SHANGHAI, June 17 (Reuters) - Chinese regulators on Thursday
published draft rules to regulate behaviour of major
shareholders of banks and insurers, in a bid to improve
corporate governance and protect the interest of other
The rules, published by the China Banking and Insurance
Regulatory Commission (CBIRC), will restrict major shareholders'
activities related to investment, transactions and corporate
China has already taken a series of measures https://www.reuters.com/article/china-banks-idUKL4N24T0G4
to rein in the power of dominant shareholders in financial
institutions, following the collapse of the once-acquisitive
insurance giant Anbang Group, and the failure of Baoshang Bank,
which was taken over by the government due to insolvency.
Both high-profile scandals involved major shareholders
exploiting their dominant positions to misuse funds for reckless
investment and transactions, threatening stability of China's
The draft rules, which formalise piecemeal measures rolled
out over past years, define major shareholders as those with the
largest stake, or control, in a bank or insurer.
Shareholders with a 15% stake or more in a financial
institution are also deemed major, while the threshold for city
and rural banks is lower, at 10%.
Restricting their investing behaviour, the rules require
that such shareholders must make "prudent" investment in
financial institutions, with their own, legally-obtained
Major shareholders must be transparent regarding their
ownership structure, and are barred from "cross-shareholding"
with banks or insurers, the rules said.
Regarding corporate governance, major shareholders must not
misuse their rights to improperly interfere with independent
operations of the banks or insurers they invest in, according to
The rules also restrict murky transactions by major
shareholders to prevent them from "obtaining improper benefits",
such as improperly taking out loans from banks.
The draft rules are published for public consultation until
(Reporting by Samuel Shen, Cheng Leng and Andrew Galbraith;
Editing by Himani Sarkar & Simon Cameron-Moore)