• CHI CBIRC proposed trial measures to supervise the behavior of major shareholders of banking and insurance institutions, to improve corporate governance, prevent risks.
• Major shareholders are those that hold more than 15% of equity in specified banking and insurance institutions, hold the most shares, or have a controlling influence.

Measures

• 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.

Effectiveness

• Consultation period ends on 17 July 2021.