Authors: Han Kun Law Offices Ting Zheng丨Raymond Yan 丨Eryin Ying丨Lin Zhu丨Shirley Liang
The National Financial Regulatory Administration ("NFRA") issued the Administrative Measures for Syndicated Loan Business ("Administrative Measures") on 12 October 2024, which will take effect from 1 November 2024 and shall amend and replace the Guidelines on Syndicated Loan Business issued by the China Banking Regulatory Commission on 1 August 2011 (the "Business Guidelines"). NFRA released a draft of the Administrative Measures for public consultation on 22 March 2024. We summarized and interpreted the major amendments of the consultation draft (the "Consultation Draft") to the Business Guidelines (for more details, please refer to our previous article "Optimizing the Regulation of Syndicated Loan Business - Interpretation of the Administrative Measures for Syndicated Loan Business (Consultation Draft)"). The final version of the Administrative Measures includes several refinements and enhancements compared to the Consultation Draft, and some of these updates address the concerns we highlighted in our article in March. The key updates include: (1) refining the definition of syndication tranches and segment criteria; (2) enhancing provisions relating to distribution threshold and including distribution thresholds for cases where there is a co-lead arranger and/or sub-lead arranger involved; (3) amending provisions relating to agent banks, with an added exception allowing the borrower's related parties to serve as an agent bank; (4) clarifying requirements relating to syndicated loan charges and authorizing the industry's self-discipline organization to regulate these charges; (5) refining the right of first refusal and the scope of eligible transferees in syndicated loan transfers; and (6) removing the requirements for banks engaged in syndicated loan businesses to report to the NFRA.
The amendments, along with our analysis and suggestions, are as follows (changes from the Consultation Draft to the Administrative Measures are shown in red):
Ting Zheng
+86 21 6080 0203
ting.zheng@hankunlaw.com
Practice Areas
Financial services and regulatory, Outbound investment, Banking and finance
Raymond Yan
+86 21 6080 0512
raymond.yan@hankunlaw.com
Practice Areas
Financial services and regulatory, Fintech, Banking and finance, Asset management, Mergers and acquisitions
Eryin Ying | Han Kun Law Offices
Lin Zhu | Han Kun Law Offices
Shirley Liang | Han Kun Law Offices
