China plans tighter oversight of financial holding companies

Signage for HNA Group Co. is displayed atop the company's building in Beijing, China, on Thursday, Feb. 1, 2018. Photographer: Giulia Marchi/Bloomberg

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 draft proposals Friday. If adopted, the proposals would require the companies to hold specified levels of capital and regulators would scrutinize their ownership structure, related transactions, and source of funding.

Public feedback is sought through Aug. 24 on such structures where “risks have accumulated and are being exposed constantly,” the PBOC said.

The authority last year identified HNA Group Co., Fosun International Ltd., China Evergrande Group, and Tomorrow Holding Co. as “financial holding companies,” as well as internet giants such as Ant Financial.

The firms’ growing role in the nation’s money flows and financial plumbing make them targets for authorities who’ve already shackled over-leveraged acquirers and reined in the sprawling shadow-banking system.

At the end of 2016, about 70 central-government owned enterprises had a total of over 150 financial subsidiaries, a central bank official said in March last year. Another 28 private firms each had stakes in at least five financial units.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.