CBIRC's opinion-inviting rules to allow auto finance firms to set up overseas subsidiaries

Visitors view a vehicle at the booth of ORA, a sub-brand of Chinese automaker Great Wall Motors during the China Motor Show (Tianjin) 2022 in north China's Tianjin, Nov. 10, 2022.

China Banking and Insurance Regulatory Commission (CBIRC) allowed in the latest opinion-inviting rules auto finance companies to establish overseas subsidiaries, reported Xinhua Finance on Thursday.

CBIRC released the auto finance companies administration rules on December 29 and made mainly revisions of four aspects to the past rules.

In a bid to further materialize related opening up policies, the rules support China's auto industry to "go global", permitting domestic auto finance firms to set up, upon approval of CBIRC, overseas subsidiaries to provide financial services that Chinese brand automobiles need in developing overseas market.

CBIRC meant to enhance, via the rules, risk management-based supervision over auto finance companies and guide them to focus on main businesses.

In the opinion-inviting rules, CBIRC canceled equity investment business, set stricter requirements over investors and added risk management requirements such as liquidity risk supervision indicators.

To adapt to the high-quality development demand of auto industry, CBIRC put automobile accessory financing into the business scale of auto finance companies.

CBIRC also added corporate governance and internal control requirements in the rules to strengthen auto finance companies' corporate governance and internal control.