PBOC details market access of financial holding companies
By CGTN's Global Business
In order to better serve the real economy, China has launched new regulation that requires non-financial companies or other eligible entities - which controls at least two financial institutions - to apply for approval from the People's Bank of China (PBOC) to establish financial holding companies.
The new regulation will take effect on November 1. Deputy Governor of the PBOC Pan Gongsheng has specified rules on the establishment of financial holding companies-including registered capital, shareholders and risk management.
"The move is aimed at plugging regulatory loopholes and deepening financial reforms amid efforts to maintain market order, reduce risks and enhance support for the real economy. We must strictly control market access and focus on the prevention of risks and implement key regulatory content. The rules clarified the division of responsibilities and supervision," Pan said.
Promoting the healthy development of the capital market is the key work of China's financial reform. PBOC will continue to improve the institutional framework, prevent and defuse risks, and enhance the financial sector's ability to serve the real economy.
"The PBOC conducts continuous supervision over financial holding companies mainly from the perspective of macro-prudential management. Meanwhile, considering some of its internal shareholding structure may not meet the requirements of the Financial Method, we set up a reasonable transition period to promote the smooth implementation of the financial measures," Pan noted.