China’s Financial Holding Company Legislation Research

With the development of financial globalization and liberalization, the financialholding company is a new form of economic organizations. It is one of the typical formsof the “Mixed” mode. Because of its unique advantage of economics scale, the financialholding company developed rapidly in the global range. However, due to the differencesin financial system, legislative system and development status of each country, it has nota unified definition until now. In the trend of global financial development to the "mixedoperation" by a “separated operation”, the existing “separated management system” isdifficult to meet the needs of the current development. The low competitiveness is notconducive to the high efficiency and liberalization development of the existing financial.Thus, the emergence of "financial holding company" is exactly a transition bridge ofChina’s financial “separate operation” to "mixed operation", in line with the needs ofdiversification and integration in our finance operation.The first part is an overview to the development of financial holding company. Thefinancial holding company is a Holding Group Company which is mainly to financialbusiness, and financial business covering at least two different financial industries.China’s financial holding company’s basic features include four areas: financial servicesmust be absolutely dominant, financial business involves at least two different financialbusiness areas, must exist in the form of holding company,and the particularity andcomplexity of the financial risk. And the author make a specific category in the financialholding company.The second part mainly discusses the legislative status and the need for financialholding companies in China. First, introduce the world’s major national or regionalfinancial holding company legislation, including the unified regulatory combinationwith decentralized regulatory legislation, unified regulatory legislation mode adopted bythe United Kingdom, the way German uses basic finance law. Japan is focused on"financial holding company Readiness Act” and “the creation of a bank holdingcompany special case of the Law”, and developed the “financial system reform law” tolegislate for supplemental financial holding company at the same time, intent to makeregulation of the law concerned with financial holding companies come true in a fullrange. Taiwan takes a direct legislation way to regulate the financial holding company.Secondly, discusses the current situation of the financial holding company legislation. we have not yet made a clear legal requirement about the new transitional economicorganization forms. It supervises management mainly by relevant financial laws andthree financial regulators. China’s financial holding companies are lack of thespecialized regulatory part now. Despite the three regulatory agencies have carried onthe joint conference system to a certain extent, this can only solve the problems ofco-ordination between the three regulatory agencies, but it cannot really solve thefinancial holding company regulatory issues. So the writer put forward the necessary tofinancial holding company legislation in China.The third part is to introduce a legislative mode and route choice of the financialholding company in China. Started with the main problems faced by the financialholding company in China, we proposed three legislative mode of the financial holdingcompany put forward by domestic scholars: The first legislative mode is to run thefinancial holding company regulatory provisions in advance, and introduce relevant lawwhen the time is right; The second legislative mode is to modify the existing financiallaws and to increase the relevant provisions of the financial holding company by meansof legal amendments; The third the legislative mode is to lay down the FinancialHolding Company Law, so as to define all kinds of behaviors and specific system offinancial holding company in all dimension. Analyze the characteristics of the threelegislative modes and choose the right path according to China’s actual situation at thesame time is the third legislative mode: specific legislation.The fourth part is about the system design of financial holding company legislation.The legal system of risk prevention about financial holding company was discussed. Asto the financial holding companies market access and exit system, it includes thequalifications of the promoters, the scale of capital requirements of practitioners, as wellas mergers and acquisitions, bankruptcy and deposit insurance legal system construction;With regard to risk prevention legal system of the financial holding company, wemainly analyzed the information disclosure system and the firewall systems analysis,especially the affect it played in the financial supervision and maintenance of financialstability running; In terms of the governance system of the financial holding company, itcontains three internal governance structure of the financial holding company andexternal pre-commitment system, especially as an innovative means of financialregulatory system of pre-commitment, using the principle of incentive compatibility toachieve balanced development of individual interests and collective value; On the partof financial holding company’s regulatory regime, it includes internal supervision of the financial holding company,"one bank and three association", external regulation of thefinancial industry associations and public opinion.The last part of the content is the legislative framework of financial holdingcompanies in China. Taiwan’s “Financial Holding Company Law” is developed andimplemented in the context of integrated financial services, it is advanced andprogressive. In the background of financial globalization, China should keep pace withthe times and learn from the Taiwan Financial Holding Company Act. The legislativeframework for financial holding companies in China should include the followingaspects: General, Conversion and Segmentation, Business and Finance, Supervision,Liability and Penalties and By-laws part. China should strengthen the supervision andmanagement of the financial holding company, and bring about regulating the financialholding company legislation effectively under the situation of existing institutionalseparate supervision. The purpose is to give full play to the advantage of the economiesof scope of the financial holding company as much as possible, and to regulate thedevelopment of the financial holding company track at the same time, then to reduce thefinancial risk and the probability of crisis, to fully promote the prosperity anddevelopment of China’s financial industry, and to achieve the balance between financialsecurity, freedom and efficiency the three value at last.