3. Question: What requirements does the "Notice" put forward to effectively strengthen the financing management of financing platform companies? Answer: The "Notice" is based on current laws, regulations and policy provisions, from the perspective of the relationship between local governments and financing platform companies, and the capital injection of local governments into financing platform companies.

In terms of behavior, the financing provided by financial institutions to financing platform companies, and the treatment of debts caused by illegal and illegal debt guarantees, clear requirements are put forward to guide financing platform companies to raise funds in a market-oriented manner, and local governments are strictly prohibited from illegally and illegally borrowing through financing platform companies in disguised forms.

First, clarify the boundaries between local governments and financing platform companies.

Accelerate the transformation of government functions, properly handle the relationship between the government and the market, promote the transformation of financing platform companies into state-owned enterprises with market-oriented operations as soon as possible, and carry out market-oriented financing in accordance with laws and regulations.

Improve the information disclosure mechanism. When financing platform companies raise funds at home and abroad, they should proactively declare in writing to their creditors that they will not assume government financing functions, and make it clear that their new debts from January 1, 2015 are not local government debts according to law to prevent misleading

Investor decision-making behavior promotes the protection of investors’ legitimate rights and interests.

The second is to regulate the capital injection behavior of local governments.

Local governments are not allowed to inject public welfare assets and reserve land into financing platform companies in violation of regulations, and are not allowed to promise to use the expected revenue from the transfer of reserve land as a source of debt repayment funds for financing platform companies, and promote the improvement of the legal compliance of financing platform company assets, which not only protects the legality of investors

equity, and prevent local governments from resorting to borrowing in disguised form through state-owned enterprises.

The third is to regulate the financing behavior of financial institutions.

Financial institutions should effectively strengthen risk identification and prevention, implement the conditions for corporate debt access, perform relevant procedures in accordance with commercial principles, prudently assess the financial capabilities and repayment sources of debtors, and guard against operational risks.

When financial institutions provide financing to financing platform companies and other enterprises, they are not allowed to violate laws and regulations or accept guarantees from local governments and their departments in any form such as guarantee letters, commitment letters, and comfort letters.

Financial institutions are encouraged to support market-oriented financing of financing platform companies in accordance with laws and regulations to serve the development of the real economy.

The fourth is to deal with illegal and illegal debt guarantee debts in accordance with the law.

For debts generated by local governments' illegal and illegal borrowing guarantees, strict compliance with the "Notice of the General Office of the State Council on Issuing the Emergency Response Plan for Local Government Debt Risks" (Guoban Han [2016] No. 88), the "Notice of the Ministry of Finance on Issuing the "Local Government Debt Risk Emergency Plan""

Notice of the "Guidelines for the Classification and Disposal of Debt Risks" (Caiyu [2016] No. 152) requires that debt risks be properly handled in accordance with the law and that debt risks should be reasonably shared between debtors and creditors.

4. Question: How does the "Notice" regulate the cooperation between the government and social capital parties? Answer: The "Notice", based on current laws, regulations and policy provisions, encourages local governments to carry out government-social capital cooperation (PPP) in a standardized manner and establish various

investment funds.

It is strictly prohibited for local governments to adopt illegal and illegal borrowing methods such as non-standard PPP projects and government investment funds, such as "clear stocks and hidden debts".

First, encourage local governments and social capital to regulate cooperation in accordance with the law.

Local governments are required to regulate public-private partnership (PPP).

Allow local governments to set up various investment funds by investing alone or jointly with social capital, implement standardized market-oriented operations in accordance with the law, and guide social capital to invest in key areas and weak links of economic and social development.

Second, it is strictly prohibited for local governments to use PPP, various government investment funds and other methods to borrow in disguised ways in violation of laws and regulations.

The cooperation between local governments and social capital should share the benefits and bear the risks. Unless otherwise provided by the State Council, local governments and their departments shall not engage in any way when participating in PPP projects and establishing various investment funds funded by the government.

Commit to repurchase the investment principal of the social capital party, and shall not bear the loss of the social capital party's investment principal in any way, and shall not promise minimum returns to the social capital party in any way, to prevent local governments from violating laws and regulations by assuming all risks of the project.

Take on debt.

At the same time, it is clarified that local governments are not allowed to use borrowed funds to invest in the establishment of various investment funds, and they are not allowed to attach additional terms to any equity investment methods such as limited partnership funds to borrow in disguised form.

5. Question: The "Notice" proposes to further improve and standardize the local government debt financing mechanism. What are the main contents? Answer: First, the standard debt financing method is clarified in accordance with the law.

Strictly implement the provisions of the Budget Law and Guofa [2014] No. 43, local government debt must be issued by issuing local government bonds within the limit approved by the State Council. Otherwise, local governments and their subordinate departments are not allowed to borrow debt in any way.

Local governments and their departments shall not require or decide enterprises to borrow money for the government or borrow money for the government in disguised form through documents, meeting minutes, leadership instructions, or any other form.

The second is to encourage local governments to build a market-oriented financing guarantee system.

Allow local governments to establish or participate in guarantee companies (including various financing guarantee fund companies) based on their actual financial conditions, and encourage government-funded guarantee companies to provide financing guarantee services in accordance with laws and regulations. Local governments shall bear responsibility for guarantee companies within the scope of their investment in accordance with the law.