The China Banking and Insurance Regulatory Commission’s website reported on June 17 that in order to improve the corporate governance of bancassurance institutions, strengthen the supervision of shareholder equity, and effectively prevent financial risks, the China Banking and Insurance Regulatory Commission formulated the “Measures for the Supervision of the Conduct of Major Shareholders of Banking and Insurance Institutions (Trial)” (Draft for Solicitation of Comments, as follows: Referred to as the “Measures”). A few days ago, the public solicited opinions.
The “Measures” as a special regulatory provision for the behavior of major shareholders, a total of eight chapters and fifty-eight articles, including general rules, shareholding behavior, governance behavior, transaction behavior, liability and obligations, bancassurance agency responsibilities, supervision and management, and supplementary provisions.
The “Measures” put forward specific requirements on the relevant behavior of major shareholders.
Clarification: Major shareholders of bancassurance institutions shall use their own funds with legitimate sources to buy shares in bancassurance institutions, and may not use non-own funds such as entrusted funds or debt funds to buy shares.
Clarification: The major shareholder of a bancassurance institution shall explain its shareholding structure level by level up to the actual controller, ultimate beneficiary, and the associated relationship or concerted action relationship with other shareholders to ensure that the equity relationship is true and transparent.It is strictly forbidden to hide actual controllers, conceal related relationships, equity holdings, private agreements and other violations of laws and regulations。
Clarification: Major shareholders are prohibited from improperly interfering in the normal operation of bancassurance institutions, using the name of licensed institutions to conduct improper publicity, entrusting or accepting entrustment by others to participate in general meetings of shareholders, requesting banking institutions to issue loans or provide guarantees, etc.
The “Measures” further strengthened the responsibilities and obligations of major shareholders, requiring major shareholders to actively learn and understand regulatory regulations and policies, cooperate in the development of dynamic management of related-party transactions, formulate and improve internal working procedures, and support banks and insurance institutions with insufficient capital and greater risks to reduce or fail Make cash dividends, etc. Unify the regulatory standards of bancassurance institutions, clarify that major shareholders whose equity pledge ratio exceeds 50% shall not exercise voting rights, prohibit bancassurance institutions from purchasing or providing guarantees for non-publicly issued bonds of major shareholders, and directly or indirectly cross-holding shares with major shareholders, etc. . The Measures also require bancassurance institutions to formulate lists of the rights and obligations of major shareholders and lists of negative behaviors, regularly verify and master major shareholder information, conduct annual evaluations of major shareholders and notify all shareholders, and prevent losses caused by abuse of shareholder rights to bancassurance institutions. Major shareholders must recover according to law and actively protect their own rights and interests.
The deadline for comments is July 17, 2021. In the next step, the China Banking and Insurance Regulatory Commission will extensively listen to opinions and suggestions from all parties, further revise and improve the “Measures” and publish and implement them in due course.
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