Study On The Internal Control Law System Of Financial Holding Company

The finance holding company which is a enterprise group managed severalfinancial industries have the high risk of managing the financial business and the riskof its organization. So keeping the stable management of the financial holdingcompany is an important issue. Since the financial holding company is a new type oforganization produced in financial innovation, various countries make special lawsand supervision regulations to supervising it. However, the external causes only workwith the internal ones, the internal control which is born in the inside of the companyand is the first line of company to resist the risk in the business play an important rolein constrainted the management of financial holding company and controlled risk.Along with the development of the financial globalization, regulator authorities ofcountries have endorsed the idea of the priority concept of internal control. Theregulation of internal control not only limited in the meaning of autonomy action ofcompany, but also became a vital legal arrangement for the supervision of financialinstitutions. The legislation of China have corresponding regulations with internalcontrol which apply to banks, securities, insurances and other financial industries.Meanwhile, for the statue quo of separate operation and separate supervision ofChinese financial market, the legislation on the financial holding company internalcontrol is still in the blank. Therefore, this article reflects the significance ofdiscussing the internal control system of financial holding company and improvingthe legislation of the internal control. This paper is based on constructing the necessity to the legal system of internalcontrol of financial holding company and the suggesting improvement. Throughanalysing the basic theories of the internal control of financial holding company,taking example of relevant legislation on internal control for other counties,constructing and improving the our country’s internal control system of financialholding company.This article has four parts. The first part taking the trend of financialglobalization and mixed operation of financial as foreshadowing to lead the thinkingabout the internal control of financial holding company. Put forward the meaning andpurpose of this article and point out the innovations of this paper. The second partintroduce the development situation of financial holding company, the advantage ofinternal control laws and the structure and business risks of financial holding company.Supplying the foundation to the next part about how to build up the law system ofinternal control for financial holding company. The third part is defined the internalcontrol system, reviewed the history of internal control. Meanwhile analysed thelegislation about the internal control system of our country. Through the analysis thelacking of external supervision to financial holding company, to prove the necessity ofput the internal control of financial holding company into effect. The fourth part islegal suggestion. For the above content, the author thinks that it shall establish theinternal control law system to financial holding company and puts forward thecorresponding suggestions. A.improving the governance of financial holding companyto provide the effective environment for implementing the internal control system. B.To perfect the auditing and reporting system which apply to the financial enterprisegroup. C. Establishing the firewall system of financial holding company. D. Proposalthe legal responsibility of the internal control.