Focus on Enterprise Credit Risk Classification Management

On 4 January 2022, the Executive Meeting of the State Council considered and adopted the “Guiding Opinions on Promoting Enterprise Credit Risk Classification Management to Further Enhance Regulatory Effectiveness” (hereinafter referred to as the “Opinions”), which was issued on 13 January 2022 (State Municipal Supervision Xin Fa [2022] No. 6).

 

The Opinions decided to implement enterprise credit risk classification management, requiring the scientific construction of an enterprise credit risk classification index system based on the timely collection of credit information related to enterprises, the classification of enterprise credit risk without discrimination, the differentiated supervision of enterprises with different credit risk levels, and the strengthening of risk monitoring and early warning.

 

The Opinion focuses on the following points:

 

I-Proposes general requirements for building a new type of market credit supervision system with Chinese characteristics

1. Scientific construction of enterprise credit risk index system, timely collection of enterprise registration, filing, administrative licensing, administrative penalties, inclusion in the abnormal list and the list of serious subjects and other information, and do according to the credit risk level classification.

According to the credit risk status from low to high enterprises into four categories: credit risk low (Class A), credit risk general (Class B), credit risk higher (Class C), credit risk high (Class D). The classification is recorded in the name of the enterprise and updated dynamically.

1. For enterprises with Class A, the principle of “no disturbance” is realized, and the proportion and frequency of random inspections can be reasonably reduced except for complaints and problems found by big data monitoring.
2. For enterprises with Class B, random checks are carried out according to the usual process.
3. Focused attention is applied to enterprises with Class C.
4. For enterprises with Class D, the frequency of random inspections is targeted to increase significantly, and on-site inspections are implemented when necessary.

2. Use the classification results, improve the effectiveness of supervision, prevent indiscriminate and capricious enforcement, and explore the implementation of scientific and effective supervision of new industries, new business models and new modes of enterprises.
3. Strengthening risk monitoring and early warning, using big data analysis and algorithmic technical models to detect anomalies and risks at an early stage, alerting them at the right time, moving forward to the regulatory gate and resolving potential risks, etc. These requirements constitute the basic content and main aspects of establishing a market credit supervision mechanism and regulatory system with Chinese characteristics.

 

II-Clarified the basic ideas and practical paths to achieve innovation in the enterprise credit supervision system

1. Scope of supervision: The results of the credit risk classification of enterprises are used as an internal reference basis for allocating supervisory resources and are not used as a credit evaluation of enterprises, thus distinguishing supervisory work from evaluation activities.
2. Regulatory tools: It is proposed to rely on information technology to implement timely and automatic classification, objectively reflect the credit risk status of enterprises, and promote the change from undifferentiated and rough regulation to differentiated and precise regulation.
3. Regulatory focus: It is proposed to strengthen the application and classify and implement policies. To carry out supervision for outstanding problems and risk hazards, reasonably determine the focus of supervision, supervisory measures, sampling ratio and frequency, etc., to promote precise supervision, effective supervision, intelligent supervision, and fair supervision.

 

III-Provides operational guidelines for conducting credit risk classification supervision and application of results for enterprises

1. Clarify the system of indicators and criteria for the collection of information.
2. Establish a credit risk classification and management system.
3. Explore prudential supervision and application of results system.
4. Strengthen dynamic management and monitoring and early warning mechanisms.
5. Strengthen risk management and personal privacy protection.

 

IV-Sets out a timetable for promoting scientific, accurate and intelligent enterprise credit supervision

1. By the end of 2022, the provincial market supervision departments should establish a general enterprise credit risk classification and supervision mechanism, implement scientific classification of the entire amount of enterprises under their jurisdiction, and realize the normal application of classification results in “double random, one public” and other supervision work, i.e., take one year to complete the normal application work.
2. By the end of 2023, the provincial supervisory authorities will achieve effective integration of enterprise credit supervision and classification management with the supervision of professional fields and establish a sound mechanism for the graded and classified credit supervision of enterprises applicable to professional fields, i.e., to take another year to complete the extension of work to professional fields.
3. At the same time, it is proposed to take about three years to fully implement credit risk classification management and achieve the construction target of integrated information application and risk monitoring and early warning.

 

Therefore, companies should pay attention to legal compliance in all their day-to-day affairs to avoid being classified as a low credit risk.

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