New finance law may be passed soon

During yesterday's special legislative session, lawmakers reached a preliminary consensus on a bill that would streamline the banking and financial sectors.

Opposition lawmakers have been insisting that the Financial Holding Company Law (金融控股公司法) should only be passed law if the Financial Supervisory Board Organization Law (金融監督委員會組織法) is also bundled together with the legislation. If created, the board would have broad supervision over the financial industry.

The new agreement between ruling and opposition party caucuses would allow the Financial Holding Company Law to be passed in the current special session with the addition of a `sunrise clause' stipulating that the supervisory board be set up in the next session of the legislature by Nov. 1, and that no holding company licenses be issued before the board is established.

The Financial Holding Company Law may be passed today -- the last day of the two-day special session -- during a review of six financial reform bills.

The law is important because it will allow the nation's banks, insurers and brokerages to cluster under a single corporate structure and accelerate consolidation in the financial industry.

Prior to yesterday's session, legislative speaker Wang Jin-pyng (王金平) invited lawmakers from ruling and opposition parties to conduct a coordination meeting.

People First Party (PFP) and New Party members proposed a sunrise clause in the coordination meeting.

"A new bill should aim at both creating business opportunities and removing loopholes. Without the financial supervisory board law, if any financial conglomerate wants to steal money from a listed [bank or insurance] company, regulators would have no law to act upon against them," said Hsieh Chang-chieh (謝章捷), a PFP legislator.

After listening to the proposals of opposition parties, the DPP caucus decided to compromise on the issue. Originally the DPP was strongly opposed to a sunrise clause being added.

"The promulgation date for the Financial Holding Company Law could be set either on Nov. 1 or Dec. 1, the DPP will not oppose it. However, it could only be decided with the Ministry of Finance's agreement," said Tsai Huang-liang (蔡煌瑯), a DPP caucus convener, yesterday.

Lee Cheng-chong (李正宗), a KMT convener, said the party could accept the sunrise clause and it would be confirmed after a further negotiation between the ruling and opposition parties.

"Following the pass of the Financial Holding Company Law, the finance ministry would require at least three months to complete related rules and regulations regarding the overseeing of financial holding companies. This means that the actual promulgation time for the Financial Holding Company Law would have to be postponed," said Chu Li-luan (朱立倫), a KMT legislator.

"I suggest that the Executive Yuan submit a complete proposal for the financial supervisory board to the Legislative Yuan when the next session begins, to allow for the timing of the passing of the Financial Holding Company Law."