Decision of the State Council on Implementing the Access Administration of Financial Holding Companies
Decision of the State Council on Implementing the Access Administration of Financial Holding Companies
Decision of the State Council on Implementing the Access Administration of Financial Holding Companies
Guo Fa [2020] No.12
September 11, 2020
The people's governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council and all institutions directly under the State Council,
With a view to strengthening the supervision and administration of financial institutions, of which the shares are controlled by, or that are actually controlled by non-financial enterprises, natural persons and other entities, regulating the behavior of financial holding companies, and preventing systemic financial risks, the following decisions are hereby made:
I. Implementation of the access administration of financial holding companies
Where non-financial enterprises, natural persons and authorized legal persons within the territory of the People's Republic of China that control shares of or actually control two or more different types of financial institutions fall under any of the circumstances as provided herein, they shall apply to the People's Bank of China for approval to establish financial holding companies.
1. For the purpose of this Decision, a financial holding company refers to a limited liability company or joint stock limited company that is established according to the Company Law of the People's Republic of China and this Decision, and that controls shares of or actually controls two or more different types of financial institutions, conducts equity investment management only and does not directly engage in commercial business activities.
2. For the purpose of this Decision, the types of financial institutions include:
(1) commercial banks (excluding rural banks, hereinafter the same) and financial leasing companies;
(2) trust companies;
(3) financial asset management companies;
(4) securities companies, publicly offered fund management companies, and futures companies;
(5) personal insurance companies, property insurance companies, reinsurance companies, and insurance asset management companies; and
(6) other institutions recognized by the financial administration authorities under the State Council.
3. For the purpose of this Decision, the circumstance where an application should be made to establish a financial holding company refers to one of the following circumstances:
(1) if financial institutions, of which the shares are controlled, or that are actually controlled, include commercial banks, the total assets of the financial institutions are not less than CNY500 billion, or the total assets of the financial institutions are less than CNY500 billion, but the assets of the financial institutions other than the commercial banks are not less than CNY100 billion or the total assets under their entrusted management are not less than CNY500 billion;
(2) if financial institutions, of which the shares are controlled, or that are actually controlled, exclude commercial banks, the total assets of the financial institutions are not less than CNY100 billion or the total assets under their entrusted management are not less than CNY500 billion; or
(3) the total assets of the financial institutions, of which the shares are controlled, or that are actually controlled, or the total assets under their entrusted management do not meet the standards stipulated in aforesaid Items 1 and 2, but the People's Bank of China considers it necessary to establish a financial holding company according to the macro-prudential regulatory requirements.
II. Conditions and procedures for establishing a financial holding company
1. In addition to the conditions specified in the Company Law of the People's Republic of China, an applicant for establishing a financial holding company shall meet the following conditions:
(1) Having paid-in registered capital of no less than CNY5 billion and no less than 50% of the total registered capital of the directly controlled financial institutions;
(2) Having shareholders and actual controllers who have good reputation and comply with relevant laws, administrative regulations and relevant regulations of the People's Bank of China;
(3) Having directors, supervisors and senior officers who are qualified for the posts;
(4) Being able to continuously replenish capital for the controlled financial institutions; and
(5) Having sound organizational structure, effective risk management systems, internal control systems, and other prudential conditions.
2. The People's Bank of China shall make a written decision on approval or disapproval of the application within six months from the date of accepting the application for establishing a financial holding company; if it decides not to approve, it shall explain the reasons.
For a financial holding company established upon approval, the People's Bank of China shall issue a license for the financial holding company, and the financial holding company shall register with the market regulatory authority based on the license to obtain a business license. Without the approval of the People's Bank of China, it is not allowed to register as a financial holding company, or to use the words such as "financial holding" and "financial group" in the company name.
Where the establishment of a financial holding company is required according to the provisions hereof but fails to be approved, measures such as transferring the equity of the controlled financial institution, or transferring the actual control right in accordance with the requirements put forward by the People's Bank of China in conjunction with the banking and insurance regulatory authority of the State Council and the securities regulatory authority of the State Council shall be taken.
3. Where a financial holding company changes its name, domicile, registered capital, shareholders holding more than 5% of the equity, or actual controllers, revises the company's articles of association, invests in and holds other financial institutions, or increases or decreases its capital contribution in or shareholding ratio of its controlled financial institutions, resulting in the change or loss of its control, division, merger, dissolution or bankruptcy, it shall file an application with the People's Bank of China. The People's Bank of China shall make a written decision on approval or disapproval of the application within three months from the date of accepting the application.
III. Miscellaneous provisions
1. Before the implementation of this Decision, for those falling under any of the circumstances where an application should be made to establish a financial holding company as stipulated herein, an application for establishing a financial holding company shall be filed with the People's Bank of China within 12 months from the date of implementation of this Decision. Where an application fails to be filed within the time limit, measures such as transferring the equity of the controlled financial institution, or transferring the actual control right in accordance with the requirements put forward by the People's Bank of China in conjunction with the banking and insurance regulatory authority of the State Council and the securities regulatory authority of the State Council shall be taken.
2. Where the financial assets of a non-financial enterprise or an authorized legal person, which are held or actually controlled by such enterprise or legal person,, account for more than 85% of the total assets in its consolidated financial statements, and fall under the circumstance stipulated herein where an application should be made to establish a financial holding company, it may apply for approval to become a financial holding company in accordance with the conditions and procedures for establishing a financial holding company stipulated herein.
3. The People's Bank of China shall formulate implementing rules for conditions and procedures for establishing a financial holding company in accordance with this Decision, and may adopt relevant prudential supervision and administration measures with respect to its organization of the implementation of supervision and administration.
This Decision shall come into force as of November 1, 2020.
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Guo Fa [2020] No.12
September 11, 2020
The people's governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council and all institutions directly under the State Council,
With a view to strengthening the supervision and administration of financial institutions, of which the shares are controlled by, or that are actually controlled by non-financial enterprises, natural persons and other entities, regulating the behavior of financial holding companies, and preventing systemic financial risks, the following decisions are hereby made:
I. Implementation of the access administration of financial holding companies
Where non-financial enterprises, natural persons and authorized legal persons within the territory of the People's Republic of China that control shares of or actually control two or more different types of financial institutions fall under any of the circumstances as provided herein, they shall apply to the People's Bank of China for approval to establish financial holding companies.
1. For the purpose of this Decision, a financial holding company refers to a limited liability company or joint stock limited company that is established according to the Company Law of the People's Republic of China and this Decision, and that controls shares of or actually controls two or more different types of financial institutions, conducts equity investment management only and does not directly engage in commercial business activities.
2. For the purpose of this Decision, the types of financial institutions include:
(1) commercial banks (excluding rural banks, hereinafter the same) and financial leasing companies;
(2) trust companies;
(3) financial asset management companies;
(4) securities companies, publicly offered fund management companies, and futures companies;
(5) personal insurance companies, property insurance companies, reinsurance companies, and insurance asset management companies; and
(6) other institutions recognized by the financial administration authorities under the State Council.
3. For the purpose of this Decision, the circumstance where an application should be made to establish a financial holding company refers to one of the following circumstances:
(1) if financial institutions, of which the shares are controlled, or that are actually controlled, include commercial banks, the total assets of the financial institutions are not less than CNY500 billion, or the total assets of the financial institutions are less than CNY500 billion, but the assets of the financial institutions other than the commercial banks are not less than CNY100 billion or the total assets under their entrusted management are not less than CNY500 billion;
(2) if financial institutions, of which the shares are controlled, or that are actually controlled, exclude commercial banks, the total assets of the financial institutions are not less than CNY100 billion or the total assets under their entrusted management are not less than CNY500 billion; or
(3) the total assets of the financial institutions, of which the shares are controlled, or that are actually controlled, or the total assets under their entrusted management do not meet the standards stipulated in aforesaid Items 1 and 2, but the People's Bank of China considers it necessary to establish a financial holding company according to the macro-prudential regulatory requirements.
II. Conditions and procedures for establishing a financial holding company
1. In addition to the conditions specified in the Company Law of the People's Republic of China, an applicant for establishing a financial holding company shall meet the following conditions:
(1) Having paid-in registered capital of no less than CNY5 billion and no less than 50% of the total registered capital of the directly controlled financial institutions;
(2) Having shareholders and actual controllers who have good reputation and comply with relevant laws, administrative regulations and relevant regulations of the People's Bank of China;
(3) Having directors, supervisors and senior officers who are qualified for the posts;
(4) Being able to continuously replenish capital for the controlled financial institutions; and
(5) Having sound organizational structure, effective risk management systems, internal control systems, and other prudential conditions.
2. The People's Bank of China shall make a written decision on approval or disapproval of the application within six months from the date of accepting the application for establishing a financial holding company; if it decides not to approve, it shall explain the reasons.
For a financial holding company established upon approval, the People's Bank of China shall issue a license for the financial holding company, and the financial holding company shall register with the market regulatory authority based on the license to obtain a business license. Without the approval of the People's Bank of China, it is not allowed to register as a financial holding company, or to use the words such as "financial holding" and "financial group" in the company name.
Where the establishment of a financial holding company is required according to the provisions hereof but fails to be approved, measures such as transferring the equity of the controlled financial institution, or transferring the actual control right in accordance with the requirements put forward by the People's Bank of China in conjunction with the banking and insurance regulatory authority of the State Council and the securities regulatory authority of the State Council shall be taken.
3. Where a financial holding company changes its name, domicile, registered capital, shareholders holding more than 5% of the equity, or actual controllers, revises the company's articles of association, invests in and holds other financial institutions, or increases or decreases its capital contribution in or shareholding ratio of its controlled financial institutions, resulting in the change or loss of its control, division, merger, dissolution or bankruptcy, it shall file an application with the People's Bank of China. The People's Bank of China shall make a written decision on approval or disapproval of the application within three months from the date of accepting the application.
III. Miscellaneous provisions
1. Before the implementation of this Decision, for those falling under any of the circumstances where an application should be made to establish a financial holding company as stipulated herein, an application for establishing a financial holding company shall be filed with the People's Bank of China within 12 months from the date of implementation of this Decision. Where an application fails to be filed within the time limit, measures such as transferring the equity of the controlled financial institution, or transferring the actual control right in accordance with the requirements put forward by the People's Bank of China in conjunction with the banking and insurance regulatory authority of the State Council and the securities regulatory authority of the State Council shall be taken.
2. Where the financial assets of a non-financial enterprise or an authorized legal person, which are held or actually controlled by such enterprise or legal person,, account for more than 85% of the total assets in its consolidated financial statements, and fall under the circumstance stipulated herein where an application should be made to establish a financial holding company, it may apply for approval to become a financial holding company in accordance with the conditions and procedures for establishing a financial holding company stipulated herein.
3. The People's Bank of China shall formulate implementing rules for conditions and procedures for establishing a financial holding company in accordance with this Decision, and may adopt relevant prudential supervision and administration measures with respect to its organization of the implementation of supervision and administration.
This Decision shall come into force as of November 1, 2020.
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