Anti-monopoly Regulation Against Cross-ownership Of Listed Companies

On January16,2008, China Banking Regulatory Commission andChina Insurance Regulatory Commission signed the “China BankingRegulatory Commission and China Insurance RegulatoryCommission’s memorandum on improving the deep cooperation ofbanking and insurance industries as well as trans-tradesupervision and administration, cooperation and understanding”.The memorandum approved cross-ownership between commercialbanks and insurance industry, which formally brought thecross-ownership issue of financial industry listed companiesinto the public perspective, and has inspired a widespreadconcern. In recent years, many significant cases caused bycross-ownership have frequently emerged in China’s capitalmarket, which inspired a turbulence of securities market.However, unlike other industries, financial industry listedcompanies have unique features and risks. Therefore,cross-ownership of financial industry listed companies caneasily result in the emergence of monopoly, thereby influencingthe national economy. At such economical background, it is important to study the anti-monopoly regulation againstcross-ownership of listed companies from the perspective offinancial industry, so as to improve our country’santi-monopoly legislation, and maintain a good financial marketorder.Firstly, this paper conducted a basic theoretical study oncross-ownership. Cross-ownership refers to the phenomenon inwhich two or more companies, based on special purposes, directlyor indirectly hold each other’s shares to become theirshareholders. Through analyzing its basic concept, type andinducement to monopoly, it built a theoretical principle of thewhole paper. Meanwhile, this paper further discussed uniquefeatures of cross-ownership of financial industry listedcompanies and related special consequences, and analyzed thefeasibility and necessity of anti-monopoly regulation againstsuch companies, thereby reflecting the importance of conductinganti-monopoly regulation against financial industry listedcompanies.Secondly, it requires making reference to other countries’advanced theoretical study and legal system to study the anti-monopoly regulation against cross-ownership of financialindustry listed companies. America’s anti-monopoly legislationhas been at the forefront of the world, and its regulation againstcross-ownership of listed companies, especially againstcross-ownership of financial industry listed companies is worthreferencing and learning. As a typical country withcross-ownership of financial industry listed companies leadingto monopoly, and eventually to economic crisis, Japan has itsunique features on anti-monopoly regulation againstcross-ownership of financial industry listed companies,therefore can give us more instruction related to legislation.Finally, by using financial industry listed companies asentry point, this paper analyzed the current situation of ourcountry’s anti-monopoly regulation against cross-ownership oflisted companies, and discussed the reason for cross-ownershipof listed companies. It focused on the current situation ofregulation against cross-ownership of financial industry listedcompanies from the perspective of legal and administrativeagencies, and pointed out our current deficiencies, such as notspecific enough legislation, too widely scattered law enforcement agencies, etc.. On that basis, this paper gaveconsideration to our country’s special conditions, and proposedsuggestions on improving our country’s anti-monopolyregulation against cross-ownership of financial industry listedcompanies in terms of improving related legislation, such asanti-monopoly law, and reinforcing anti-monopoly supervision,etc..