SGG: Interim Measures for the Administration of Online Small Loan Business (Draft for Comments)

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Interim Measures for the
Administration of Online Small Loan Business
(Draft for Comments)
*

 

According to an announcement of the China Banking and Insurance Regulatory Commission and the
People’s Bank of China on the Interim Measures for the Administration of Online Small Loan Business
(Draft for Comments)
, the public can send their comments to: phjrb_gzyc@cbirc.gov.cn.
The deadline for comments is: December 2, 2020.**

**If you would like to stay anonymous, you are welcome to send your comments to
the China Guiding Cases Project (contactcgcp@law.stanford.edu) by November 30, 2020.
We will put all the comments together and send them to phjrb_gzyc@cbirc.gov.cn
in the name of the China Guiding Case Project.

Meanwhile, check out this one-minute survey (two questions only) here

 

Chapter I General Provisions

Article 1 [Purpose and Basis of Formulating [these Measures]]

These Measures are formulated in accordance with the Company Law of the People’s Republic of China, the Regulation of the People’s Republic of China on the Administration of Company Registration, and other laws and regulations to regulate the online small loan business of small-loan companies, avoid the risks of online small loan business, protect the legal rights and interests of small-loan companies and [their] customers, and promote the healthy development of online small loan business.

Article 2 [Basic Definition]

The term “online small loan business” as stated in these Measures refers to a small loan business [operated by] a small-loan company, which analyzes and evaluates the credit risks of borrowers, determines loan methods and limits, and completes online various processes (including loan application, risk review, loan approval, loan issuance, and loan recovery) by using big data, cloud computing, mobile Internet, and other technical means, and by applying endogenous data information about customer management, online consumption, and online transactions accumulated on an Internet platform as well as other data information obtained through legal channels.

The online small loan business operated by a small-loan company should be mainly conducted in the provincial administrative region of [the company’s] place of registration.  Without the approval of the banking supervision and administration institution of the State Council,1 a small-loan company must not conduct an online small loan business across provincial administrative regions.

Article 3 [Functional Positioning]

In issuing online small loans, a small-loan company should follow the principles of small amounts and decentralization, conform to national industrial policies and credit policies, and mainly serve small and micro- enterprises, farmers, urban low-income people, and other key service targets of inclusive finance, so as to put into practice the concept of inclusive finance, support the development of the real economy, and make full use of the channel and cost advantages of online small loans.

Article 4 [Regulatory System]

The banking supervision and administration institution of the State Council shall formulate the supervision and administration system as well as operation and management rules for the online small loan business of small-loan companies, and shall supervise and guide the financial supervision and administration departments determined by the people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government (hereinafter referred to as the “supervision and administration departments”) to carry out supervision and administration as well as risk treatment of online small loan business.

The supervision and administration departments shall be responsible for the review and approval, supervision and administration, and risk treatment of the online small loan business of small-loan companies.

For very few small-loan companies that have to conduct online small loan business across provincial administrative regions, the banking supervision and administration institution of the State Council shall be responsible for their review and approval, supervision and administration, and risk treatment.

 

Chapter II Business Access

Article 5 [Approval In Accordance With Law]

The operation of an online small loan business by a small-loan company should be approved, in accordance with law, by a supervision and administration department.  Where a supervision and administration department intends to approve a small-loan company to operate an online small loan business, recordation with the banking supervision and administration institution of the State Council should be made at least 60 days in advance.

The operation of an online small loan business across provincial administrative regions by a small-loan company should be approved, in accordance with law, by the banking supervision and administration institution of the State Council.

Without the approval of a supervision and administration department or the banking supervision and administration institution of the State Council, no entity or individual may operate an online small loan business, unless provided otherwise by laws or administrative regulations.

Article 6 [License]

The supervision and administration department or the banking supervision and administration institution of the State Council shall issue, in accordance with law, a license for operating an online small loan business to the small-loan company that it approves to operate an online small loan business and shall make an announcement.

A license for operating an online small loan business is valid for three years from the date of issuance.  A small-loan company that intends to continue engaging in the business after the expiration of [its] license for operating an online small loan business should, within 90 days before the expiration,2 submit an application for renewal to the department that issued the license.  Where the department that issued the license approves the renewal, the validity period of each renewal is three years.  Where a small-loan company does not submit an application for renewal, the department that issued the license shall cancel the company’s license for operating an online small loan business after the expiration date and shall urge it to properly clear the existing business in accordance with law.

Article 7 [Access Conditions]

A small-loan company operating an online small loan business should meet the following conditions:

(1) has articles of association that conform to the provisions of the Company Law of the People’s Republic of China;

(2) has registered capital that conforms to the provisions of these Measures;

(3) has controlling shareholders that conform to the provisions of these Measures;3

(4) the controlling shareholders, actual control persons, and the ultimate beneficiaries have no criminal records of intentional or major faults;

(5) the directors, supervisors, and senior management personnel have both the professional knowledge and finance-related working experience required to perform their duties, have no criminal records of intentional or major faults, and have no records of major violations of laws or regulations or records demonstrating their lack of integrity in the last five years;

(6) principal shareholders4 have good credit records and have no records of major violations of laws or regulations in the last three years;

(7) has a sound organizational structure as well as internal control and risk management systems;

(8) has business premises, an Internet platform, a business system, and technical capabilities that conform to the provisions of these Measures;

(9) has anti-money laundering and anti-terrorist financing management measures that meet the requirements of laws and regulations;

(10) other conditions prescribed by the banking supervision and administration institution of the State Council.

Article 8 [Controlling Shareholder]

The controlling shareholder of a small-loan company operating an online small loan business should meet the following conditions:

(1) it is an enterprise legal person established in accordance with law, and its main business is to provide products or services suitable for online small loans;

(2) its financial status is good and, in the last two fiscal years, it has been continuously profitable and the total tax paid was not less than RMB 12 million (on the basis of consolidated accounting statements);

(3) its capital contribution to the company is not more than 35% of the company’s net assets in the previous fiscal year;

(4) it has a clear development strategy and plan for the online small loan business;

(5) it promises not to transfer, within five years, the company’s equity that it holds (except for transfers ordered, in accordance with law, by the supervision and administration departments or judicial departments) and states [this promise] in the company’s articles of association;

(6) other conditions prescribed by the banking supervision and administration institution of the State Council.

Article 9 [Internet Platform]

The Internet platform used by a small-loan company operating an online small loan business should meet the following conditions:

(1) the subject operating the Internet platform should be an enterprise legal person established in accordance with law and has fulfilled the recordation formalities of Internet information services;

(2) the subject operating the Internet platform holds at least 5% of the shares of the small-loan company;

(3) the place of registration of the subject operating the Internet platform and the place of registration of the small-loan company are in the administrative region of the same province, autonomous region, or municipality directly under the Central Government;

(4) it has been in operation for at least two years, and, in the last two years, has had no records of violations of laws or regulations in various departments, including market regulation, Internet information, taxation, telecommunications, public security, and courts;

(5) it has customer groups that meet the needs for carrying out online small loans;

(6) it is able to accumulate endogenous data information about customer management, consumption, and transactions for evaluating the credit risks of customers;

(7) the scope of its main business does not include financial business;

(8) other conditions prescribed by the banking supervision and administration institution of the State Council.

After the small-loan company obtains a license for operating an online small loan business, the subject operating the Internet platform should promptly fulfill, at the provincial-level telecommunications department in the jurisdiction, the formalities for changing the recordation of Internet information services.

Article 10 [Registered Capital]

The registered capital of a small-loan company operating an online small loan business shall not be less than RMB 1 billion and shall be in the form of a one-time paid-in monetary capital.  The registered capital of a small-loan company operating an online small loan business across provincial administrative regions shall not be less than RMB 5 billion and shall be in the form of a one-time paid-in monetary capital.

 

Chapter III Business Scope and Basic Rules

Article 11 [Business Scope]

Where a small-loan company operates an online small loan business, it may, with the approval of the supervision and administration department, operate some or all of the following business activities in accordance with law.  After obtaining a license for operating an online small loan business, [the company] shall, in accordance with law, apply to make changes to its company registration, listing in the scope of operation:

(1) issuance of online small loans;

(2) intermediary services related to loan business such as financing advisory and financial consulting.

Where a small-loan company operates an online small loan business, and the company has better operation and management, stronger ability to control risks,5 and  regulatory evaluation that meets certain standards, it may, with the approval of the supervision and administration department, operate some or all of the following business activities in accordance with law.  After obtaining a license for operating an online small loan business, [the company] shall, in accordance with law, apply to make changes to its company registration, listing in the scope of operation:

(1) development of an asset-based securitized business by using online small loans issued by this company as the basic assets;

(2) issuance of bonds;

(3) other business activities in which [the company] may engage as prescribed by the banking supervision and administration institution of the State Council.

Article 12 [External Financing]

For a small-loan company operating an online small loan business, the balance of funds received through bank loans, shareholder loans, and other unstandardized financing forms must not exceed one times the company’s net assets, and the balance of funds received by issuing bonds, asset-based securitized products, and other standardized credit assets must not exceed four times the company’s net assets

The banking supervision and administration institution of the State Council may, together with the People’s Bank of China, adjust the index for limiting the ratio of the external financing balance to net assets of a small-loan company operating an online small loan business.

Article 13 [Loan Amount]

A small-loan company operating an online small loan business should reasonably determine the loan amount and term, based on a borrower’s income level, overall liabilities, asset status, and other factors, so that the borrower’s repayment amount per installment is not beyond his6 repayment ability.

In principle, the balance of a natural person’s single account for online small loans must not exceed RMB 300,000 and must not exceed one-third of [the person’s] average annual income in the last three years.  The lower of these two amounts is the maximum loan amount.  In principle, the balance of a single account of a legal person or other organization and their related parties7 for online small loans must not exceed RMB 1 million.

Article 14 [Use of Loans]

A small-loan company should clearly agree with a borrower on the use of a loan and monitor the use of the loan in accordance with the stipulations in the contract.  The use of the loan should conform to laws and regulations as well as national macro-control and industrial policies.  Online small loans must not be for the following uses:

(1) engaging in investments in bonds, stocks, financial derivatives, asset management products, etc.;

(2) purchasing houses and repaying mortgage loans for houses;

(3) other uses prohibited by laws and regulations, the banking supervision and administration institution of the State Council, or the supervision and administration departments.

Article 15 [Joint Loans]

Where a small-loan company operating an online small loan business conducts a business of offering loan assistance or joint loans, [the company] should conform to relevant business rules formulated by financial administration departments and meet the following requirements:

(1) where [the company] mainly serves as a fund provider in collaboration with an institution to conduct a loan business, [the company] must not outsource core business such as credit review and risk control, must not provide to an institution without lending business qualifications funds for issuing loans, or jointly fund loans with such an institution, and must not accept credit enhancement services or disguised credit enhancement services such as “commitments to covering the basics”8 provided by an institution without guarantee qualifications

(2) where [the company] mainly serves as an information provider in collaboration with an institution to conduct a loan business, [the company] must not intentionally provide false information to the collaborating institution, must not lead borrowers to have excessive debts or borrow multiple loans, and must not help the collaborating institution circumvent regulatory provisions such as those regulating remote operations;

(3) in a single joint loan, the proportion of capital contribution of a small-loan company operating an online small loan business must not be less than 30%;

(4) other requirements prescribed by the banking supervision and administration institution of the State Council.

Article 16 [Credit Investigation System]

A small-loan company operating an online small loan business should be connected to the basic database of financial credit information9 and other credit investigation systems, and may also be connected to the personal credit investigation institutions established with approval from the People’s Bank of China and the enterprise credit investigation institutions recorded with [the bank].  [The company] shall submit, search, and use relevant credit information in accordance with law.

Article 17 [Registration System]

Where a small-loan company issues an online small loan, it should, within five working days after the loan is issued, register in the relevant national registration system for online small loans the amount, region, borrower, and other information about the online small loan issued, and should, within five working days after the registered information is changed, update the registered information.

Article 18 [Prohibited Business Activities]

A small-loan company operating an online small loan business must not conduct the following business activities:

(1) accepting or accepting in disguise public deposits;

(2) selling or transferring, through Internet platforms or various local trading venues, credit assets of the company other than non-performing credit assets;

(3) issuing or selling as an agent asset management products such as wealth management and trust plans;

(4) handling offline business if it is a small-loan company operating an online small loan business across provincial administrative regions;

(5) other business activities prohibited from being engaged in by laws and regulations, the banking supervision and administration institution of the State Council, or the supervision and administration departments.

 

Chapter IV Operation and Management

Article 19 [Corporate Governance]

A small-loan company operating an online small loan business should improve its corporate governance mechanism.  Directors, supervisors, and senior management personnel [of the company] should strengthen [their] sense of performing duties and earnestly undertake corresponding management duties.  Senior management personnel, such as general managers and deputy general managers, as well as persons in charge of key management positions, such as risk control, operations, and financial departments, must be full-time [personnel] and work in the company’s place of registration.

Article 20 [Equity Management]

For the same investor, its related parties, and concerted actors,10 the number of small-loan companies operating an online small loan business across provincial administrative regions in which [these parties] participate as principal shareholders must not exceed   two; otherwise the number of small-loan companies operating an online small loan business across provincial administrative regions in which [these parties] have controlling shareholding [interest] must not exceed one.

Entrusting others or accepting the entrustment of others to hold the equity of a small-loan company operating an online small loan business is prohibited.

Article 21 [Fund Management]

A small-loan company operating an online small loan business should strengthen [its] fund management, implement special account management for loan funds (including its owned funds and external funds), and all funds must be put in a single special loan account before loans are issued.  The special loan account must have the capability to deposit and withdraw funds to support the online small loan business.  The small-loan company should report the special loan account to the supervision and administration department, and, in accordance with the department’s requirements, regularly provide operation reports of the special loan account and details regarding the flow of funds in the special loan account issued by the bank that opened the account.

Article 22 [Business System]

A small-loan company operating an online small loan business should use an independent business system and the system should conform to the following conditions:

(1) loan application, [loan] evaluation, [loan] approval, signing of contracts, loan issuance, loan collection, advisory [services], complaints, and other business can be operated online through the business system;

(2) has a sound risk prevention and control system (including a data-driven risk control model, an anti-fraud system, a risk identification mechanism, risk monitoring methods, risk treatment measures), and the evaluation, prevention, and control of credit risks of customers mainly rely on endogenous data information from the Internet platform;

(3) conform to the requirements of network and information security management, and has complete network security facilities and a management system, including firewalls, intrusion detection, data encryption, emergency response plans, and disaster recovery, to ensure the safe and stable operation of the system and various information security;

(4) other conditions prescribed by the banking supervision and administration institution of the State Council.

Article 23 [Disclosure of Information]

A small-loan company operating an online small loan business should strengthen disclosure of information and publish the following information on the platform used for releasing products:

(1) the company’s basic information, including business license, company address, basic information about the company’s legal representative and senior management personnel, telephone numbers for business advisory [services] and complaints;

(2) detailed descriptions of relevant products provided by the company, including service content, levels of loan interest rates and standards for fee items, methods for calculating interest and for repaying principal and interest, and methods for handling overdue loans;

(3) supervision and reporting telephone numbers of the supervision and administration departments of all levels.

Where the above information is changed, [the company] should update the original, disclosed information within seven days after the change.

Article 24 [Consumer Protection]

A small-loan company operating an online small loan business should, in accordance with laws and regulations as well as relevant requirements of the banking supervision and administration institution of the State Council and the supervision and administration departments, do a good job in protecting the rights and interests of financial consumers.  In handling the business, [the company] should follow the principle of openness and transparency, fully fulfill the obligation of notification, make borrowers clearly understand such content as the loan amount, term, price, and repayment method, and specify the content in contracts.  [The company] is prohibited from inducing borrowers to take on excessive debts.  It is prohibited from collecting loans through violence, intimidation, insults, defamation, or harassment.  It is prohibited from collecting, storing, and using customer information without authorization or consent.  It is prohibited from illegally trading or disclosing customer information.

Article 25 [Anti-Money Laundering and Anti-Terrorist Financing]

A small-loan company operating an online small loan business should, in accordance with relevant legal provisions, carry out anti-money laundering and anti-terrorist financing work, and adopt various measures, including customer identification,  preservation of customer identification information and transaction records, reporting of large-amount transactions and suspicious transactions, so as to effectively avoid money laundering and terrorist financing risks.

 

Chapter V Supervision and Administration

Article 26 [Formulation of Administration System]

A small-loan company operating an online small loan business should, in accordance with relevant provisions of the supervision and administration departments, establish a sound corporate governance structure and an internal control system, formulate business operation rules, and establish a comprehensive and effective risk management system.

Article 27 [Submission of Reports]

A small-loan company operating an online small loan business should, in accordance with relevant provisions, submit to the supervision and administration department such financial accounting statements, statistical statements, and other materials that are related to [the company’s] online small loan business, and submit to the People’s Bank of China relevant statistical information.  The supervision and administration department should, in accordance with requirements, submit to the banking supervision and administration institution of the State Council and the People’s Bank of China statistical data and status reports about the online small loan business of small-loan companies in the [administrative] region [of the department].

Article 28 [Report of Major Risks]

When major risks (especially cross-regional risks) arise in the operation of an online small loan business, the small-loan company [operating the business] should report them to the supervision and administration department in a timely manner.  The supervision and administration department should establish a mechanism for early warning, avoidance, and treatment of major risks, promptly treat major risk events, and report to the banking supervision and administration institution of the State Council and the People’s Bank of China.

Article 29 [Administration of Qualifications]

Where after obtaining a license for operating an online small loan business, a small-loan company operating an online small loan business ceases, without proper reasons, its normal issuance of online small loans for at least six months, the department that issued [the company’s] license for operating an online small loan business shall revoke it.

Article 30 [Administration of Anti-Money Laundering and Anti-Terrorist Financing]

A small-loan company operating an online small loan business should register, through the Internet financial network monitoring platform for anti-money laundering and anti-terrorist financing, with the People’s Bank of China [the company’s] duty regarding anti-money laundering, accept the anti-money laundering supervision and administration work legally carried out by the People’s Bank of China and its branches, and cooperate with relevant departments in their anti-money laundering and anti-terrorist financing work.

Article 31 [Self-Regulation]

A small-loan company operating an online small loan business may voluntarily join the China Micro-credit Companies Association,11 National Internet Finance Association of China,12 and other industry self-regulatory organizations, and [thereby] accept self-regulation.

 

Chapter VI Legal Liability

Article 32 [Operation without Approval]

Any organization or individual that operates an online small loan business without the approval of the supervision and administration department shall be banned or ordered to cease the [business] operation by the supervision and administration department and shall be punished in accordance with laws and regulations.  If a crime is constituted, criminal liability shall be investigated in accordance with law.

Article 33 [Liability of Institutions]

Where a small-loan company operating an online small loan business violates laws, regulations, or the provisions of these Measures, the supervision and administration department shall order [the company] to make corrections within a certain time period and shall impose a penalty in accordance with laws and regulations.  If a crime is constituted, criminal liability shall be investigated in accordance with law.  If [the company] does not make corrections within the specified time period or the circumstances are serious, [the company] shall be ordered, in accordance with laws and regulations, to suspend business for rectification, or its license for operating an online small loan business shall be revoked.

Article 34 [Liability of Personnel]

Where a small-loan company operating an online small loan business is punished in accordance with laws and regulations, the supervision and administration department may, in accordance with specific circumstances, issue a warning to relevant personnel who are liable, or impose a penalty in accordance with laws and regulations, if the circumstances are serious.  If a crime is constituted, criminal liability shall be investigated in accordance with law.

Article 35 [Liability of Regulatory [Personnel]]

The staff of the supervision and administration departments who, in their supervision and administration work, abuse their power, neglect their duties, or engage in malpractice for personal gain, shall be punished in accordance with law.  If a crime is constituted, criminal liability shall be investigated in accordance with law.

 

Chapter VII Supplemental Provisions

Article 36 [Retroactivity]

A small-loan company that has been engaged in an online small loan business, with the approval of the supervision and administration department,  before the implementation of these Measures should fully meet all the requirements of these Measures within one year from the date of implementation of these Measures. The supervision and administration department should, in accordance with these Measures, re-examine and approve [the company’s] qualifications for operating its online small loan business.

Article 37 [Rectification of Existing Cross-Regional Business]

A small-loan company that has been engaged in an online small loan business across provincial administrative regions without the approval of the banking supervision and administration institution of the State Council should fully meet all the requirements of these Measures within the transitional period prescribed by these Measures.  Those that still do not conform to the provisions of these Measures after the [transitional] period must not conduct new online small loan business across provincial administrative regions.

The transitional period referred to in the preceding paragraph shall be three years from the date of implementation of the Measures.  A small-loan company that does not obtain, within the transitional period, the qualifications for operating an online small loan business across provincial administrative regions should control its balance of online small loans across provincial administrative regions and its number of loan accounts so that they are within the existing scale, and reduce them in an orderly manner [so they are] gradually cleared.

Article 38

With respect to small-loan companies operating online small loan business across provincial administrative regions, the banking supervision and administration institution of the State Council shall conduct, in accordance with law, supervision and administration and may adopt supervision and administration measures stated in these Measures.

Article 39 [Meanings of Terms]

The meanings of the following terms used in these Measures:

(1) “Controlling shareholder” refers to a shareholder whose capital contribution accounts for at least 50% of the total capital of a limited liability company, or whose shareholding accounts for at least 50% of the total equity of a joint stock company; or a shareholder whose capital contribution or shareholding is under 50%, but the voting rights enjoyed by it as a result of its capital contribution or shareholding are sufficient to create significant influence on the resolutions of the shareholders’ meetings and shareholders’ general meetings.

(2) “Principal shareholder” refers to a shareholder who holds or controls at least 5% of the company’s shares or voting rights, or who holds under 5% of the total capital or total shares but has significant influence on the company’s operation and management.

(3) “Related parties” refers to [parties in situations where] “one party controls, jointly controls, or exerts significant influence on the other party; or two parties or at least two parties13 are controlled, jointly controlled, or significantly influenced by one party”, as provided for in the Accounting Standards for Enterprises No. 36—Disclosure of Related Parties.  However, state-controlled enterprises do not have “related” relationships with each other merely because they are controlled by the State.

(4) “Concerted action”, refers to an act of or a fact about investors who, through an agreement or other arrangements, jointly increase the quantity of voting rights in a company’s shares at their disposal that they can control.  Relevant investors who have agreed to a concerted action are concerted actors.

Article 40 [Numerical Relationships]

[Any numerical expression beginning with] the term “at least”14 or “within”, as stated in these Measures, includes the [stated] number, and [that beginning with] the term “over” or “under” excludes the [stated] number.

Article 41 [Matters Not Covered]

Matters not covered in these Measures shall be implemented in accordance with the Measures for the Supervision and Administration of Small-Loan Companies (to be issued) and other relevant regulations.

Article 42 [Power of Interpretation]

These Measures shall be interpreted by the banking supervision and administration institution of the State Council.

Article 43 [Effective Date]

These Measures shall come into effect on the date of issuance.


* The citation of this Stanford CGCP Global Guide™ is: Interim Measures for the Administration of Online Small Loan Business (Draft for Comments), People’s Republic of China, Stanford CGCP Global Guide, Nov. 2020, http://cgc.law.stanford.edu/sgg-on-prc-interim-measures-online-small-loan-business.  For the original, Chinese version of the Draft Interim Measures, see 中国银保监会、中国人民银行关于《网络小额贷款业务管理暂行办法(征求意见稿)》公开征求意见的公告 (Announcement of the China Banking and Insurance Regulatory Commission and the People’s Bank of China on Seeking Public Comments on the Interim Measures for the Administration of Online Small Loan Business (Draft for Comments)), www.gov.cn, Nov. 3, 2020, http://www.gov.cn/xinwen/2020-11/03/content_5556884.htm.

This English translation of the Draft Interim Measures was prepared by Dr. Mei Gechlik; it was finalized by her and Jennifer Ingram.  Minor editing, such as splitting long paragraphs, adding a few words included in square brackets and boldfacing the headings, was done to make the piece more comprehensible to readers.  The translated text is otherwise a direct translation of the original text released by the China Banking and Insurance Regulatory Commission and the People’s Bank of China.

1 The original text reads “国务院银行业监督管理机构” and is translated herein literally as “the banking supervision and administration institution of the State Council”.  For example, the English name of “国务院国有资产监督管理委员会” is “the State-owned Assets Supervision and Administration Commission of the State Council” (emphasis added), as stated on the commission’s website, http://www.sasac.gov.cn.

It is worth noting that the English name of “中国银行保险监督管理委员会” is “China Banking and Insurance Regulatory Commission” (emphasis added), as shown on the commission’s website, https://www.cbirc.gov.cn.  Apparently, the word “Regulatory” (“监管”) is used to translate the short form of “监督管理”, i.e., “监管”.  To help non-Chinese readers understand what the original text is, the literal translation is used here.

2 For an explanation of how to interpret numerical expressions accompanying such words as “at least”, “within”, “exceed”, or “under”, see Article 40.

3 For the definition of this term, see Article 39.

4 For the definition of this term, see Article 39.

5 The expressions “better” and “stronger” seem to be written in comparison with those small-loan companies mentioned in the preceding paragraph, which prescribes a narrower scope of operation.

6 The terms “he”, “him”, and “his” as used herein are, unless the context indicates otherwise, gender-neutral terms that may refer to “she”, “her”, “it”, and “its”.

7 For the definition of this term, see Article 39.

8 The original text reads “兜底承诺” and is translated here literally as “commitments to covering the basics”.  To avoid confusion, the term should be clearly explained in the final version of these Measures.

9 The original text reads “金融信用信息基础数据库” and is translated here literally as “the basic database of financial credit information”.  The establishment, operation, and maintenance of the database is overseen by the Credit Reference Center (中国人民银行征信中心) of the Poeple’s Bank of China.  For more information about the database, see the Credit Reference Center’s webpage, at http://www.pbccrc.org.cn/zxzx/zxgk/gywm.shtml.

10 For the definition of this term, see Article 39.

11 The name “中国小额贷款公司协会” is translated here as the “China Micro-credit Companies Association” in accordance with the English name appearing on the association’s website, http://www.china-cmca.org.

12 The name “中国互联网金融协会” is translated here as the “National Internet Finance Association of China” in accordance with the English name appearing on the association’s website, http://www.nifa.org.cn.

13 The original text reads “两方或两方以上” (“two parties or at least two parties”).  It is not clear why this redundant expression is used, as the expression could be “两方以上” (“at least two parties”).

14 The original text reads “以上” (“above”) but is translated herein as “at least” in accordance with the intended meaning of the Chinese term as explained in this provision.