The People's Bank of China announced on Thursday it approved the establishment of two financial holding companies in an effort to strengthen risk prevention and enhance financial regulation.

The newly approved financial holding companies are CITIC Financial Holdings and Beijing Financial Holdings Group. The PBOC, China's central bank, said allowing non-financial enterprises that have substantial control over multiple types of financial institutions to establish financial holding companies and bringing them into the regulatory scope is an important measure to shore up weak links in financial regulation.

Setting up financial holding companies will be conducive to pushing non-financial enterprises to effectively implement segregation of risks between the financial and industrial sectors, preventing risk cross-contagion and realizing centralized and unified management of financial equities, thus promoting regulated and sustainable development of non-financial enterprises, the PBOC said.

The central bank said it will promote other qualified enterprises to apply for the establishment of financial holding companies in a steady and orderly manner. It will also implement comprehensive, continuous and pass-through regulation of financial holding companies, in addition to pushing them to maintain capital abundance, improve corporate governance, strengthen risk segregation and keep enhancing their capabilities to serve high-quality economic development.