(Yicai Global) Aug. 10 -- The Chinese Supreme People's Court highlighted the importance of effective regulation over internet finance businesses in a recent set of advisory opinions titled Opinions of the Supreme People's Court on Further Tempering the Adjudication of Financial Cases (Opinions).

The document calls for efforts to clamp down on illegal activities related to or carried out under the guise of internet finance, and its aim is to facilitate and support the healthy development of fintech businesses.

The Opinions also answer issues to high financing costs and funding difficulties facing the real economy, and require all courts to regulate usurious loans per law, and effectively lower financing costs by declaring loan interest above the legal upper limit for private lending illegal. Other relevant measures the document sets forth include devising methods for determining the legal force of new types of guarantees to facilitate financing activities by small- to mid-sized enterprises, adjudicating securities and futures related civil disputes per law, reinforcing the investment order and financing activities on the capital market, and guiding financial resource allocation toward key sectors and weak links of socioeconomic developments to supply the real economy's needs for financial services, applying insurance law properly in resolving insurance contract dispute cases, enabling the insurance industry to fulfill its long-term prudent risk management and risk protection functions.

The Opinions foreground the importance of safeguarding financial security through effective financial risk prevention and mitigation, and direct that all courts duly handle bankruptcy cases to ensure proper disposal of 'zombie companies' and advance economic deleveraging. 'Zombie businesses' that have lost competitiveness and value must be liquidated without delay as a means of reducing overcapacity and financial leverage in the corporate sector. Bailouts should be extended to insolvent enterprises that conform to market trends and are worth salvaging via bankruptcy reorganization, mediation and optimal social resource allocation.

Efforts must also go to check illegal financial debt evasion and revocation, improve the efficiency of adjudication of related cases, and reduce the cost of financial claim monetization. In view of new issues arising from disposal of problematic financial debts, adjudication criteria must harmonize to ensure 'market-based' handling of suchdebts per the rule of law, the Opinions state.

Cracking down on illegal fundraising activities is tagged as a top priority for prevention of financial risks as these jeopardize the public interest and social stability. The Opinions call on all courts to adjudicate illegal financing cases justly and efficiently and sanction such acts in a condign manner. The large numbers of people and sums involved in illegal fundraising activities and their great impact and high industry and geographical concentrations dictate that courts should tighten communication and coordination with relevant functionaries and local governments to enhance procedures in such cases, safeguard victims' rights and interests, and effectively preserve social stability.

All courts are required to properly adjudicate relevant cases involving bubbles and potential financial risks in the real estate market, and prevent these from affecting financial security and stability, while reinforcing the fundamental function of the real estate industry, which is to provide people with housing.