| Since 1980's, the tide of financial globalization has risen, whichcauses the universal banking system gradually to become a tendency. Inorder to strengthen their financial strength, countries began to deregulatetheir domestic financial market. In order to obtain the competitionsuperiority and the coordination effect, the large-scale financialinstitutions started to establish multiplex financial group to engage in thebank, the securities and the insurance services at the same time. Somecountries even revised their laws to allow this. Although our country hasnot affirmed the status of financial holding company by law, but there hasalready been various financial holding companies in reality. Intra-grouptransaction could be the most important factor to threaten the safety offinancial holding company. Therefore, the connected transaction in thefinancial group must be effectively regulated. This article discusses it inthe following chapters: In chapter 1 the author elaborates the necessity of regulating theconnected transaction in financial holding company based on analyzingthe risks produced by it. Then the author tries to research the value andthe basic principles of its regulation through theoretic point. The intra-group transaction may bring huge risk as well ascoordination effect and cost saving. Because of its duality, whether theintra-group transaction is effectively regulated is critical for a financialholding company's operation. To effectively regulate the intra-grouptransaction of financial holding company, we should firstly make thevalue goal of the regulation clear. Neither efficiency nor safety could beoverlooked in the regulating process. Generally, the value goal is realizedthrough principles. The basic principles for the regulation of theintra-group transaction of financial holding company are as follows:information publication, moderate regulation and classified regulation. In chapter 2 the author concludes the experiences of the regulationof intra-group transaction in financial holding company by comparing thepractice and legislation around the world. In recent years, some international and regional organizations aswell as some developed countries has promoted legislation in order toimplement effective regulation on the financial holding company.Although each country has its own specific provisions, we could still findsome common trend such as strengthening the legislation, establishingproper government supervision system, attaching importance to theself-regulation of finance industry and emphasizing the interior control offinancial institution. In chapter 3 the author carries on an inspection to the status in quo ofintra-group transaction in financial holding company and the regulation ofit in our country, analyzes the shortage of the reality and the possiblecauses behind it, then puts out corresponding suggestions for thebetterment of the regulation system of intra-group transaction in financialholding company in our country. Although our country has not admitted universal banking system yet,many policies have paved the way for the operation of financial holdingcompany. Some financial holding companies in our country just have theappearance of a financial holding company; in fact they are far fromfinancial integration and coordination. The intra-group transactions ofthese financial holding companies are heavily disordered. There wereseveral payment crises caused by improper intra-group transaction. Thereare some primary regulations on intra-group transaction in financialholding company, but still lack of a comprehensive and specializedregulation system. The regulation system of intra-group transaction in financial holdingcompany should be improved by a specialized "Financial HoldingCompany Act". It should set up "fireproof wall" to restrict certain sort ofconnected transactions, and demand financial holding company todisclose its structure and connected transactions. On the other hand, thelaw should establish the functional government supervision system, anddemand the financial h... |
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