Supervision and Administration of Financial Leasing Companies” (hereinafter referred to as the “Interim Measures”).

The Rules clarify the functions and status of the Guangdong Financial Leasing Association, which is conducive to the future development of its self-regulation management work. Specifically, the Rules clarify the self-regulatory functions of the Guangdong Financial Leasing Association, i.e., to lawfully play the roles of service, coordination, rights protection, and industry self-regulation, and to carry out activities such as theoretical research, personnel training, and dispute mediation. The Rules also emphasize that the Guangdong Financial Leasing Association shall cooperate with provincial regulatory authorities in conducting regulatory ratings, data reporting, and other work, and guide lawful operation and fair competition.

2.2 Provisions on Registration of Financial Leasing Companies

Article 8 of the Rules retains the provision from the Second Draft requiring that when municipal regulatory authorities consult with market regulation authorities regarding company registration (registration of financial leasing companies), they should consider whether the applicant’s “development strategy and business model are clear and definite, and whether the profit model is sustainable.” The author believes that the above provisions have significant implications, specifically as follows:

First, regulatory authorities will conduct a “substantive review” of the reasonableness of the development strategy, business model, etc., of proposed financial leasing companies.

In practice, the purposes of some investors in establishing financial leasing companies are diverse. Some investors may not necessarily aim to operate a financial leasing company on an ongoing basis, but may have other purposes: for example, for some investors with speculative motives, if their purpose in registering a financial leasing company is to subsequently transfer their equity holdings in the company to third parties to achieve a “shell” sale, such transactions would fall under circumstances lacking a clear and definite business model and having an unsustainable profit model; for another example, some investors seeking so-called “full financial licenses” may register a financial leasing company merely to obtain a complete set of “quasi-financial institution” licenses, without having the business development plan, personnel, industry knowledge reserves, or industry advantages to conduct financial leasing business, which may be deemed by regulators as lacking a clear and definite business model and having an unsustainable profit model.

Second, local financial regulatory authorities are concerned about whether the profit model of newly established financial leasing companies is sustainable.

Based on industry experience and practice, the author speculates that regulatory authorities may comprehensively assess various situations to determine whether the profit model of a proposed financial leasing company is sustainable, mainly including: whether the proposed main business complies with Chinese laws and regulations and whether it is a business type encouraged by the state or the province; the expected revenue level of the proposed business; and under reasonable circumstances, whether the proposed financial leasing company can obtain financing, the type or nature of financing, and the cost of available financing, etc.

2.3 Prohibitions on Outsourcing/Transfer of Qualifications

Article 12 of the Rules retains the provision from the Second Draft prohibiting provincial financial leasing companies from “outsourcing core businesses such as credit review for businesses involving natural person customers.” The author believes that this provision, to some extent, is also a reaffirmation of Article 5 of the Interim Measures. Article 5 of the Interim Measures lists, without a catch-all clause, the scope of business that financial leasing companies in China may conduct. In other words, if a financial leasing company conducts business not listed in Article 5 of the Interim Measures, such business is not compliant.

Furthermore, Article 8 of the Interim Measures also empowers local financial regulatory authorities to add prohibited business types or scopes for financial leasing companies within their authority. The above prohibitive provisions of the Rules also implement Article 8 of the Interim Measures, refining and clarifying the “other businesses or activities prohibited by provincial local financial regulatory authorities” as stipulated in Article 8 of the Interim Measures.

The author believes

that the above new content in the Rules addresses practical situations where some financial leasing companies do not employ a reasonable number of employees and/or do not actually conduct financial leasing business-related work themselves (although the relevant transactions’ financial leasing legal relationships and fund flows may be established between such companies and lessees), but instead conduct various business activities through third parties, including actually having third parties carry out financial leasing business development and risk review. This situation constitutes what the Rules refer to as “outsourcing.” In reality, such “outsourcing” is, to some extent, a violation of lending the qualifications and corporate status of a financial leasing company.

Such outsourcing and transfer of financial leasing company qualifications are not only explicitly prohibited by the provincial Rules. Other local financial regulatory authorities (e.g., Shanghai) also have similar prohibitive provisions.

{Note: Article 22 of the “Shanghai Financial Leasing Company Supervision and Management Interim Measures”: Financial leasing companies shall not conduct the following businesses or activities: (1) illegal fundraising, absorption or disguised absorption of deposits; (2) granting or entrusting the granting of loans; (3) borrowing or disguised borrowing of funds with other financial leasing companies; (4) directly or indirectly raising funds from the public through online lending information intermediaries, various local trading venues, unlicensed asset management institutions, private investment funds, and other institutions, by means of asset securitization, asset management plans, asset transfers (including transfer of claims or income rights), etc. (except for equity financing conducted in accordance with the law and other circumstances otherwise provided by the state and this Municipality); (5) lending or renting financial leasing business qualifications; (6) collecting debts or disposing of leased assets by violence or other illegal means; (7) other business activities prohibited by laws, regulations, and industry regulatory systems.}

Moreover, it should be noted that with the successive promulgation of laws, regulations, departmental rules, and regulatory documents concerning data compliance, security, and protection, such as the Cybersecurity Law, Data Security Law, Personal Information Protection Law, and Credit Reporting Business Management Measures, China’s data legal system is gradually improving. For financial leasing companies conducting business with individual customers, since they obtain personal customer information, they may become responsible parties under the relevant data legal framework to varying degrees. If they transfer or transmit obtained personal customer information to third parties, the corresponding data compliance risks are also significant. Data compliance obligations and risks arising from data laws are issues worthy of attention for the financial leasing industry in the future, especially for financial leasing companies primarily engaged in individual customer businesses.

2.4 Clarifying the Scope of Prudential-Level Business

Article 13 of the Rules retains the provisions from the Second Draft regarding businesses or activities that provincial financial leasing companies should prudently conduct.

The Rules provide:

(1) Conducting batch business where the end customers are actually natural persons, either independently or in cooperation with third parties such as ride-hailing platforms and auto service companies. Batch business refers to, within one calendar year, the number of times such business is conducted or the number of natural person lessees involved exceeding 10 transactions (individuals), where the transfer price of a single leased asset in most transactions is less than RMB 500,000, and the transaction structures are the same or similar.

(2) Conducting rental loans or other businesses with similar functions in cooperation with commercial banks or other financial organizations. A rental loan is a credit product where, after the execution of a financial leasing contract, a commercial bank provides a loan to the lessee (specifically for paying rent under the financial leasing contract), and the lessee repays the loan to the commercial bank in accordance with the loan contract.

The above businesses shall be conducted prudently in accordance with the principles of legality and compliance, controllable risks, and clear rights and responsibilities of all parties. Regulatory authorities should pay special attention and may adopt stricter regulatory measures when necessary.

The first exposure draft (hereinafter referred to as the “First Draft”) published by the Provincial Financial Bureau on May 13, 2021, had included a provision regarding “without identifying the risks of the entire business chain and locking in a legal, true, and closed-loop repayment mechanism.” This provision was subsequently deleted in the Second Draft. The Rules retain the revision from the Second Draft, providing a relatively strict definition of the concept of batch business.

Furthermore, the Rules explicitly prohibit provincial financial leasing companies from conducting rental loans or similar transactions with commercial banks and define rental loans. Based on the author’s relevant business experience, in practice, products like rental loans are more common in businesses such as auto financial leasing, where the rental amount per single transaction is relatively small, the lessees are mostly natural persons, and the transaction frequency is generally high. Therefore, financial leasing businesses involving rental loans often also fall within the category of “batch business” as defined in the Second Draft.

Finally, Article 14 of the Rules also provides that local financial regulatory authorities will pay special attention to financial leasing companies conducting the above businesses. The author hereby suggests that existing and future financial leasing companies that plan to conduct similar businesses pay attention to potentially heavier compliance obligations and make corresponding rectifications and adjustments in light of their own business activities.

2.5 Provisions on the Scope of Leased Assets

First, the First Draft had provided: “The leased asset applicable to financial leasing transactions is固定资产 with clear title, real existence, and capable of generating income (including intangible assets recorded as fixed assets). Unless otherwise provided.” The Second Draft subsequently revised this content, and the Rules retain the content of the Second Draft, specifically as follows:

The leased asset applicable to financial leasing transactions is固定资产 with clear title, real existence, and capable of generating income, unless otherwise provided by the state or the province.

Financial leasing companies shall lawfully obtain ownership of the leased asset and shall not accept property that has been mortgaged, has disputed title, is without the right of disposition, has been sealed up or distrained by judicial authorities, or has defective title as a leased asset.

We believe that the deletion of the phrase “(including intangible assets recorded as fixed assets)” from the original First Draft in the Second Draft and the Rules is correct.

In accounting, the rules for recording fixed assets are clear and unambiguous, and no further explanation or clarification of fixed assets is needed. Moreover, in practice, because financial and accounting knowledge and levels vary among practitioners in different financial leasing companies, it is inevitable that some practitioners may not accurately understand the accounting treatment rules for fixed assets. Adding the above content from the original First Draft to the regulatory rules might instead create unnecessary comprehension barriers within the industry.

Second, regarding the content of the second paragraph of Article 14 of the Rules, the author believes:

First, at the legal level, if the lessor does not lawfully obtain ownership of the leased asset, the nature of the contract involved in the underlying transaction generally cannot constitute a financial leasing contract. Second, at the regulatory level, the Rules provide that “property that has been mortgaged, has disputed title, is without the right of disposition, has been sealed up or distrained by judicial authorities, or has defective title shall not be accepted as a leased asset,” highlighting the security function of the leased asset for the rental claim.

It is commonly understood that the “Minutes of the National Conference on Civil and Commercial Trials” (九民纪要), the Civil Code, and the “Judicial Interpretation of the Security System” have restructured China’s chattel security system. Some scholars believe that under current law, the lessor’s ownership of the leased asset in a financial leasing legal relationship is a functional ownership (i.e., security function), rather than attributional ownership. Under current law, this lessor’s ownership is an atypical security interest. Article 1 of the “Judicial Interpretation of Security Rights” also provides that disputes arising from guarantees such as mortgage, pledge, lien, and suretyship shall be governed by this interpretation. Disputes involving security functions in retention of title sales, financial leasing, factoring, etc., shall be governed by the relevant provisions of this interpretation.

Finally,

The author also notes the provision regarding “without the right of disposition” in the above clause of the Rules. The author believes that this provision may represent a negative opinion, from a compliance perspective, on the relatively common industry practice of sub-leasing transactions involving multiple sales of the leased asset between financial leasing companies (or between financial leasing companies and financial leasing companies), known in the industry as “double sale-leaseback,” “sub-leasing,” “sub-sale-leaseback,” and “multi-sale sub-leasing” (hereinafter collectively referred to as “multi-sale sub-leasing”), on the grounds that the title to the leased asset is defective{Note: The author believes that even from the perspective of prohibiting borrowing of funds between financial leasing companies, “multi-sale sub-leasing” also presents compliance risks.}.

The reason is that in “multi-sale sub-leasing,” the lessee in the second “sale-leaseback” (i.e., the lessor in the first “sale-leaseback”) does not have the right to dispose of the leased asset (or its right of disposition is not complete, assuming it can lawfully obtain ownership of the leased asset). This view has also been confirmed by relevant judicial practice. {Note: See Shanghai Financial Court (2021) Hu 74 Min Zhong No. 323 Civil Judgment.} Therefore, if provincial financial leasing companies continue to conduct “multi-sale sub-leasing” after the implementation of the Rules, they may face significant compliance risks.

2.6 Provisions on Related-Party Transactions

The Rules’ provisions on related-party transactions conducted by financial leasing companies differ significantly from both the First Draft and the Second Draft.

It can be seen that both the First Draft

{Note: Relevant content of the First Draft: When a financial leasing company votes or makes decisions on transactions where the lessee is a related enterprise, persons related to the related-party transaction shall recuse themselves. However, recusal may be waived if the lessee is the sole shareholder of the financial leasing company or the transaction is related to all shareholders, provided that the shareholder does not use the related-party relationship to harm the interests of the financial leasing company.} and the Second Draft

{Note: Content of the Second Draft: When a financial leasing company votes or makes decisions on transactions where the lessee is a related enterprise, interested persons shall recuse themselves. Recusal may be waived if the lessee is the sole shareholder of the financial leasing company, the transaction is related to all shareholders, or all members of the shareholders’ meeting, board of directors, or authorized body have a related relationship, provided that the interests of the financial leasing company or non-related shareholders are not harmed.} both provided certain exemption provisions for common practical transactions (hereinafter referred to as “internal business”) regarding the recusal of related parties, such as “the lessee is the sole shareholder of the financial leasing company or the transaction is related to all shareholders” or “the lessee is the sole shareholder of the financial leasing company, the transaction is related to all shareholders, or all members of the shareholders’ meeting, board of directors, or authorized body have a related relationship.”

However, these exemption provisions for internal business ultimately did not appear in the final Rules. Article 20 of the Rules adopts a provision completely consistent with Article 13 of the Interim Measures. {Note: Article 13 of the “Interim Measures for the Supervision and Administration of Financial Leasing Companies”: Financial leasing companies shall establish a related-party transaction management system, and their related-party transactions shall follow commercial principles, be conducted independently, and be priced fairly, and shall be conducted on terms no better than those for similar transactions with non-related parties. When a financial leasing company votes or makes decisions on transactions where the lessee is a related enterprise, persons related to the related-party transaction shall recuse themselves. Major related-party transactions of a financial leasing company shall be approved by the shareholders’ meeting, board of directors, or their authorized bodies. Transactions between a financial leasing company and its controlled subsidiaries or project companies are not subject to the regulatory requirements for related-party transactions under these Measures.}

The Company Law and other relevant laws, regulations, and regulatory documents establish a comprehensive recusal system for related-party transactions of companies. The related-party transaction recusal system is designed to address the issue of de facto controllers, decision-making layers (mainly the board of directors), and management using related-party relationships to harm the interests of the company or minority shareholders. This system is commonly found in the corporate governance systems and related regulatory laws of financial institutions and listed companies. Article 13 of the Interim Measures also establishes this system as a compliance obligation for financial leasing companies in terms of corporate governance, business decision-making, and internal control.

The reason why the Rules ultimately adopted the current provision is, in the author’s speculation, possibly because the relevant content of the original First Draft and Second Draft lacked a basis in higher-level laws.

As the author stated in the article “Interpretation of Guangdong Province’s <Leasing Rules (Second Exposure Draft)>,” some state-owned financial leasing companies in China, due to their corporate governance structure, personnel system, and other practical realities, often have a large number of related-party transactions in practice (especially in the process of conducting internal business)

{Note: See Huang Enlin, “Interpretation of Guangdong Province’s <Leasing Rules (Second Exposure Draft)>,” November 21, 2021, first published on the Guangdong Financial Leasing Association WeChat public account}, and their business concentration is relatively high. Therefore, perhaps in an attempt to solve the practical difficulties of provincial state-owned financial leasing companies, the First Draft and Second Draft included the above exemption clauses. This shows the Provincial Financial Bureau’s detailed and comprehensive understanding of the actual situation in the industry. The author also highly commends the Provincial Financial Bureau’s tremendous efforts and attempts in solving practical difficulties in the industry.

2.7 One of the Key Points for Future Compliance System Construction

of Provincial Financial Leasing Companies: Customer Complaint Mechanism

The Rules retain the provisions from the Second Draft regarding the requirement for financial leasing companies to establish a sound complaint and dispute handling mechanism. It also provides that financial leasing companies shall establish a customer information protection system, shall not excessively collect customer information during business operations, and shall not illegally collect, use, buy, sell, provide, or disclose it. Attorney’s Analysis:

The author believes that the above provisions will constitute new compliance obligations for provincial financial leasing companies. Provincial financial leasing companies should compare their existing practices against these compliance obligations to assess whether they have established mechanisms such as a “dispute handling mechanism,” whether there are effective “published complaint hotlines and other complaint channels,” whether they can “properly handle and provide timely feedback on customer complaints,” and whether they have established a “customer information protection system.”

2.8 Revisions on Reporting Obligations

Article 31 of the Rules provides: Financial leasing companies shall establish a major event reporting system. After the occurrence of the following events, they shall report to the provincial and municipal regulatory authorities within 5 working days. Reporting shall be conducted through the provincial off-site supervision system for local financial organizations (if events occur frequently, batch reporting of the previous month’s relevant situation may be made within the first 5 working days of each month).

(I) Prudential business or activities mentioned in Article 13 of these Rules; (II) Major related-party transactions mentioned in Article 20 of these Rules; (III) Major debts with a single amount exceeding 10% of net assets; (IV) Contingent liabilities such as external guarantees with a single amount exceeding 20% of net assets; (V) Major losses or compensation liabilities exceeding 10% of net assets; (VI) Pledge, freeze, judicial auction, custody, trust arrangement, or legal restriction on voting rights of more than 5% of the company’s shares held by any shareholder; (VII) The company being publicly listed for abnormal business operations, or the company and its legal representative, directors, supervisors, or senior management being subject to administrative penalties; (VIII) Suspension of business for 3 consecutive months without justifiable reason or for an aggregate of 3 months within one fiscal year; (IX) Major pending litigation or arbitration with an amount in dispute exceeding 10% of the company’s net assets; (X) Other circumstances required to be reported by provincial regulatory authorities.

It can be seen that the above provisions on the reporting obligations of financial leasing companies have undergone significant adjustments compared to the corresponding content in the Second Draft.

For example, the number of reportable items has increased from 8 in the original Second Draft to the current 10. For another example, the standard for reporting litigation or arbitration involving financial leasing companies has been changed from “major pending litigation or arbitration with an amount in dispute exceeding 30% of the company’s net assets” in the original Second Draft to “major pending litigation or arbitration with an amount in dispute exceeding 10% of the company’s net assets.” It is worth mentioning that, considering that the batch business in Article 13 of the Rules generally exhibits characteristics of “small amount, high frequency, and large volume,” Article 31 of the Rules specifically provides that “if events occur frequently, batch reporting of the previous month’s relevant situation may be made within the first 5 working days of each month,” to avoid excessively heavy reporting burdens on provincial financial leasing companies whose main business is auto financial leasing.

Considering the content of this Article of the Rules as a whole, the author believes that compared to the Second Draft, the Rules have strengthened the reporting obligations of provincial financial leasing companies. The author suggests that provincial financial leasing companies should pay attention to and master the above changes in the Rules.

II

Conclusion and Outlook

The author believes that by formulating and issuing the Rules, the Provincial Financial Bureau has clearly responded to many issues currently of concern within the industry, demonstrated its regulatory tendencies and attitudes, and to some extent, solved some problems concerning the provincial financial leasing industry.

Here, as one of the legal professionals who participated in the discussion and论证 work of the First Draft and Second Draft, the author takes this opportunity to express sincere gratitude and appreciation to the relevant responsible persons of the Provincial Financial Bureau for their sense of industry responsibility.

The author also believes that, with the promulgation of the Rules and future local laws, regulations, or regulatory documents concerning the regulation of local financial organizations in the province, the regulatory environment, policy orientation, industry activities, and self-regulation management of provincial financial leasing companies are entering a new era. Let us all look forward to and work together!