With respect to user collaterals, the Measures stipulate that: (i) in relation to car sharing service, the amount of collateral per unit shall not exceed 2% of the average cost per car of all cars put into operation; and (ii) in relation to bike sharing service, the amount of collateral per unit shall not exceed 10% of the average cost per bike of all bikes put into operation.
After completing filing procedures with the administrative authority in charge of new transport service models in the operator’s place of incorporation, the operator may open only one special deposit custody account (used exclusively for depositing user collaterals and prepayments) with only one custodian bank. At his/her discretion, each user may choose to have his/her user collateral kept in custody in the operator’s dedicated saving account or in the user’s personal bank settlement account.
In connection with user collaterals, operators should ensure that service agreements signed with users specify the amounts to be charged as collaterals, and the conditions for making deductions from collaterals. They should also ensure that a clear notice on the method, procedure and period for getting refund of collaterals is posted in a conspicuous position in their online platforms. Where an operator uses a dedicated savings account to deposit user collaterals, it should work with the custodian bank or any other payment service providers (as the case may be) to establish an emergency mechanism for ensuring refund of user collaterals in special situations, where a disproportionately large number of refund requests are received at the same time or refunds cannot be made in the agreed period of time. If necessary, the operator should advance the user collaterals out-of-pocket.
In connection with user prepayments, operators should specify the conditions for refund of prepayments. If the refund conditions are met, operators should refund the balance of prepayments to users without delay. Operators must not decline or delay refunds or impose any unfair or unreasonable standard terms or technical thresholds. In addition, operators should establish a system and maintain reserves with respect to user prepayments. The amount of reserves shall not be less than 40% of the balance of user prepayments.
Deduction from user collaterals: Deductions from collaterals shall be made in accordance with the deduction conditions specified in the service agreements between operators and users; and
Use of user prepayments: User prepayments shall be used solely for the purposes of the operator’s primary business in connection with the services provided to the users. Using user prepayments for investments or loans involving real estate, equities, securities or bonds is prohibited.
Operators and users may specify the ownership of fruits of user funds by agreements.
Custodian banks shall perform certain duties and responsibilities, including without limitation, opening, changing and cancelling dedicated saving accounts, keeping user funds in safe custody, providing clearing and account checking services for user funds, and providing user fund custody reports, in accordance with the relevant laws, regulations and agreements. However, custodian banks do not provide any warranties regarding the services under the new transport service models between the operators and users.
(6) Coordinated supervision by multiple authorities:
In order to strengthen the supervision of user funds, the Measures define the duties and responsibilities of relevant authorities and organizations in the place of incorporation of new transport service model operators. These administrative authorities include branches of the People’s Bank of China, the National Development and Reform Commission, market regulators, local offices of China Insurance Regulatory Commission and China Banking Regulatory Commission and consumer associations (committees).
<p style="margin: 15px 0px; padding: 0px; max-width: 100%; box-sizing: border-box !important; word-wrap: break-word !important; clear: both; min-height: 1em; color: rgb(51, 51, 51); font-family: -apple-system-font, BlinkMacSystemFont, " helvetica="" neue",="" "pingfang="" sc",="" "hiragino="" sans="" gb",="" "microsoft="" yahei="" ui",="" yahei",="" arial,="" sans-serif;="" font-size:="" 17px;="" font-style:="" normal;="" font-variant-ligatures:="" font-variant-caps:="" font-weight:="" 400;="" letter-spacing:="" 0.544px;="" orphans:="" 2;="" text-align:="" justify;="" text-indent:="" 0px;="" text-transform:="" none;="" white-space:="" widows:="" word-spacing:="" -webkit-text-stroke-width:="" background-color:="" rgb(255,="" 255,="" 255);="" text-decoration-style:="" initial;="" text-decoration-color:="" line-height:="" 1.5em;"=""> The Measures took effect on 1 June 2019. In consideration of the time required for operators to open dedicated savings accounts, connect their information systems to those of the banks and complete any other appropriate work, the Measures give a transition period of six months for existing user funds to be included in the scope of the regulation. The Measures have provided a well-established and comprehensive framework for regulating the safe custody of user funds under new transport service models. It is believed that they can provide a model for regulatory frameworks in other industries.
