The Strictest Supervision for Local AMCs

On July 15, the National Financial Regulatory Administration officially issued the Interim Measures for the Supervision and Administration of Local Asset Management Companies (the “Measures”), which took immediate effect. This marks a new stage of more standardized and transparent development for China’s local asset management companies (referred to as “local AMCs”).

The Measures comprises four chapters and 45 articles, covering general provisions, business operations and risk management, supervision and administration, and supplementary provisions. One of the most crucial aspects is the clear definition of the business scope for local AMCs, promoting their return to the core business of managing non-performing assets. The Measures specifically emphasize that local AMCs “must not engage in activities beyond the aforementioned scope” and delineate operational boundaries through a negative list. The Measures also set quantitative indicators: requiring that the average annual financial non-performing asset acquisitions over the past three years account for no less than 30% of new investments.