South China Morning Post
Chairmen and executives of Chinese financial holding companies face tighter scrutiny under new central bank rules
Chairmen and senior executives of Chinese financial holding companies will need to have at least eight years of financial industry experience, according to a new set of rules announced by the central bank on Friday. The time they spend in the same role at a holding company will also be limited. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. Effective from May 1, the rules are designed “to standardise the operations of financial holding companies, and prevent operational risks”, the PBOC said. China’s big tech groups such as Ant Group, controlled by Chinese billionaire Jack Ma, and Tencent, controlled by fellow billionaire Pony Ma, are grappling with growing scrutiny from the central bank and other regulators, which have unleashed a raft of new regulations and anti-trust inquiries in recent months. Tencent Chairman and CEO Pony Ma Huateng attends the WAIC (World Artificial Intelligence Conference) in Shanghai, China, September 17, 2018. Photo: Reuters alt=Tencent Chairman and CEO Pony Ma Huateng attends the WAIC (World Artificial Intelligence Conference) in Shanghai, China, September 17, 2018. Photo: Reuters > The arrangement involves Ant Group placing its major businesses, including its lucrative credit origination platform, its investment technology unit and its budding insurance operations into the financial holding company, according to people familiar. In March, Bloomberg reported that social media and gaming giant Tencent may also be required to establish a financial holding company to include its banking, insurance and payments services. In the trial measures announced on Friday, the PBOC said chairmen and senior executives of financial holding companies may also need to have experience in “economy-related work” for at least 10 years. Apart from their work experience, they will also be prohibited from holding the same position in a financial holding company for more than a decade. Independent directors are banned from serving the same financial holding company for more than six years, and their directorship are capped at two holding companies. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.