Financial Holding Company And Its Legal Regulation

Reform of financial system all over the world is showing a tendency toward a transition from separate operations to universal operations, which has been achieved or been practicing in terms of legislation by developed countries such as England, Japan and U.S. The financial holding company created according to 1990 Financial Modernization Act has become one of the main organization forms of the conglomerates coexisting with the universal bank and financial parent company and its subsidiary. And because of its unique superiority, the financial holding company has become the best choice of the countries whose financial system is changing from separate operations to universal operations. Our entry into WTO confronts us with the historic choice of how to seize the opportunity and greet the challenge, which means that we have to alter the initially established system of separate operation and specialized supervision. In order to evade the present regulation, some financial companies and enterprise groups have created a certain sum of financial holding companies or something like this, but the lag of the related laws and rules is becoming the barrier to the practice of the financial holding company. For this reason, study on the legal regulations of financial holding company is an urgent issue for law science and financial science. Basing its analysis on the legal and economic theory, the article uses such ways as historical analysis and institutional comparison to make a preliminary normative and positive legal research into financial holding company, with the hope that it will contributes to the construction and consummation of the related institution.The article mainly consists of the preface, the main body and the concluding remarks, of which the preface makes a general introduction to the internal and international backgrounds of the development of financial holding company, and then points out that the legal study on financial holding company is important and urgent.The main body comprises four parts. Part Ⅰ makes an analysis of the advantages and disadvantages of the financial conglomerates, suchas financial holding companies, financial parent company and its subsidiary and the universal bank, then basing on the analysis of the holding company and the bank holding company, the article defines the financial holding company as a company that possesses a control power of the financial company such as bank company, insurance company and security company by way of directly or indirectly holding a certain percentage of these companies' shares and other ways and never performs other operations and management. Part II is the evolution of the financial holding company, which makes a research into American legal system of financial holding company. After the analysis of the 1993 Bank Act, Bank Holding Company Act and Financial Service Modernization Act, the author points out that financial holding company is an innovation to evade the law and rules restraining the financial conglomerates. Part III indicates the internal and external causes of Chinese financial transition from separate operation to universal operation after a preliminary introduction to the institutional backgrounds and functions of Chinese separate operation system, and then makes a positive analysis of Chinese financial holding company. Part IV is the legal regulation of financial holding company. In this part, the author analysises the characteristics of the financial supervision systems of England, Japan and U. S, and then furthers its study on the main supervision framework, whose main elements including umbrella regulation, function regulation and information exchange system. In particular, the author puts the emphasis on some distinctive and important legal rules such as antitrust regulation, firewall regulation, enhanced obligation and adequacy requirement. The concluding remarks suggests that it is a lasting and arduous task to build the legal system of financial holding company, and the key to the design of the system, the author thi...