Central Bank Issues New Rules on Firms' ManagementThe central People's Bank of China has established new regulations -- the Enterprise Group Financial Company Management Method -- to help boost the development of State-owned firms.The central bank said Monday the system is based on the revision of the former Temporary Management Method of the Enterprise Group Financial Company. Enterprise financial companies are non-banking financial institutions providing middle or long-term financial advice to companies in technical changes, new product development and sales. The first enterprise financial companies were set up 13 years ago. So far, a total of 69 businesses, whose assets make up one-third of the State-owned firms' assets, have set up their own financial companies. The new version of the management method gives a clearer definition about the functions of these financial companies and is aimed at improving their regulation to ensure healthy development, said a top official with the central bank. Now, a financial company must have at least 300 million yuan (US$36 million) in assets. The majority of these assets should be owned by the firms' member companies, with shares from outside not exceeding 40 per cent. The new version of the management method has also laid down stricter rules about the ability of the financial companies, which is aimed at supporting the development of large-scale and profit-making enterprise groups, while driving out the low-quality ones, said the official. |
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