Photo taken on Oct. 19, 2020 shows an exterior view of the People's Bank of China in Beijing, capital of China. (Xinhua/Peng Ziyang)
BEIJING, Aug. 31 (Xinhua) -- The People's Bank of China (PBOC), China's central bank, started from Tuesday collection of opinions for its opinion-inviting version of rules on supervising and regulating related party transactions of financial holding companies (FHCs), reported Xinhua Finance.
The PBOC drafted the rules in a bid to prevent improper transfer of benefits, risk concentration, risk contagion, and regulatory arbitrage of FHCs so as to foster their stable and healthy operation.
In the opinion-inviting rules, FHCs are required to abide by the principles of honesty and credibility, penetration recognition, reasonableness and fairness, openness and transparency, and independent governance and risk isolation between different legal entities of financial holding group companies are also strengthened.
The rules defined the minimum reasonable scope of related parties of FHCs at their own levels, which includes shareholders, insider related parties and subsidiary bodies as well, and divided related party transactions into different types, namely related party transactions of FHCs and of their subsidiary bodies.
Apart from these, the rules also proposed general internal management requirements and detailed requirements for management of related party transactions of different types, enhanced reporting and information disclosure requirements and provided clear regulatory and supervisory measures.
The rules made corresponding arrangements for transition period, requiring FHCs to optimize, within one year since the date of effect taking of the rules, various rules and governance frameworks and orderly materialize related regulatory requirements to ensure compliance with requirements on related party transaction management upon expiry of the transition period. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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