On 14 October 2021, CHI CBIRC finalized measures for major shareholder supervision.
- Requires banking and insurance institutions to strengthen management of equity and related-party transactions by shareholders, to prevent abuse of shareholder rights.
- Clarifies responsibilities and obligations of major shareholders in risk disposal, information reporting, capital supplementation, and shareholder rights negotiation.
- Measures take effect immediately.
Background
- Contains 8 chapters and 58 articles regulating the behavior of major shareholders.
- Explicitly prohibits major shareholders from improperly interfering in the operations of financial institutions, using equity to provide guarantees for non-related party debts.
- Major shareholders should learn and understand regulations and policies; must use their own funds to purchase shares, ensure transparency of shareholding structure.
- They shall not directly or indirectly cross-hold shares in banking/insurance institutions.
- A major shareholder that pledges more than 50% of equity in the institution shall not exercise their voting rights at the shareholders' general meeting and board meetings.
- Institutions shall regularly verify major shareholders' information, conduct annual evaluations of major shareholders and notify all shareholders of such information.
