China Banking Regulatory Commission "looks back": implementing housing and not speculating, keeping a close eye on real estate financing.

In order to consolidate and expand the achievements of chaos rectification, and resolutely win the tough battle to prevent and resolve financial risks, China Banking Regulatory Commission issued the Notice on Looking Back on the Chaos Rectification in Banking and Insurance Markets on June 24th (hereinafter referred to as the Notice).

The China Banking Regulatory Commission said that in recent years, the chaos in China's banking and insurance markets has achieved remarkable results, the chaos in business management has been effectively curbed, the problem of funds being divorced from reality has been effectively corrected, the banking and insurance industries have returned to their original sources, and the situation of compliance and prudent operation has basically taken shape and been effectively stabilized. However, the corporate governance of some banks and insurance institutions is still not perfect, the risk management is still weak, problems in some fields have been repeatedly investigated and committed, and major cases and risk events have occurred from time to time.

In this regard, the "Notice" clearly "looks back" on the rectification of market chaos for three consecutive years, mainly in the following five aspects:

See if the main responsibility is put in place; Second, whether the real economy really benefits; Third, whether the rectification measures are strict and effective; Fourth, whether violations of laws and regulations have been significantly curbed; Fifth, whether the compliance mechanism is sound and effective.

China Banking Regulatory Commission requires that banks and insurance institutions be urged to effectively transmit inclusive finance policy dividends to private small and micro enterprises, constantly promote the reduction of comprehensive financing costs of enterprises, and severely crack down on illegal loan taking through financing policies. We will continue to investigate and deal with violations of laws and regulations in macro-policy implementation, equity and corporate governance, business operation, shadow banking and cross-financial business, and severely deal with violations of laws and regulations in the name of "financial innovation" according to law.

For the real estate industry, it is also the top priority of the CBRC to rectify the chaos in the bank insurance market. This inspection covers several major areas, from macro-policy implementation to innovative business, involving five types of financial institutions: banking, insurance, trust, financial asset management and financial leasing.

Among them, the work of "looking back" to rectify the market chaos of banking institutions in 2020 is mainly about implementing the policy of "housing and not speculating", focusing on strictly checking the funds on and off the balance sheet directly or in disguise for land transfer fees or land reserve financing; Failing to strictly examine the qualifications of real estate development enterprises and illegally providing financing for real estate development projects with incomplete "four certificates"; Personal comprehensive consumer loans, commercial loans, credit card overdrafts and other funds were diverted to purchase houses; Liquidity loans, M&A loans, operating property loans and other funds were misappropriated for real estate development; Consignment of trust products and other asset management products that violate real estate financing policies and regulations, and other above-mentioned illegal operations.

Yan Yuejin, research director of the think tank center of Yiju Research Institute, said that it can be seen from such regulations that this year's financial environment is loose-oriented, and it is really necessary to prevent illegal funds from entering the development and housing fields. The content of similar policies "looking back" may have a certain impact on various credit policies in the near future.

In addition, in this notice, the main points of "looking back" in the rectification of market chaos in non-bank institutions in 2020 were also clarified.

Among them, in the implementation of macro policies, insurance institutions should clearly focus on supervising the illegal investment of insurance funds in industries or industries prohibited by the state and supervision; Providing financing to real estate companies and real estate projects that do not meet the policy requirements in violation of regulations through equity investment and real estate investment.

It can be seen from such regulations that the inflow of insurance funds into real estate will continue to be strictly regulated in the future. Yan Yuejin believes that since last year, the investment field of insurance funds has been relaxed, so there are indeed various illegal operations objectively. Through this regulation, it is clear that the disguised blood transfusion in the form of equity investment is strictly investigated, which is also helpful to standardize the use of insurance funds objectively.

For trust companies, the outstanding field in implementing macro policies is still real estate.

The main points of this work are clear, and the supervision policy of real estate trust loans is not strictly implemented, and loans are provided to real estate development projects that do not meet the provisions of Article 432; Providing land reserve loans or working capital loans for real estate enterprises directly or in disguise; In the name of granting loans to upstream and downstream enterprises, related parties or construction parties of developers, the funds are actually used for real estate development to avoid the regulatory requirements related to real estate trust loans; Failing to strictly examine the legality and compliance of the trustee's trust purpose, and providing convenience for all kinds of funds to illegally flow into the real estate market; Manually adjust the classification of real estate business to avoid compliance requirements or scale control requirements.

Judging from the contents of this notice, there are many contents related to trust, which fully shows that trust channels are strictly regulated areas. For the real estate industry, the policy tone of "housing and not speculating" will continue, and the CBRC will continue to strictly implement the real estate trust supervision policy. In the future, real estate trust will undoubtedly be further compressed in terms of product scale, trust company flexibility and institutional arbitrage space. Yan Yuejin suggested that relevant trust companies should also actively control real estate business in the near future to prevent various regulatory risks.

In addition, financial asset management companies and financial leasing companies also mentioned the key points of illegal real estate business in the implementation of macro policies.

According to the requirements of the CBRC, the financial system should improve its political stance, deeply understand the great significance of financial support for small and medium-sized enterprises in doing the "six guarantees" work and implementing the "six guarantees" task, and grasp the organic unity of controlling chaos, preventing risks and stabilizing growth. Judging from the information conveyed in this notice, the content is comprehensive and the wording is powerful. This is not only a "looking back" review of rectifying market chaos for three consecutive years, but also sets the tone for the current chaos in the financial sector.