The first application for the establishment of a financial holding company by private capital was accepted by the central bank on the last day before the Spring Festival holiday. The central bank announced on the 30th that it has accepted the establishment of financial holding companies by China Wanxiang Holding Co., Ltd. (hereinafter referred to as “Wanxiang holding”) and Shenzhen Zhaorong Investment Holding Co., Ltd. (hereinafter referred to as “Zhaorong investment”). Among them, Wanxiang holdings is the first private enterprise to be accepted.
Since the release of a series of new regulations on the management of 2020 annuity holding company, up to now, the central bank has accepted five applications for the establishment of financial holding companies. At present, among the five companies that have accepted the application, there are many different types of capital, including central enterprises, local state-owned enterprises and private enterprises represented by Wanxiang holdings.
Insiders pointed out that this shows the regulators’ attitude of “treating all kinds of capital equally”. With the normalization of the approval of financial holding companies, it is expected that more applications for the establishment of financial holding companies will be accepted this year, and the first batch of financial holding companies are also expected to be officially approved for business.
Wanxiang holdings may become the first private financial holding company
Wanxiang holding and Zhaorong investment are the third batch of acceptance institutions announced by the central bank. Previously, CITIC Group, Everbright Group and Beijing Financial Holding have been accepted by the central bank. Among them, CITIC, Everbright and Zhaorong are large central enterprises, Beijing financial holding is a local state-owned enterprise, and only Wanxiang holding is a private enterprise.
According to the announcement of the central bank, the shareholding structure of Wanxiang holdings is as follows: Lu weiding, chairman of Wanxiang holdings, holds 74.57%, Shanghai guandingze Co., Ltd. holds 20%, and Xiao Feng, vice chairman of Wanxiang holdings, holds 5%. According to tianyancha data, Lu weiding is also the actual controller of Shanghai guandingze Co., Ltd., with a shareholding ratio of 70%.
Dong ximiao, chief researcher of Zhaolian finance, told the financial associated press that Wanxiang holdings is the only non-financial enterprise with private capital applying for the establishment of a financial holding company, and there are also a large proportion of individual shareholders, which shows that the principle and direction of the regulatory authorities to support the development of private economy and private enterprises and guide private capital to enter the financial industry are unswerving.
It is understood that Lu weiding is a key figure for Wanxiang holdings to enter the financial industry. Since he served as vice president of Wanxiang Group in 1992, Lu weiding has focused on the expansion of the financial sector. Today, the financial territory of Wanxiang Holdings has been involved in many industries such as banking, insurance, fund, trust, leasing, futures and so on.
According to incomplete statistics by the financial Associated Press, at present, there are as many as 20 financial institutions controlled by Wanxiang system. According to tianyancha data, Wanxiang holdings directly holds 37.32% equity of Minsheng life, 76.55% equity of Wanxiang trust, 100% equity of Wanxiang leasing, 60% equity of Tonghui futures and 20.88% equity of Shangrao bank.
Minsheng life insurance and Wanxiang trust are important pieces in Wanxiang holding’s financial territory. Minsheng life insurance holds 40% equity, China Zheshang Bank Co.Ltd(601916) 4.29% equity of Tonghui Futures Co., Ltd., 50% equity of Zheshang fund and 41.1% equity of Tonglian payment. Last year, Wanxiang holdings tried to win 100% control of Zheshang fund with Minsheng life, but so far it has failed. In addition, Wanxiang Sannong group, a wholly-owned subsidiary of Wanxiang trust, has become the second largest shareholder of e-commerce bank with a shareholding ratio of 26.78%.
In recent years, the financial “full license” has ushered in strong supervision. It is imperative for Wanxiang holdings to establish a financial holding company. According to the decision on the implementation of access management of financial holding companies issued by the State Council in September 2020 and the Trial Measures for the supervision and administration of financial holding companies issued by the central bank, the controlling shareholders and actual controllers of financial holding companies shall be domestic non-financial enterprises, natural persons and recognized legal persons; Substantial control of two or more types of financial institutions; If the total assets or entrusted assets of a financial institution under substantial control reach a certain scale, or a financial holding company needs to be established in accordance with the requirements of macro prudential supervision, a financial holding company shall be established and included in the supervision.
Zeng Gang, deputy director of the national finance and development laboratory, said that some large Internet platforms also belong to private capital that needs to set up financial holding companies. The application of Wanxiang holdings to establish a financial holding company was accepted, which fully shows that the supervision treats all kinds of capital equally. It is expected that the applications of financial holding companies on the Internet platform will be accepted in succession in the future.
financial holding batch has entered the normal state, and more actions are expected in the future
Zeng Gang believes that with the normalization of the approval of financial holding companies, financial holding companies will usher in a new stage of licensed operation. In the future, more applications for the establishment of financial holding companies will be accepted. The first batch of institutions applying are expected to receive formal approval this year, and there will be a variety of types of financial holding companies in the future.
“The inclusion of financial holding companies in supervision will help to make up for the shortcomings of supervision, reduce regulatory arbitrage and prevent financial risks, which is of great significance to better serve the real economy.” Zeng Gang said that the current regulation supports the compliance development of financial holding companies and follows the regulatory principle that all financial businesses must be licensed, fully covered and consistent. The supervision of financial holding companies will safeguard the safety and healthy development of China’s current financial system.
In addition, Dong ximiao added that the “access decision” and the “financial control measures” complement the institutional weaknesses of the supervision of China’s financial holding companies, which will help to carry out the access management and continuous supervision of financial holding companies in accordance with the law and regulations, better prevent financial risks and maintain financial stability and financial security. However, the relative principles stipulated in the financial measures should be gradually improved in practice in the next step, and detailed rules on consolidated supervision, capital management, related party transactions, large amount risk exposure and so on should be issued as soon as possible.
