Core Viewpoint - The newly released "Interim Measures for the Supervision and Management of Local Asset Management Companies" aims to strengthen the supervision of local asset management companies, promote healthy industry development, and better prevent and resolve regional financial and real economy risks [1][2]. Group 1: Regulatory Framework - The measures specify the operational behaviors of local asset management companies, including business scope, business ratios, operational areas, and the types of assets that can be acquired [1]. - It prohibits local asset management companies from engaging in practices such as guaranteed principal and fixed income commitments, concealing non-performing assets, and creating new hidden debts for local governments [1][2]. Group 2: Risk Management - The measures enhance risk management by setting concentration risk regulations, limiting the investment balance in equity and debt for single clients and groups to no more than 10% and 15% of net assets, respectively [1]. - Liquidity risk management is also emphasized, requiring that high-quality liquid assets held by local asset management companies must not be less than the net cash outflow expected in the next 30 days [1]. - Related party transaction regulations are established, capping the total debt balance with all related parties at 50% of the previous quarter's net assets [1]. Group 3: Funding and Supervision - Local asset management companies can raise funds through loans from financial institutions, borrowing from shareholders, and issuing bonds, but cannot accept public deposits or indirectly absorb public deposits [2]. - The balance of funds raised must not exceed three times their net assets [2]. - The measures clarify the division of regulatory responsibilities, with provincial financial management institutions being primarily responsible for supervision and risk management of local asset management companies [2].

Core Viewpoint - The introduction of the "Interim Measures for the Supervision and Administration of Local Asset Management Companies" aims to enhance the regulatory framework for local asset management companies, improve risk management, and ensure compliance within the industry [1][3]. Group 1: Regulatory Framework - The "Measures" consist of four chapters and forty-five articles, covering general principles, business operations and risk management, supervision, and supplementary provisions [1]. - The goal is to solidify the sustainable development foundation of local asset management companies and enhance their role in mitigating regional financial and real economy risks [3]. Group 2: Business Operations - The "Measures" specify the business scope, operational ratios, operational regions, and the types of assets that local asset management companies can acquire, emphasizing a focus on their primary responsibilities [3]. - It regulates the handling of non-performing assets, including debt recovery and external transfers, and sets clear operational boundaries, prohibiting practices such as guaranteed principal returns and the creation of hidden local government debts [3]. Group 3: Risk Management - The "Measures" impose strict risk management requirements, including limits on investment balances with single clients and groups, which cannot exceed 10% and 15% of the company's net assets, respectively [4]. - It mandates that local asset management companies maintain quality liquid assets to cover net cash outflows for the next 30 days and restricts total debt exposure to related parties to 50% of the previous quarter's net assets [4]. - External financing is also regulated, with a cap on borrowed funds not exceeding three times the company's net assets to prevent risk spillover [4]. Group 4: Supervision Responsibilities - The "Measures" clarify the division of supervisory responsibilities, assigning provincial financial management institutions the overall responsibility for supervising local asset management companies and managing risks [4]. - The financial regulatory authority and its local branches are tasked with enhancing information sharing and collaboration to guide the industry towards standardized and healthy development [4].

Core Viewpoint - The article discusses the implementation of the "Interim Measures for the Supervision and Administration of Local Asset Management Companies" by the Financial Regulatory Bureau, aimed at standardizing the operations of local asset management companies (AMCs) and enhancing their focus on core responsibilities while effectively serving local needs [1][2]. Regulatory Framework - The new measures are a significant step in establishing a unified regulatory framework for local AMCs, addressing previous issues of fragmented management and regulatory oversight [3][4]. - The provincial financial management institutions are designated as the primary supervisory bodies for local AMCs, ensuring accountability and coordination with the Financial Regulatory Bureau [4]. Business Scope and Restrictions - The measures delineate the business scope for local AMCs, allowing them to engage in the acquisition, management, and disposal of non-performing assets, while prohibiting activities outside this scope [7][8]. - Five key operational restrictions are established, including prohibitions against guaranteeing principal and fixed returns, facilitating false reporting for financial institutions, and engaging in illegal debt recovery practices [9][10]. Risk Management Requirements - The measures introduce specific risk management requirements, including limits on concentration risk, liquidity risk, and related party transactions [11][12][14]. - Local AMCs are required to maintain a minimum level of high-quality liquid assets to cover net cash outflows for the next 30 days [13]. Industry Outlook - The importance of local AMCs is highlighted, with projections indicating that the scale of non-performing asset management will reach RMB 16,877 billion by 2029, with a compound annual growth rate of 14.8% from 2024 to 2029 [6].

Core Viewpoint - The introduction of the "Interim Measures for the Supervision and Management of Local Asset Management Companies" aims to enhance supervision, promote healthy industry development, and mitigate regional financial and economic risks [1][3]. Group 1: Regulatory Framework - The "Measures" consist of four chapters and forty-five articles, covering general principles, business operations and risk management, supervision, and supplementary provisions [2]. - The framework specifies the operational behaviors of local asset management companies, including business scope, operational areas, and asset acquisition limits, to ensure they focus on their primary responsibilities and effectively serve local needs [2]. Group 2: Risk Management - The "Measures" establish concentrated risk management requirements, limiting the financing balance for single clients and groups to 10% and 15% of the company's net assets, respectively [2]. - Liquidity risk management is defined, mandating that local asset management companies maintain quality liquid assets to cover net cash outflows for the next 30 days [2]. - Regulations on related party transactions are set, capping the total debt to related parties at 50% of the company's net assets [2]. Group 3: Supervision Responsibilities - The provincial financial management institutions are designated as responsible for the supervision and risk management of local asset management companies within their jurisdictions [2]. - The financial regulatory authority will enhance information sharing and collaboration with local institutions to guide the industry towards standardized and healthy development [2][3].

Core Viewpoint - The National Financial Supervision Administration has released the "Interim Measures for the Supervision and Administration of Local Asset Management Companies," which delineates operational boundaries for local asset management companies [1] Group 1 - The measures specify that local asset management companies are prohibited from engaging in practices such as guaranteed principal returns and fixed income commitments [1] - The regulations also forbid these companies from requiring transferors to assume repurchase obligations or assisting financial institutions in concealing non-performing assets [1] - Additionally, the measures restrict local asset management companies from providing financing channels that would lead to the creation of new hidden debts for local governments [1]