Xinhua News Agency, Beijing, December 17 (Xinhua) Premier Li Qiang of the State Council recently signed the the State Council Order, promulgating the Regulation on the Supervision and Administration of Non-bank Payment Institutions (hereinafter referred to as the Regulation), which will take effect on May 1, 2024.

　　The CPC Central Committee and the State Council attached great importance to the development of non-bank payment industry and risk prevention and control. In recent years, the rapid development of non-bank payment institutions in China has played an important role in active transactions and prosperous markets, and has made positive contributions to the development of the real economy and the improvement of people’s livelihood. The formulation of special administrative regulations will further bring non-bank payment institutions and their business activities into the legal track for supervision, aiming at promoting the standardized and healthy development of the non-bank payment industry, effectively protecting the legitimate rights and interests of users, giving full play to its role in serving the real economy and meeting the diversified payment and settlement needs of users. The "Regulations" consists of 6 chapters and 60 articles, focusing on the following contents:

　　The first is to clarify the definition and establishment license of non-bank payment institutions. Non-bank payment institutions are defined as companies that transfer monetary funds according to electronic payment instructions submitted by users except banking financial institutions. It is stipulated that the establishment of non-bank payment institutions shall be approved by the People’s Bank of China, and the conditions for establishment shall be clearly defined and the access shall be strictly controlled. It is clear that non-bank payment institutions should aim at providing small-sum and convenient payment services, and should not engage in other businesses that need to be approved according to law without approval, or engage in liquidation business in disguise.

　　The second is to improve the payment business rules. In order to meet the development needs of payment business, the payment business is divided into two categories: stored value account operation and payment transaction processing, and the People’s Bank of China is authorized to formulate specific rules. Clarify the management requirements of payment business, and stipulate that non-bank payment institutions should improve their business management systems, have business systems, facilities and technologies that meet the requirements, and ensure the continuity, safety and traceability of payment business. Clarify the management regulations on payment accounts, reserve funds, payment instructions, etc., and require payment accounts to be opened in the real name of users. Non-bank payment institutions shall not misappropriate, occupy or borrow reserve funds, and shall not forge or alter payment instructions to prevent risks in the non-bank payment industry.

　　The third is to protect the legitimate rights and interests of users. It is stipulated that non-bank payment institutions should sign payment service agreements with users, and the terms should be drawn up in accordance with the principle of fairness. Non-bank payment institutions shall ensure the safety of users’ funds and information, and shall not entrust related core business and technical services to a third party; Keep user data and transaction records properly, establish an effective due diligence system, and strengthen risk management; Take effective measures to ensure the security of payment accounts and prevent payment accounts from being used for illegal fund-raising, telecommunication network fraud, money laundering, gambling and other illegal and criminal activities.

　　The fourth is to clarify regulatory responsibilities and legal responsibilities. It is stipulated that the supervision and management of non-bank payment institutions should implement the line, principles, policies and decision-making arrangements of the party and the state, focus on serving the real economy, coordinate development and safety, and maintain fair competition order. Clarify the regulatory responsibilities, regulatory measures and risk disposal measures of the People’s Bank of China, and the local people’s government shall cooperate with the People’s Bank of China to do a good job in risk disposal. The Regulations also stipulate the legal liability for illegal acts.