China's National Financial Regulatory Administration has unveiled the "Interim Measures for Supervision and Administration of Local Asset Management Companies," effective immediately. This landmark regulation strengthens oversight of regional bad-debt managers to enhance industry standards and bolster regional financial stability.

Comprising 45 provisions across four chapters, the framework establishes crucial operational boundaries. It mandates local AMCs to focus on core responsibilities including non-performing asset acquisitions, debt recovery, and asset disposals while imposing clear prohibitions. Companies are barred from: - Offering principal guarantees or fixed-income promises - Requiring repurchase obligations from transferors - Facilitating fake off-balance-sheet transactions to conceal bad assets - Creating hidden local government debts through financing platforms

Risk management provisions introduce stringent quantitative controls: - Single-client exposure capped at 10% of net assets - Group client exposure limited to 15% of net assets - Qualified liquid assets must cover 30-day net cash outflows - Related-party claims cannot exceed 50% of net assets - External financing restricted to 3x net asset value

Regulatory responsibilities are explicitly divided, with provincial authorities bearing primary oversight duties while the national regulator coordinates information sharing and policy alignment. This regulatory architecture implements key directives from the Central Financial Work Conference, aiming to: - Fortify supervision mechanisms - Elevate risk management standards - Enhance sustainable development foundations - Optimize regional financial risk resolution capabilities

The administration will collaborate with local regulators to ensure smooth implementation, empowering local AMCs to leverage their unique advantages in mitigating regional financial and real-economy risks.