Photo taken on June 19, 2019 shows the building of the People's Bank of China, the Chinese central bank in Beijing. (Xinhua/Wan Xiang)
BEIJING, Feb. 10 (Xinhua) -- The People's Bank of China (PBOC), the Chinese central bank, unveiled on Thursday rules to regulate related-party transactions of financial holding companies to boost their stable operation and guard against financial risks, reported Xinhua Finance.
The rules, which will take effect from March 1, 2023, define the related parties of financial holding companies, activities prohibited for them and the types of related-party transactions of financial holding groups and require financial holding companies to set limits on related-party transactions.
It also requires financial holding companies to optimize related-party transaction pricing mechanism, establish and enrich the related-party transaction management, reporting and disclosure systems, and set up tailored auditing and internal accountability mechanisms.
Financial holding companies, which are large in number and complicated in business and organizational structure, involve in financial activities of great value and high relevance in China and serve as an important part to reinforce the financial stability guarantee system.
In future, PBOC will strengthen cooperation with related departments to tighten related-party transaction supervision over financial holding companies and foster the healthy and orderly development of financial holding groups to maintain the stability of financial system in China. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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