In order to regulate the related transactions of financial holding companies, promote the sound operation of financial holding companies, and prevent financial risks, the People's Bank of China has formulated the "Measures for the Administration of Related Transactions of Financial Holding Companies" (hereinafter referred to as the "Measures") and officially issued it.

The financial holding company has a large number of participating institutions, complex business and organizational structure, large volume of financial activities and high correlation, and standardizing the management of related party transactions is an important part of strengthening and improving the supervision of financial holding companies, and an important part of implementing the overall deployment of strengthening the financial stability guarantee system of the Party's 20th National Congress. The Measures clarify that financial holding companies bear the main responsibility for the management of connected transactions of financial holding groups, regulate the operation of intra-group transactions, guide and urge subsidiary institutions to do a good job of connected transactions management on the basis of their own management, and unified management of the group's external connected transactions and their risk exposure. The promulgation and implementation of the Measures will help promote financial holding groups to improve the management level of connected transactions, prevent benefit transmission, risk contagion and regulatory arbitrage, and improve the macro-prudential policy framework.

According to the characteristics of China's financial holding companies, the Measures define the types of related transactions of financial holding companies and financial holding groups in accordance with the principle of substance over form and penetration, specify the prohibited behaviors, and require them to set the limits of related transactions. Financial holding companies are required to improve the pricing mechanism of connected transactions, establish and improve related transaction management, reporting and disclosure systems, and establish special audit and internal accountability mechanisms. At the same time, clarify the People's Bank of China's relevant regulatory arrangements.

In the next step, the People's Bank of China will strengthen regulatory cooperation with relevant departments, guide and urge financial holding companies to earnestly implement the requirements of the Measures, strengthen the supervision of connected transactions of financial holding companies, promote the healthy and orderly development of financial holding groups, and maintain the stability of the financial system.

Managing Editor: Yang Xiting