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China Regulates Affiliated Transactions of Financial Holding Companies

Tue, 21 Mar 2023
Categories: China Legal Trends

On 1 Feb. 2023, the People’s Bank of China (PBC) released the “Measures for the Administration of Affiliated Transactions of Financial Holding Companies” (hereinafter the “Measures”, 金融控股公司关联交易管理办法).

China’s financial holding companies are those whose parent companies are banking, trust, securities or insurance companies primarily engaged in a specific type of financial business and then participate in another type or types of financial business either through its subsidiaries or directly through the parent companies.

Financial holding companies may have a large number of shareholding entities with complex business and organizational structures, and large-scale and highly associated financial activities. As a result, Chinese regulators are trying to strengthen their supervision of affiliated transactions.

The highlights of the Measures are as follows:

  • A financial holding company’s affiliated transaction management system shall, within 15 working days after it is approved and officially promulgated by the board of directors, be filed with the PBC for the record and copied to the PBC branch at its domicile.
  • A financial holding company shall establish a management information system for affiliated transactions, and timely submit information on affiliated parties, major affiliated transactions, and quarterly affiliated transactions to the PBC and its branch at its domicile.
  • A financial holding company shall, within 15 working days upon execution of an agreement on major affiliated transactions, submit the relevant information on each transaction to the PBC and its branch at its domicile.

 

 

Cover Photo by 李大毛 没有猫 on Unsplash

Contributors: CJO Staff Contributors Team

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