FIA has submitted comments to the People’s Republic of China Enterprise Bankruptcy Law (Draft Amendments) (EBL) released by the National People's Congress Standing Committee.
In its response, FIA expresses strong support for the efforts to modernise China’s bankruptcy framework and welcomes the recognition of qualified financial transactions and close-out netting. To reinforce legal certainty and align with international best practice, FIA recommends expressly excluding Articles 56 and 107 of the EBL from applying to such transactions and their collateral so they can operate according to agreed terms without insolvency-related interference.
FIA also recommends involving the China Securities Regulatory Commission alongside other authorities when determining the scope of qualified financial transactions, and ensuring equal legal protection for similar products regardless of where they are traded, cleared or settled. This would ensure comprehensive and consistent coverage for both OTC and exchange-traded derivatives, domestic and overseas. Finally, given their systemic importance, FIA proposes adding a new article providing clear recognition and protection for financial market infrastructure operators.
