China has issued a set of comprehensive guidelines on internet finance to regulate its fast-growing internet finance industry, China Business News reported on Tuesday.
The Central Bank of China and related state departments jointly issued the guidelines, which cover third-party payment, peer-to-peer (P2P) lending, equity crowdfunding, internet insurance and real estate financial products. The authorities will work with bank regulators to set up a warning system for financial risks and facilitate the sharing of information between regions and departments. The reforms will take one year to implement and are scheduled to be completed at the end of March 2017.
China’s internet finance has been in a stage of explosive development since 2013, covering a wide range of financial services such as online money transfer, P2P lending, equity crowdfunding and online wealth management. However, laws and regulations have not kept up with these developments. Some problems and hidden risks have been exposed. According to industry data provider Wangdaizhijia, more than 1,200 P2P firms are in trouble. These either had bosses who have run away with investors’ money or they have closed down.
The new regulations aim to avoid potential risks while providing a healthy and orderly environment for the internet finance sector. As the first comprehensive set of regulations for internet finance businesses, the new rules will have an extensive and far-reaching influence on the internet finance sector in the country.
(Top photo from http://www.moneysedge.com)