Chinanews.com, September 13th. According to the central bank’s website, in order to promote the standardized development of financial holding companies, effectively prevent and control financial risks, and better serve the real economy, with the approval of the Party Central Committee and the State Council, in accordance with the "State Council’s Guidelines for the Implementation of Financial Holding Companies "Decision on Access Management" (Guo Fa [2020] No. 12, hereinafter referred to as "Access Decision"), the People’s Bank of China recently issued the "Trial Measures for the Supervision and Administration of Financial Holding Companies" (People’s Bank of China Order [2020] No. 4, Hereinafter referred to as the "Financial Control Measures"), it will come into force on November 1, 2020.
Data map: People's Bank of China.
Photo by China News Agency reporter Zhang Xinglong
The "Financial Control Measures" follow the concept of macro-prudential management, based on consolidation, and in accordance with the principles of comprehensive, continuous, and penetrating, access to and supervise financial holding companies formed by investment holdings of non-financial enterprises in accordance with the law, and regulate financial holding companies’ Business behavior.
The implementation of the "Financial Control Measures" continues to adhere to the principle of the overall division of operations in the financial industry, and isolates the industrial sector from the financial sector in terms of system. This is conducive to the sustained and healthy development of financial holding companies, is conducive to preventing cross-contagion of risks, and is conducive to further Promote a virtuous economic and financial cycle.
The "Financial Control Measures" detailed the conditions and procedures for the access of financial holding companies in the "Access Decision", and further clarified the scope and subject of supervision. The People's Bank of China supervises financial holding companies, and financial management departments follow financial supervision in accordance with the law. The division of responsibilities supervises the financial institutions controlled by financial holding companies.
The "Financial Control Measures" put forward regulatory requirements for key links such as shareholder qualifications, capital sources and use, capital adequacy requirements, equity structure, corporate governance, related transactions, risk management systems and risk "firewall" systems.
For those institutions that have the conditions to establish financial holding companies before the implementation of the "Financial Control Measures" but have not met the regulatory requirements of the "Financial Control Measures," rationally set up transitional arrangements, grasp the rhythm and timing, and gradually digest the stock.
In the next step, the People's Bank of China will follow the principles of openness, fairness and justice, carry out access management and continuous supervision of financial holding companies in accordance with the law, strengthen supervision and coordination with relevant departments, promote the healthy and orderly development of financial holding companies, and improve the high-quality development of the service economy Ability.