China Tightens Rules for Local AMCs to Curb Risks in Bad-Debt Market
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China’s top financial regulator has introduced stricter rules governing local asset management companies (AMCs), in a bid to rein in risks and curb abuses in the country’s vast but loosely regulated bad-debt market.
On Tuesday, the National Financial Regulatory Administration (NFRA) issued the Interim Measures for the Supervision of Local Asset Management Companies, marking the first comprehensive update since a 2019 directive from the former banking watchdog. Effective from July 13, the new rules impose clearer business boundaries, reinforce shareholder regulations and tighten risk controls, with a transitional period of no more than three years.
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- China’s NFRA introduced stricter rules for local asset management companies (AMCs), effective July 13, 2024, with a three-year transition, to curb risks in the bad-debt market.
- New regulations set business limits, shareholder restrictions, risk controls, and ban practices like principal guarantees, buybacks, and disguised lending; exposure limits and strict oversight are mandated.
- Local AMCs dropped to 59 in 2025, facing increased competition and regulatory scrutiny, but retain a key role with smaller banks and non-financial enterprises.
- China Chengxin International Credit Rating Co. Ltd.
- China Chengxin International Credit Rating Co. Ltd. (中诚信国际信用评级有限责任公司) is a credit rating agency in China. A 2025 report by the company indicated that the number of local Asset Management Companies (AMCs) in China had decreased to 59, following the deregistration of one firm in Heilongjiang.
- 2019：
- China's former banking watchdog issued a directive governing local asset management companies (AMCs).
- 2024：
- A series of policy updates were introduced, including rules that broaden the definition of non-performing asset and allowed AMCs broader asset purchase activity. One local AMC in Heilongjiang was deregistered.
- April 2025：
- NFRA issued guidance outlining red lines for AMCs, such as banning the practice of helping local governments hide implicit debt.
- July 13, 2025：
- The new Interim Measures for the Supervision of Local Asset Management Companies, issued by the NFRA, come into effect.
- Tuesday, July 15, 2025：
- NFRA issued the Interim Measures for the Supervision of Local Asset Management Companies.
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