China Proposes Tighter Oversight of Financial Holding Firms
- Identified companies will need licences, capital to operate
- Central bank seeks feedback through Aug. 24 on the proposals
The People's Bank of China headquarters in Beijing.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
China plans to start regulating large conglomerates that may pose systemic risks to the nation’s financial sector.
Certain non-financial firms or individuals with businesses that straddle at least two financial industries will be classified as “financial holding companies” and will need licenses from the People’s Bank of China to operate, the regulator said in proposals Friday. If adopted, the rules would require the companies to hold specified levels of capital and regulators would scrutinize their ownership structure, related transactions, and source of funding.