Author

Li Youxing

General Director of Zhejiang Internet Finance Federation

Professor and doctoral supervisor at Guanghua Law School of Zhejiang University

Accelerating local financial legislation and providing legal protection for local financial supervision are important measures to implement the spirit of the instructions of the Party Central Committee and the State Council and the work requirements of the provincial party committee and provincial government. General Secretary Xi Jinping emphasized at the Fifth National Financial Work Conference in 2017 that the current problems of inadequate supervision in the financial field are related to systemic problems such as imperfect financial supervision coordination mechanisms, unclear supervisory responsibilities, cross-supervision, and supervisory gaps. question related. To promote the construction of a modern financial regulatory framework, implement financial regulatory responsibilities, and strengthen financial regulation, we must centralize, unify, coordinate and cooperate, and cannot sing their own tune. The "Several Opinions on Serving the Real Economy, Preventing and Controlling Financial Risks and Deepening Financial Reform" issued by the Central Committee of the Communist Party of China and the State Council further proposed to "improve the division of financial regulatory responsibilities between the central and local governments and give local governments financial regulatory responsibilities." Small loan companies, financing guarantee companies, regional equity markets, pawn shops, financial leasing companies, commercial factoring companies, local asset management companies, etc., are supervised by local financial regulatory authorities. Strengthen the supervision of local financial regulatory authorities over investment companies, farmer cooperatives that carry out credit mutual assistance, social crowdfunding institutions, and various local trading venues within their jurisdiction. ”It can be said that under the premise of insisting that finance belongs to the power of the central government, giving a certain limit and scope of financial supervision power to local governments has become a natural move for our country to respond to financial development changes and prevent local financial risks. After years of exploration and development, my country's local financial supervision has achieved some phased achievements. Under the unified leadership of the central government, the powers of central and local financial supervision have been initially divided, the financial supervision functions of local governments have been gradually integrated, and the local coordination office of the Financial Commission has been established. mechanism, marking the initial formation of my country’s local financial regulatory framework.

Zhejiang Province actively implements The Party Central Committee and the State Council made major decisions and arrangements. At the province-wide financial work conference held in November 2017, Secretary Che Jun of the Zhejiang Provincial Party Committee emphasized the need to speed up provincial-level local financial legislation and study and formulate the "Zhejiang Provincial Local Financial Regulations." Governor Yuan Jiajun pointed out that it is necessary to implement local financial supervision responsibilities and improve the local financial supervision system; to further clarify the supervision objects, in addition to the 7+4 types of institutions required to be supervised by the central government, Zhejiang will also add private lending, which together is "7+4" +1”;Further clarify regulatory responsibilities and establish a unified and centralized management working mechanism; accelerate the promotion of local financial legislation and strengthen legal protection. Under the strong leadership of the Provincial Party Committee and the Provincial Government, Zhejiang Province quickly launched the preliminary research, on-site investigation and legislative work on the "Zhejiang Provincial Local Financial Regulations". As a pioneer province in the country's financial reform, Zhejiang Province promulgated the country's first local regulations on private lending in 2014, the "Wenzhou Municipal Private Financing Management Regulations". In the process of years of financial reform and development, Zhejiang Province has accumulated rich practical experience and theoretical knowledge. The introduction of the "Zhejiang Province Local Financial Regulations" is undoubtedly a comprehensive review and legal expression of Zhejiang Province's financial reform practical experience over the years.

"Zhejiang Province Local Finance The Regulations are based on the dual goals of preventing and resolving regional financial risks and promoting financial development, taking into account the overall situation of local financial risk prevention and development. On the one hand, we must guard against risks, stick to the bottom line, and ensure stability. Strengthen local financial supervision and management, prevent and resolve financial risks, and maintain regional financial stability; on the other hand, we must promote development and focus on standardization and quality. Actively promote the healthy development of local finance, promote the standardized development of the financial industry, enhance the strength and quality of the financial industry, and guide financial services to the real economy. The "Local Financial Regulations of Zhejiang Province" fully empowers local governments and local financial work departments, gives full play to the advantages of local governments in local financial development and supervision, and promotes the crackdown on illegal fund-raising, illegal financial activities, illegal financial institutions, etc., in a timely and reliable manner Dealing with financial risks. From this perspective, the "Local Financial Regulations of Zhejiang Province" are named "Local Financial Regulations" instead of "Local Financial Supervision and Administration Regulations". It is precisely because Zhejiang Province has made full use of local legislative resources and promoted supervision through supervision. A powerful reflection of the development of legislative ideas.

In legislative principles, The "Local Financial Regulations of Zhejiang Province" adhere to five principles: First, it must reflect the essential laws of finance and reflect the professional and technical requirements of financial business. The second is to reflect the specific practices of Zhejiang and meet the economic and social development needs of Zhejiang Province. The third is to absorb existing experience and fully draw on the beneficial experience of local financial legislation in Shandong, Hebei, Sichuan, Shanghai and other provinces and cities. The fourth is to combine the thickness and thickness of the clauses. If it is suitable, it should be detailed, if it is suitable, it should be thick. Fifth, it is necessary to reflect the requirements of the new era, support the application of emerging technologies such as cloud computing, big data, artificial intelligence, and blockchain in the fields of financial services and financial supervision and management, and establish and improve supervision and management systems and new financial risks that are compatible with innovation. Prevention and control mechanism.

In addition, "Zhejiang Province The Local Financial Regulations also focus on resolving six major relationships in local financial legislation: First, the relationship between local governments and the central government. Finance is mainly the power of the central government, and local governments, under the unified leadership of the central government, give full play to their own initiative and actively implement local responsibilities; the second is the relationship between supervision and development. The regulations use various institutional innovations to achieve an organic balance and organic combination between strengthening supervision and promoting development; the third is the relationship between financial services for the real economy and the development of finance itself. The two must form a benign and healthy relationship, and finance must strive to meet every demand link of the real economy; the fourth is the relationship between innovation and risk. While the regulations actively encourage and support innovation, they must also maintain the bottom line of risk. Risks cannot be caused by over-innovation, nor can they be afraid to innovate because of overemphasis on risk prevention. The fifth is to unify the relationship between concentration and decentralization. On the premise that the leadership of the provincial people's government coordinates the overall development and supervision of local finance and is the first person responsible for risk management, the Regulations stipulate the respective needs of relevant provincial departments, local financial supervision departments, governments at all levels and their local financial work departments. The responsibilities should be decomposed to form a regulatory synergy by clarifying responsibilities; sixth, the relationship between legislation and institutional reform. Legislation involves the clarification and implementation of functions and is closely related to institutional reform and the "three determinations" plan. Legislative work and institutional reform work must be organically integrated.

Local finance has a distinctive Due to territorial characteristics, the development of local finance mainly relies on local economic and social conditions, and the risk prevention of local finance mainly relies on various local resource conditions. In fact, only based on their advantages in local knowledge and their familiarity with the conditions in their operating areas can local financial organizations minimize information asymmetry and reduce operating risks. Therefore, the local financial legislation in each province focuses on solving the local financial contradictions and problems faced by the local area and building targeted local financial supervision and development systems and mechanisms. As the sixth local financial legislation in the country, the "Local Financial Regulations of Zhejiang Province", on the basis of actively drawing on the legislative experience of other brother provinces and cities, focuses on the economic and social development of Zhejiang and strives to solve the major problems that plague local financial development and risk prevention in Zhejiang. It stipulates many systems that reflect Zhejiang issues and embody Zhejiang characteristics.

1. Scope of application that reflects Zhejiang characteristics

"Zhejiang Province Local Finance The management service objects of the Regulations mainly involve "7+2+1+X" type of local financial organizations. According to the "Several Opinions on Serving the Real Economy, Preventing and Controlling Financial Risks and Deepening Financial Reform" issued by the Central Committee of the Communist Party of China and the State Council, the scope of local financial supervision by local governments mainly includes "7+4" institutions. The central government requires local governments to be responsible for the supervision of small loans. Companies, financing guarantee companies, regional equity markets, pawn shops, financial leasing companies, commercial factoring companies, local asset management companies and other financial institutions shall be supervised, and supervision of investment companies, farmers' professional cooperatives, social crowdfunding institutions, local various Supervision of similar exchanges, etc. However, judging from the actual situation in Zhejiang Province, investment companies mainly need to manage private equity investment management institutions that manage funds for others, and social crowdfunding mainly need to manage equity crowdfunding platforms that manage funds for others. Currently, these two Such objects are clearly managed by the China Securities Regulatory Commission, so the regulations do not include these two types of institutions within the scope of application, temporarily forming a "7+2" regulatory pattern. In addition to "7+2" institutions, according to Zhejiang Province's own characteristics and needs, the regulations also include "private lending" within the scope of supervision. In 2014, the "Wenzhou Private Financing" was formulated and promulgated by the Standing Committee of the Zhejiang Provincial People's Congress. The Management Regulations identify three types of private financing service organizations: private fund management enterprises, private financing information service enterprises, and private financing public service institutions. The relevant provisions of this Regulation draw on the experience of the "Wenzhou Private Financing Management Regulations" and make them according to development needs. made appropriate adjustments. In addition, "X" refers to the provisions of laws, administrative regulations and other organizations engaged in financial business that are supervised and managed by the provincial people's government authorized by the State Council as a blanket provision.

In "Zhejiang Province Local Among the management service objects of the Financial Regulations, bringing private lending activities into the scope of adjustment is undoubtedly an innovation of Zhejiang Province. Article 18 of the "Local Financial Regulations of Zhejiang Province" stipulates: "Private lending activities shall comply with laws, regulations and relevant national regulations." If private lending falls under any of the following circumstances, the borrower shall, within fifteen days from the date of signing the contract, submit a copy of the contract and the loan delivery voucher to the local financial work department of the districted city or the private financing public service agency entrusted by it for filing: (1) The amount of a single loan or the cumulative amount of loans from the same lender reaches more than 3 million yuan; (2) The balance of principal and interest of the loan reaches more than 10 million yuan; (3) The cumulative amount of loans is more than 30 specific objects. ”The "Local Financial Regulations of Zhejiang Province" aims to clarify and investigate the situation of private lending funds through the filing system, and prevent legal private lending activities from constituting illegal fund-raising crimes "without the approval of relevant departments in accordance with the law" or "illegality" The lender has the right to urge the borrower to fulfill the filing obligations for private lending, and may also perform it voluntarily. In terms of legal liability, if a private financing service enterprise or private loan borrower fails to perform its filing obligations, or provides false filing materials, the local financial work department of the districted city will order it to make corrections within a time limit and impose penalties in accordance with the following provisions: (1) Private financing service enterprises shall be fined not less than 10,000 yuan but not more than 30,000 yuan; (2) If the borrower of a private loan is a natural person, a fine of not less than 10,000 yuan but not more than 50,000 yuan may be imposed; if the borrower is an enterprise or other organization, a fine of not less than 30,000 yuan may be imposed. A fine of not less than 100,000 yuan but not more than 100,000 yuan is imposed.

2. Build a three-level local financial supervision system at provincial, city and county levels

my country's local financial risks and The comparison of regulatory power has distinctive characteristics. From a vertical perspective, my country's financial regulatory power is projected from the central to local governments, showing a decreasing pattern. The further down the provinces, cities and counties (cities, districts), the greater the regulatory power. Insufficient; compared with the trend of vertical decline of financial regulatory power, local financial risks show an opposite trend. Sub-provincial areas with relatively weak vertical supervision may become areas with high incidence of financial risks. Local financial organizations develop and operate in a county-wide manner. model, causing financial risks to gradually accumulate in county areas. It is precisely based on the understanding of the particularity of local financial risks that the "Zhejiang Province Local Financial Regulations" established the local financial work system of Zhejiang Province based on the principle of commensurate powers and responsibilities, and clarified the provincial, districted cities, counties (cities, districts) The three levels of people's governments have divided their responsibilities and implemented local financial supervision and risk prevention and handling responsibilities at all levels. First, the provincial people's government is responsible for the construction of local financial regulatory institutions in the province, improving the local government financial work discussion and coordination mechanism, coordinating major issues of local financial reform, development and stability, and coordinating and solving problems in local financial supervision and management, financial risk prevention and resolution. Major issues, and as the first person responsible for local financial supervision and management, financial risk prevention and disposal, and illegal fund-raising, accept the guidance and supervision of the Financial Stability and Development Committee of the State Council; secondly, cities and counties (cities, districts) divided into districts The two levels of people's governments should strengthen their leadership over local financial work, take into account local financial development and risk prevention, and assume local financial risk prevention and disposal responsibilities in accordance with regulations.

Zhejiang Province Local Finance Ministry , the arrangement of the three-level regulatory system of districted cities and counties (cities, districts) has consolidated the supervision and management responsibilities of local financial organizations to local governments at all levels. The Provincial People's Government, as the primary person responsible for local financial supervision and management, financial risk prevention and disposal, and illegal fund-raising, is not inconsistent with the practice of consolidating the responsibilities of local governments at all levels and local financial departments, and consolidating local financial supervision Territorial responsibilities do not mean consolidating "provincial territorial responsibilities." In the past, it was emphasized that local financial regulatory powers cannot be delegated to the people's governments at the city and county (city, district) levels, which makes local financial management resources mainly concentrated in There is a serious regulatory vacuum at the grassroots level of provincial people's governments, districted cities, and counties (cities, districts). Some counties even have no specialized agencies and supervisors, making the grassroots areas a high-risk area for local financial risks. In order to effectively solve this problem, the "Local Financial Regulations of Zhejiang Province" established a three-level local financial regulatory work department system at the province, districted city, and county (city, district) based on the actual need to consolidate local risk disposal responsibilities. The provincial government has established local financial supervision and management departments to be responsible for the supervision and management of local financial organizations in the province. The people's governments of cities and counties (cities and districts) with districts have established local financial work departments to implement local front-line supervision responsibilities and truly realize the supervision and management of local financial organizations in the province. Comprehensive regulation of financial activities.

In addition, the regulations are also clarified The functional positioning of local financial work departments at all levels has been clarified, and a business leadership system that combines "regional jurisdiction" and "segmentation" has been established. The financial work departments determined by the people's governments of cities and counties (cities, districts) divided into districts are responsible for the specific work of financial risk prevention and disposal within their respective administrative regions, and accept the business guidance and coordination of provincial and local financial supervision and management departments; at the same time, As functional departments of the local people's governments, local financial departments at all levels must also accept the leadership of the governments at the same level.

3. Establish a dual coordination mechanism for local financial supervision

"Zhejiang Province Local Finance The Regulation established a dual coordination mechanism for local financial supervision. The first is the local coordination mechanism of the Office of the Financial Stability and Development Commission of the State Council. The Office of the Financial Stability and Development Commission of the State Council issued the "Opinions of the Office of the Financial Stability and Development Commission of the State Council on Establishing a Local Coordination Mechanism" to gradually establish a local coordination mechanism for the Office of the Financial Commission in various provinces (autonomous regions and municipalities) to strengthen the central and local efforts in financial supervision, risk disposal, Collaboration in information sharing and consumer rights protection. The local coordination mechanism of the Financial Commission Office is an important measure to implement the National Financial Work Conference’s recommendation on strengthening central and local financial cooperation. It greatly strengthens the coordination of central and local financial supervision and is conducive to accurately preventing and resolving local financial risks. It means that my country’s local financial supervision framework The initial formation is the further improvement of my country’s financial supervision system. The second is the coordination mechanism for local government financial work discussions. The Zhejiang Provincial People's Government has established a local financial work discussion and coordination mechanism to coordinate major issues concerning the reform and development of the local financial industry in the province, coordinate local financial supervision and risk disposal, and maintain local financial stability. The arrangement of dual coordination mechanisms can undoubtedly better balance the central and local governments. For example, the central coordination mechanism has the advantage of accepting and identifying illegal financial activities, but it lacks the advantages of disposal, banning and removal. Local governments have the advantages of public security, procuratorial, and court , market supervision and other advantages of joint law enforcement and disposal. The local government financial work discussion and coordination mechanism in Zhejiang Province can stimulate the ability of local governments to coordinate independently, give full play to local law enforcement and information advantages, obtain regional financial risk information in a timely manner before the central government, eliminate risk hazards, and quickly mobilize local resources for disposal. Effectively assume local financial supervision and risk prevention and handling responsibilities, promote local financial stability and financial services for the development of the real economy.

"Zhejiang Province Local Finance On the premise of not conflicting with higher-level laws and central regulations, the Regulations clarify that local financial supervision and management (work) departments shall assume the following powers in local financial supervision and management:

(1) The right to formulate regulatory implementation rules. Article 51 of the "Zhejiang Province Local Financial Regulations" clearly authorizes the provincial people's government and provincial local financial supervision and management departments to supervise and manage various local financial organizations in accordance with laws, administrative regulations, central financial management department supervision and management rules and these regulations. , formulate implementation details such as standards for determining major financial risks.

(2) Market access regulatory power. Article 9 of the "Zhejiang Provincial Local Financial Regulations" stipulates the market access of local financial organizations, clarifying that private financing service enterprises shall register with the local financial work department of the districted city in accordance with relevant provincial regulations. Article 18 stipulates that "the local financial work department of a districted city or the private financing public service agency entrusted by it to provide private lending information filing services shall submit the filing information to the provincial and local financial supervision and management department on a quarterly basis." ”

(3) Supervision and management rights. Provincial local financial supervision and management departments can implement prudential supervision and management of local financial organizations (Article 13); require local financial organizations to submit materials and report relevant matters (Article 15); conduct inspections of the business activities and risk status of local financial organizations Carry out off-site supervision and management (Article 15); conduct on-site inspections of local financial organizations in accordance with the law, including inquiries, interviews, access, copying and inspection of relevant materials, first registration and preservation of documents, materials and electronic equipment, and inspection of relevant business data management systems and other measures (Article 20); provide guidance and supervision on the liquidation of local financial organizations (Article 21). In addition, in order to promptly investigate potential risks and improve front-line supervision capabilities, the Regulations specifically authorize local financial departments of cities and counties (cities, districts) divided into districts to conduct on-site inspections of local financial organizations with potential financial risks in accordance with the law, and have the right to take corresponding regulatory measures.

(4) Risk disposal rights. Depending on the size of local financial risks, local financial supervision and management (work) departments have the right to take different measures to deal with them. If the business activities of local financial organizations may cause major financial risks, the local financial supervision and management (work) department may take the following measures: (1) Prompt the risks to investors, creditors and other stakeholders; (2) Report the risks to the shareholders’ meeting (general meeting of members) ) Reminder of the employment risks of relevant directors (directors), supervisors, senior managers or operating managers; (3) Other measures that can be taken as prescribed by laws and regulations. If the business activities of local financial organizations have caused major financial risks, the local financial supervision and management (work) departments may also take the following measures: (1) Seize property, seal up sites, facilities or property; (2) Coordinate the acceptance and survival of similar local financial organizations business or coordinate and guide them to carry out market-oriented restructuring; (3) Other measures that can be taken as prescribed by laws and regulations. In addition, the local financial supervision and management (work) department may recommend that relevant units take the following measures based on the risk situation: (1) Restrict legal representatives, actual controllers, directors (council members), supervisors, senior managers or operators of local financial organizations in accordance with the law. Managers leave the country; (2) Restrict local financial organizations from transferring or transferring property or setting other encumbrances on their property in accordance with the law.

(5) Financial development rights. Although Chapter 4 of the "Local Financial Regulations of Zhejiang Province" "Financial Services for the Real Economy" will give local people's governments at all levels the main authority to promote the standardized development of the financial industry and promote financial services to the real economy. However, according to the "Regulations on the Functional Configuration, Internal Organizations and Staffing of the Zhejiang Provincial Local Financial Supervision and Administration Bureau", the Zhejiang Provincial Local Financial Supervision and Administration Bureau is undoubtedly the functional department specifically responsible for the province's financial development responsibilities. The Zhejiang Provincial Local Financial Supervision and Administration Bureau mainly assumes the following responsibilities in financial development: (1) Formulating and organizing the implementation of the province's financial industry development plan. Study major issues in the province's financial development and provide decision-making reference for the provincial party committee and provincial government; (2) Establish and improve the local financial work coordination mechanism and strengthen cooperation with the Hangzhou Central Branch of the People's Bank of China, Zhejiang Banking and Insurance Regulatory Bureau, Zhejiang Securities Regulatory Bureau and relevant departments Communication and coordination, and fulfilling the responsibilities of financial services for the real economy, preventing and controlling financial risks, and deepening financial reform; (3) Promoting the development of the province's financial industry, coordinating and promoting the construction of major financial strategies, key projects, and key clusters; (4) Organization and coordination Financial institutions provide financial guarantees for the province's economic and social development and are responsible for the assessment and evaluation of financial guarantees; (5) Formulate policies and measures to promote the establishment of multi-level capital market reform and development in the province; (6) Responsible for the construction of the province's financial industry talent team , formulate a plan for building a team of financial talents and organize its implementation; (7) other tasks assigned by the provincial party committee and the provincial government, and actively guide financial services to serve the real economy.

The "Local Financial Regulations of Zhejiang Province" has a special chapter that stipulates the content of financial services for the real economy, which is the first of its kind in the country. In order to actively promote financial services to the real economy and promote the standardized development of the financial industry, the "Zhejiang Province Local Financial Regulations" takes the work promotion of local governments at all levels and relevant departments as an entry point and makes the following provisions: First, provinces and establishments The municipal people's government of the district shall formulate the financial industry development plan for its administrative region (Article 33) based on the national economic and social development plan and the superior financial industry development plan; secondly, from the perspective of financial opening up to the outside world, regional coordinated development, and the construction of financial agglomeration areas , financial reform experiments, multi-level capital market construction, financial resource investment direction, corporate financial advisory system, and government policy support, etc., put forward requirements for financial services to the real economy (Articles 34-37); The third is to support financial technology Provisions on innovative development and regulatory technology applications (Article 38); fourth, relevant requirements for creating a financial development environment are put forward from aspects such as financial talents, financial credit environment, and industry self-discipline.