Notice Regarding the Issuance of Measures for Managing the Guangzhou Enterprise Refinancing Service Center　　Notice Regarding the Issuance ofMeasures for Managing the Guangzhou Enterprise Refinancing Service Center 　　Sui Jin Rong [2020] No. 11To all parties concerned:　　To implement the relevant provisions ofSeveral Measures of Guangzhou Municipality for Winning the Battle Against Covid-19 and Achieving Annual Economic and Social Development Goals(Sui Fu Gui [2020] No. 2) on establishing emergency refinancing mechanisms in Guangzhou, the Guangzhou Municipal Local Financial Supervision and Administrationhas taken the lead to establish the Guangzhou Enterprise Refinancing Service Center to provide the real economy in Guangzhou with liquidity support and effectively resolve cash flow difficulties faced by enterprises. These Measures for the Management of the Guangzhou Enterprise Refinancing Service Centerare hereby issued for your due implementation. Specific problems encountered during the course of implementation should be reported to the Guangzhou Municipal Local Financial Supervision and Administration.　　Guangzhou Municipal Local Financial Supervision and Administration　　March 5, 2020　　Measures for the Management of the Guangzhou Enterprise Refinancing Service Center 　　Chapter I General Provisions　　Article 1 Pursuant to the guiding principles ofOpinions of the General Office of the State Council on Guiding the Further Stimulation of the Vitality of Effective Private Investment and Promoting Sustainable and Healthy Economic Development (Guo Ban Fa [2017] No. 39),theSeveral Policy Measures by the General Office of the Guangdong Provincial Government on Promoting High-Quality Development of the Private Economy (Yue Ban Fa [2018] No. 43), Implementation Opinions of the Guangzhou Branch of the People’s Bank of China and Four Other Departments on Strengthening Financial Support for the Development of Private Enterprises in Guangzhou,Several Policy Measures by Guangdong Province to Support the Financing of Small and Medium Enterprises(Yue Jin Jian [2019] No. 58), and Several Measures of Guangzhou Municipality for Winning the Battle Against Covid-19 and Achieving Annual Economic and Social Development Goals(Sui Fu Gui [2020] No. 2), the Guangzhou Enterprise Refinancing Service Center is established to support the development of enterprises, relieve short-term cashflow pressures and effectively prevent and address liquidity risks faced by enterprises. These Measures are enacted, in light of the realities of Guangzhou, to regulate the operations and management of the Enterprise Refinancing Service Center.　　Article 2 In these Measures, the Enterprise Refinancing Service Center (hereinafter referred to as the “Refinancing Center”) refers to the center that provides short-term loan repayment and renewal cashflow services for enterprises in Guangzhou that meet credit requirements of banks and are temporarily facing short-term cashflow difficulties due to outstanding loans.　　Article 3 These Measures shall apply to enterprises within the administrative division of Guangzhou that meet prescribed requirements applying for loan refinancing services from collaborating banks (project loans and off-balance sheet financing are not eligible). The Refinancing Center aims to provide enterprises with more efficient, more preferential, and more transparent refinancing services, and continually lower their financing costs.　　Article 4 TheGuangzhou Municipal Local Financial Supervision and Administrationwill lead and organize relevant regulatory authorities in providing policy guidance and oversight for the operations and management of the Refinancing Center, regularly receive reports on its operations, make decisions on major matters, and coordinate the resolution of major issues encountered during the course of operations.　　Article 5 In these Measures, “collaborating banks” refer to those banks that have signed collaboration agreements with the Refinancing Center and, through the Refinancing Center, provide refinancing services to enterprises to whom they have extended credit.　　Article 6 Capital used for refinancing shall be provided by collaborating institutions. In these Measures, “collaborating institutions” refer to those legal person entities that intend to provide refinancing capital to enterprises in Guangzhou and that have signed collaboration agreements with the Refinancing Center.　　Article 7 The Guangzhou Financial Development Service Center (hereinafter referred to as the “GFDSC”) is responsible for the daily operations of the Refinancing Center and performs the following duties:　　(1) Formulating implementation plans and detailed management rules, and receiving the oversight of theGuangzhou Municipal Local Financial Supervision and Administration;　　(2) Registration, verification, publication, follow-up and filing of information received by the Refinancing Center;　　(3) Sealing deals with collaborating banks and collaborating institutions;　　(4) Reporting on the operations of the Refinancing Center on a quarterly basis;　　(5) Other duties as delegated by theGuangzhou Municipal Local Financial Supervision and Administration.　　After the commencement of regular refinancing operations, the Guangzhou Enterprise Refinancing Service Center Co. Ltd. should be timely established to achieve the corporatization, marketization, and standardization of the above operations.　　Article 8 The management of refinancing operations shall abide by the principles of “government leadership, market-based operations, highlighting key aspects, pragmatism, dedicated funds for dedicated purposes, and closed-loop operations”.　　Chapter II Operating Guidelines　　Article 9 Refinancing capital shall be used by enterprises or other commercial entities within the administrative division of Guangzhou that have credit at collaborating banks and that operate in a regular manner. Specific requirements for an entity are as follows:　　(1) It must be an independent legalpersonentity registered with and paying taxes to taxation authorities in Guangzhou Municipality [including its districts, counties (county-level municipality)].　　(2) It must meet the relevant standards for medium, small and micro enterprises as defined in theNotice Regarding the Issuance of Regulations for the Classification Standards for Small and Medium Enterprises (Gong Xin Bu Lian Qi Ye [2011] No. 300).　　(3) Commercial clients should be the main partners or main natural person shareholders participating in sole proprietorships, individually-owned enterprises, partnerships, or limited liability companies that meet bank policies regarding personal business loans and have full civil legal capacity.　　(4) It must be a soundly managed entity with sound financial management systems and financial accounting systems.　　Enterprises and other commercial entities may not receive refinancing services through the Refinancing Center if they have overdue bank loans or outstanding interest on existing bank loans, or if the enterprises, their legal representatives or actual controlling persons have poor credit records or are in the midst of unsettled disputes currently before a judicial court.　　Article 10 Refinancing capital must be used for temporary cashflow purposes related to the repayment or renewal of corporate loans extended by collaborating banks, not any other purpose. Refinancing capital applied by commercial clients must be used in repaying or renewing personal business loans for regular commercial operations of enterprises.　　Article 11 The Refinancing Center shall oversee the registration, review and announcement of information received based on the principles of “transparency, fairness, and impartiality”, and allocate refinancing capital based on the market principles of “prioritizing price and time”. Interest rates on refinancing loans may not be higher than the legal cap.　　Article 12 To ensure the security of refinancing capital, the Refinancing Center may, as per actual situation, request that enterprises or commercial clients applying for refinancing capital provide corresponding guarantees.　　Article 13 The Refinancing Center will sign refinancing capital escrow agreements with collaborating banks and establish dedicated accounts at such banks, which shall be the designated escrow accounts. The Refinancing Center will make clear that such escrow accounts are the only legally accepted payment accounts for refinancing capital and shall be used solely for refinancing operations, so as to ensure that dedicated funds are used for dedicated purposes, operations are in a closed loop, and risks are segregated.　　Chapter III Collaborating Banks and Collaborating Institutions　　Article 14 Collaborating banks shall sign collaboration agreements for refinancing operations with the Refinancing Center. Before providing refinancing services, they shall provide theLetter of Commitment for Refinancing. In addition, collaborating banks shall open dedicated accounts for the Refinancing Center.　　Article 15 Collaborating institutions shall appoint professional service teams for the Refinancing Center and provide refinancing capital for the Refinancing Center from sources that meet all legal and regulatory requirements. A collaborating institution should meet the following requirements:　　(1) It must be an incorporated enterprise qualified to provide loans as per the requirements of state laws and regulations;　　(2) It must have been in continuous operation for 2 years or more;　　(3) It must have CNY 100 million or more in paid-up registered capital;　　(4) It must have sound organizational structures, internal controls and risk management systems;　　(5) It must be able to appoint a professional service team with regards to refinancing capital.　　Article 16 The Refinancing Center is responsible for due diligence and review with respect to collaborating institutions, and shall sign collaboration agreements with these institutions. The Refinancing Center shall provide collaborating institutions with credit reports on enterprises seeking refinancing as required by such institutions. Where collaborating banks are unable to renew loans as usual, the Refinancing Center shall assist collaborating institutions in communicating with collaborating banks, and complete procedures related to the mortgages and pledges of enterprises seeking refinancing.　　Article 17 The Refinancing Center, collaborating banks, and collaborating institutions are obligated to enhance public awareness of the refinancing capital to assist more enterprises in lowering their financing costs.　　Chapter IV Implementation Procedures　　Article 18 Acceptance of applications. Enterprises are required to submit applications for loan renewals and the use of refinancing capital to the original lending bank within the prescribed time period. A bank that agrees to renew the loan shall forward the application by the enterprise to the Refinancing Center.　　Article 19 Registration, announcement and designation of participating institutions. After the application by the enterprise to use refinancing capital is registered with key elements verified, the application shall be forwarded to collaborating institutions. The collaborating institution to provide such capital shall be designated based on the principles of Article 11.　　Article 20 Disbursement of funds. Collaborating institutions shall provide refinancing capital to enterprises to repay loans that are due, while collaborating banks shall complete loan renewal procedures for enterprises within the prescribed time period. Newly issued renewal loans shall be used to repay the refinancing capital that enterprises borrowed from the relevant collaborating institutions. Funds shall be disbursed through the designated special accounts opened by the Refinancing Center at the relevant collaborating banks.　　Article 21 Filing of documents. After the completion of refinancing operations, the Refinancing Center will file relevant documents for record. In principle, these documents shall be retained for no less than 3 years.　　Chapter V Oversight and Management　　Article 22 The Refinancing Center shall engage in refinancing operations in accordance with relevant laws and regulations, establish and improve accounting management systems, and make all due filings with theGuangzhou Municipal Local Financial Supervision and Administration. The Refinancing Center shall track and manage refinancing capital throughout the full process, establish early warning systems on enterprises requiring refinancing capital, stay informed of the state of relevant enterprise operations and guard against capital risks. In addition, the Refinancing Center should strictly abide by all relevant procedures when reviewing and approving applications, urge all collaborating banks to process refinancing applications as quickly as possible, and enhance efficiency of capital use.　　Article23 The Refinancing Center is subject to oversight and management by theGuangzhou Municipal Local Financial Supervision and Administration, and shall submit monthly situation briefings to the Bureau. Where loans due cannot be repaid on time, the Refinancing Center shall undertake a detailed analysis of the reasons and timely report their plans for relevant disposal.　　Article 24 Collaborating institutions shall carry out refinancing operations in accordance with relevant laws and regulations, and may not raise capital from the general public for use in refinancing operations. The collaboration agreement shall be terminated upon discovery of any act in contravention of regulations, and relevant information shall be submitted to relevant regulatory authorities, which shall take action in accordance with the law.　　Article 25 Collaborating banks shall cautiously implement enterprise loan renewal procedures, and assume responsibility for providing timely and full loan renewals to enterprises that agree to renew their loans and provide a letter of commitment. Those that fail to do so and cause failure to repay refinancing capital in time shall bear corresponding legal liabilities.　　Article 26 An applicant enterprise shall be blacklisted by the Refinancing Center upon being discovered to have obtained refinancing capital by means of false reporting, concealment of material facts, or fraud. Applications from such enterprises will no longer be considered. Acts that constitute criminal offences shall be reported to judicial authorities for further action in accordance with the law.　　Article 27 TheGuangzhou Municipal Local Financial Supervision and Administrationand other relevant authorities shall inspect and appraise the operations and performance of the Refinancing Center annually. Relevant entities or individuals found to have engaged in fraud, failed to implement sound scrutiny, or administered refinancing capital in contravention of regulatory procedures shall be dealt with in accordance with relevant regulations. Acts that are suspected of criminal offences shall be reported to judicial authorities for prosecution in accordance with the law.　　Chapter VI Supplementary Provisions　　Article 28Guangzhou Municipal Local Financial Supervision and Administrationshall be responsible for enacting, interpreting and revising these Measures.　　Article 29 These Measures shall come into force from the date of issuance. Revision procedures will be initiated, in accordance with relevant laws and regulations and based on the actual situation, in the event of policy amendments or major changes in implementation requirements.