Guide­lines forWeb fi­nance com­pa­nies soon

China Daily (Canada) - - FRONT PAGE - By JIANG XUEQING andMENGJING

China will soon come out with guide­lines for the healthy devel­op­ment of the In­ter­net fi­nance sec­tor, a top bank­ing of­fi­cial said onWed­nes­day.

Pan Gong­sheng, deputy gover­nor of the cen­tral bank and a mem­ber of theNa­tional Com­mit­tee of the Chi­nese Peo­ple’s Po­lit­i­cal Con­sul­ta­tive Con­fer­ence, said that the Peo­ple’s Bank of China, the na­tion’s cen­tral bank, will play a lead role in for­mu­lat­ing the guide­lines and also es­tab­lish a reg­u­la­tory frame­work for the In­ter­net fi­nance sec­tor.

he up­com­ing reg­u­la­tions have sparked in­ter­est among mem­bers of the CPPCC Na­tional Com­mit­tee this year as In­ter­net fi­nan­cial prod­ucts and ser­vices have grown rapidly in China.

China has al­ready be­come the world’s largest peer-topeer lend­ing mar­ket. By the end of Septem­ber 2014, about 1,400 peer-to-peer lend­ing plat­forms had raised fund­ing of 110 bil­lion yuan ($18 bil­lion). The to­tal as­sets of Yu’ebao, an on­line mon­e­tary fund op­er­ated by the Chi­nese e-com­merce gi­ant Alibaba GroupHold­ing Ltd, amounted to 578.9 bil­lion yuan at the end of last year.

With the fast devel­op­ment of In­ter­net fi­nance, the ex­ist­ing reg­u­la­tion sys­tem, which re­lies mainly on ad­min­is­tra­tive reg­u­la­tion, can no longer cater to the grow­ing de­mands of the fi­nan­cial sec­tor, He Qiang, a pro­fes­sor with the Cen­tral Uni­ver­sity of Fi­nance and Eco­nomics, said in his pro­pos­als to China’s top ad­vi­sory body this year.

The on­go­ing fi­nan­cial re­form must move to­ward strength­en­ing mar­ket reg­u­la­tions to un­lock the full po­ten­tial, said He, who is also a mem­ber of the CPPCCNa­tional Com­mit­tee.

“The gov­ern­ment

should make a sci­en­tific risk as­sess­ment sys­tem for In­ter­net fi­nance based on quan­ti­ta­tive in­di­ca­tors, rather than call­ing off fi­nan­cial prod­ucts and ser­vices sim­ply be­cause they­may cause rel­a­tively high fi­nan­cial risks,” he said.

For in­no­va­tive fi­nan­cial prod­ucts with large vol­ume, he sug­gested that the gov­ern­ment should con­sider the rel­e­vant fi­nan­cial in­sti­tu­tion’s abil­ity to con­trol and han­dle the risk, in­stead of tight­en­ing reg­u­la­tions due to pos­si­ble neg­a­tive ef­fects as­so­ci­ated with such prod­ucts.

The cen­tral com­mit­tee of the China Zhi Gong Party, one of the coun­try’s eight non- Com­mu­nist par­ties, made a pro­posal to theCPPCCNa­tional Com­mit­tee, urg­ing the au­thor­i­ties to put the var­i­ous types of In­ter­net fi­nan­cial prod­ucts and ser­vices un­der the fi­nan­cial reg­u­la­tory frame­work of the cen­tral bank, the na­tion’s bank­ing, se­cu­ri­ties and in­sur­ance reg­u­la­tors as well as lo­cal fi­nan­cial bu­reaus.

Pan from the PBOC said dur­ing an In­ter­net fi­nan­cial fo­rum in Novem­ber that the cen­tral bank would adopt an open and tol­er­ant stance while designing the reg­u­la­tory frame­work. The PBOC will leave cer­tain space for the devel­op­ment of In­ter­net fi­nance while drawing the bot­tom line clearly, he said.

Zhang Daosheng, a spokesman for Zhe­jiang Ant Small & Mi­cro Fi­nan­cial Ser­vices Group Co, an af­fil­i­ate of Alibaba, told China Daily on Wed­nes­day that any se­ri­ous player in the In­ter­net fi­nance sec­tor would love to see de­tailed reg­u­la­tions for the sec­tor.

“Reg­u­la­tions and poli­cies are used to guide the devel­op­ment and di­rec­tion of the en­tire sec­tor. We would be happy to know the dos and don’ts,” Zhang said.

Peng Lei, chief ex­ec­u­tive of­fi­cer of Ant Fi­nan­cial, said in Fe­bru­ary that her com­pany is “em­brac­ing su­per­vi­sion”. Peng, whose Ant Fi­nan­cial runs Ali­pay, China’s largest on­line pay­ment tool, said the size of the com­pany re­quires it to keep im­prov­ing its risk con­trol abil­ity and com­mu­ni­ca­tion skills with su­per­vi­sors to se­cure more room in in­no­va­tion.

She said Ant Fi­nan­cial will open its sys­tem to the cen­tral bank and other au­thor­i­ties so that they will know its data in real time. Con­tact the writ­ers at jiangx­ue­qing@ chi­nadaily.com.cn and mengjing@ chi­nadaily.com.cn

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