Four Things to Know About the Sweeping Regulatory Changes Coming for Financial Holding Companies
China is rolling out a new regulatory regime for companies with significant operations in the financial sector, almost two years after the central bank flagged plans to tighten oversight amid concerns over the potential risks that such groups could pose to the financial system.
Anbang Insurance Group Co. Ltd., HNA Group Co. Ltd. and Tomorrow Holding Co. Ltd. were among the most high-profile companies to move aggressively into the banking, insurance and trust businesses only to get into financial trouble that required the government to step in and restructure them and defuse the risks they had built up. The new regulations, which were first flagged in a draft released by the People’s Bank of China (PBOC) in July 2019, are aimed at preventing these disasters from happening again and ensuring that other rapidly expanding firms, such as Ant Group Co. Ltd., which operates the Alipay payments platform, don’t engage in the same risky conduct.
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