21st Century Business Herald reporter Zhang Min in Beijing reported that according to the China Banking and Insurance Regulatory Commission website, in order to support high-quality real estate companies to rationally use pre-sale regulatory funds, prevent and resolve liquidity risks of real estate companies, and promote the stable and healthy development of the real estate market, China The China Banking and Insurance Regulatory Commission, the Ministry of Housing and Urban-Rural Development, and the People's Bank of China jointly issued the "Notice on the Issuance of Letters of Guarantee by Commercial Banks to Replace Pre-sale Regulatory Funds" (hereinafter referred to as the "Notice") to guide commercial banks to provide high-quality services in accordance with the principles of marketization and rule of law. Real estate companies issue letters of guarantee to replace pre-sale regulatory funds.

This is another positive policy for the property market after the central bank and China Banking and Insurance Regulatory Commission issued the "16 Financial Articles" on the 11th.

Analysts believe that this move will help improve the efficiency of the use of pre-sale funds, relieve the liquidity pressure of real estate companies to a certain extent, and at the same time help achieve the goal of "guaranteing the delivery of buildings and stabilizing people's livelihood." purpose.

The "Notice" points out that after the funds in the supervision account reach the supervision quota specified by the housing and urban-rural development department, the real estate enterprise can apply to a commercial bank to issue a letter of guarantee to replace the funds within the supervision quota. Commercial banks can make independent decisions in accordance with the principles of marketization and rule of law and on the basis of fully assessing the credit risks, financial conditions, reputation risks, etc. of real estate companies, and carry out letter of guarantee replacement pre-sale regulatory fund business with high-quality real estate companies.

Real estate enterprises can apply to commercial banks to issue letters of guarantee to replace funds within the regulatory quota. The amount of the replacement letter of guarantee shall not exceed 30% of the funds required in the supervision account to ensure the completion and delivery of the project, and the regulatory funds after replacement shall not be lower than Ensure 70% of the funds required for project completion and delivery in the supervision account.

In terms of risk prevention, commercial banks must use margins, counter-guarantees for real estate companies and other credit enhancement measures to prevent risks in letter of guarantee business, accrue risk capital and withdraw risk reserves as required. Once an advance payment occurs, the issuing bank must promptly take recourse measures to the real estate company to ensure the safety of the creditor's rights.

The "Notice" stipulates that real estate companies must use the pre-sale regulatory funds replaced by letters of guarantee in accordance with regulations, and give priority to project construction, repayment of project debts due, etc., and shall not be used to purchase land or add other investments. , repay shareholder loans, etc. Real estate enterprises must bear the obligation to replenish the funds in the supervision account as agreed to ensure sufficient funds for project construction.

The "Notice" also requires that commercial banks with a regulatory rating of 4 or below or an asset scale of less than 500 billion yuan are not allowed to carry out pre-sale regulatory fund business for letter of guarantee replacement.

The issuance and implementation of the "Notice" will help high-quality real estate companies relieve liquidity pressure, stabilize real estate market expectations, and promote the stable and healthy development of the real estate market. In the next step, the China Banking and Insurance Regulatory Commission, the Ministry of Housing and Urban-Rural Development, and the People's Bank of China will communicate and collaborate closely to jointly implement the "Notice" and guide commercial banks to carry out the pre-sale regulatory fund business of letter of guarantee replacement in accordance with the law.

A few questions that everyone is concerned about: What are the requirements for the amount and period of the letter of guarantee? What requirements should a commercial bank meet when issuing a letter of guarantee to replace pre-sale regulatory funds? How to use a letter of guarantee? How should commercial banks prevent business risks? What responsibilities should real estate companies fulfill? The heads of relevant departments of the China Banking and Insurance Regulatory Commission, the Ministry of Housing and Urban-Rural Development, and the People's Bank of China answered reporters' questions and issued them along with the "Notice."

At the close of trading on the 14th, the real estate sector continued its rising trend on the 11th. Among the 125 A-share real estate stocks displayed by WIND, 84 closed in the red, and 6 of them rose by 10%. In terms of Hong Kong stocks, the real estate sector led the gains, with Country Garden soaring 45.54% and CIFI Holdings rising 9.68%. Both stocks have tripled since November; Longfor Group rose 16.48%, also rising since the bottom on October 31. 3 times.

Attachment: Full text of the notice

All banking and insurance regulatory bureaus, all provinces, autonomous regions, municipalities directly under the Central Government and the Departments of Housing and Urban-Rural Development (committees, management committees, bureaus) of the Xinjiang Production and Construction Corps, the People’s Republic of China The bank's Shanghai headquarters, all branches and business management departments, all central branches in provincial capital cities, all central branches in sub-provincial cities, all large banks, joint-stock banks, and foreign-funded banks:

Issued for the purpose of clarifying commercial banks Relevant requirements for the replacement of pre-sale regulatory funds with letters of guarantee, support high-quality real estate companies in rational use of pre-sale regulatory funds, prevent and resolve liquidity risks of real estate companies, and promote the stable and healthy development of the real estate market. The relevant matters are hereby notified as follows:

1 , Allow commercial banks to make independent decisions in accordance with the principles of marketization and rule of law and on the basis of fully assessing the credit risks, financial conditions, reputation risks, etc. of real estate companies, and carry out letter of guarantee replacement pre-sale regulatory fund business with high-quality real estate companies.

2. The letter of guarantee can only be used to replace the funds within the supervision limit of the pre-sale fund supervision account established in accordance with the law. Real estate enterprises must open pre-sale fund supervision accounts in accordance with the "Opinions on Regulating the Supervision of Pre-sale Funds for Commercial Housing" (Jianfang [2022] No. 16). The deposits and down payments paid by home buyers, mortgage loans issued by commercial banks and other forms of The purchase money and other commercial housing pre-sale funds must be deposited directly into the supervision account. After the funds in the supervision account reach the supervision limit specified by the housing and urban-rural development department, the real estate enterprise can apply to a commercial bank to issue a letter of guarantee to replace the funds within the supervision limit. The amount of the replacement letter of guarantee shall not exceed 30% of the amount of funds in the supervision account required to ensure the completion and delivery of the project. %, the regulatory funds after replacement shall not be less than 70% of the funds in the regulatory account required to ensure the completion and delivery of the project.

3. When the funds within the supervision limit are allocated and used, the bank that opens the pre-sale fund supervision account (hereinafter referred to as the supervision account bank) shall notify the bank that issued the letter of guarantee of the relevant information within 3 working days and issue a letter Banks should urge real estate enterprises to make up the difference in funds (disbursed funds %. If the real estate enterprise fails to make up the balance of funds in the supervision account, the amount of the guarantee shall not be adjusted.

4. Commercial banks should reasonably determine the term of the letter of guarantee to ensure that it matches the project construction cycle. After the project is completed and delivered or the commercial housing project completes the initial registration of house ownership and the pre-sale fund agreement is terminated, the letter of guarantee shall become invalid accordingly.

5. Commercial banks with regulatory ratings of level 4 or below or with asset scales below 500 billion yuan are not allowed to carry out letter of guarantee replacement pre-sale regulatory fund business. Commercial banks are not allowed to issue letters of guarantee to real estate companies that are major shareholders, controlling shareholders or related parties of the bank in exchange for pre-sale regulatory funds. Non-bank financial institutions such as enterprise group finance companies are not allowed to issue letters of guarantee to replace pre-sale regulatory funds.

6. When issuing a letter of guarantee to replace pre-sale regulatory funds, commercial banks must refer to the development loan credit standards and fully assess the real estate enterprise's credit risk, financial status, reputation risk, project sales prospects and remaining value, etc. Carry out letter of guarantee replacement pre-sale regulatory fund business with high-quality real estate companies with sound operations and good financial status. For projects with complex creditor-debt relationships, numerous cases and disputes, external guarantees that are too large, and construction progress that is significantly lower than expected, letters of guarantee should be issued with caution. If there is a relationship between the project subject and the general contractor, project risks must be fully assessed. The full amount of the guarantee is included in the unified credit limit for real estate companies and their affiliated groups.

7. Commercial banks should use margins, counter-guarantees for real estate companies and other credit enhancement measures to prevent risks in letter of guarantee business, accrue risk capital and withdraw risk reserves as required.

8. If a real estate enterprise provides a letter of guarantee issued by a commercial bank and requests the housing and urban-rural development department to release the corresponding amount of funds in the pre-sale fund supervision account, the supervisory account bank shall cooperate with the housing and urban-rural development department to make necessary arrangements. Review work. The housing and urban-rural development department will issue a disbursement instruction to the regulatory account bank after research and approval. The supervisory account bank shall allocate funds according to the allocation instructions of the housing and urban-rural development department, and reduce the account management limit by an equal amount.

9. During the validity period of the guarantee, if the remaining funds in the supervision account are insufficient to pay for the project, the issuing bank shall immediately perform the advance payment and pay the difference within the limit of the guarantee after deducting the remaining funds in the account.

Once an advance payment occurs, the issuing bank must promptly take recourse measures to the real estate company to ensure the safety of the creditor's rights. Advance funds should be fully provided for and truly classified, and no risks should be hidden.

10. All localities shall not force commercial banks to issue letters of guarantee, and shall not link the issuance of letters of guarantee with local pre-sale fund supervision qualifications. The housing and urban-rural development departments and financial management departments should provide necessary support for commercial banks to carry out letter of guarantee replacement pre-sale regulatory fund business.

11. Real estate enterprises must use the pre-sale regulatory funds replaced by letters of guarantee in accordance with regulations, and give priority to project construction and repayment of project debts due, etc., and shall not be used to purchase land, add other investments, repay Shareholder loans, etc. Real estate enterprises must bear the obligation to replenish the funds in the supervision account as agreed to ensure sufficient funds for project construction.

12. All localities should strengthen the management of real estate enterprises and seriously investigate and punish the illegal use of funds by real estate enterprises. Supervisory account banks and letter-issuing banks should promptly report to relevant departments if they discover that a real estate company has used funds in violation of regulations or failed to make up the balance of funds in a timely manner after pre-sale funds are allocated. The housing and urban-rural development departments and financial management departments can take measures such as joint interviews and administrative penalties to urge real estate companies to correct violations.

General Office of the China Banking and Insurance Regulatory Commission

General Office of the Ministry of Housing and Urban-Rural Development

General Office of the People's Bank of China

November 12, 2022 Day