Regulators order Ant Group overhaul
▶ Govt to create fair market, continue support for private firms: official
Ant Group will apply to transform itself into a financial holding company as part of a multifaceted rectification plan that touches on various aspects of the firm’s businesses, including payment and consumer data, a senior Chinese official said on Monday, after top financial regulators summoned the fintech giant for another regulatory talk over its problematic financial business practices.
The interview was intended to have Ant face up to “serious problems” in its financial businesses and the seriousness of the overhaul, Pan Gongsheng, deputy governor of People’s
Bank of China, said in the statement.
The latest interview followed two interviews in early November – which were the prelude to the suspension of Ant’s dual IPO – and another in late December.
Ant was required to align itself with regulatory requirements, and the planned rectification plan and the company itself should hold to the original goal of “serving the real economy and the masses,” read the statement, noting that the firm needs to ramp up fintech innovation on the premise of conforming with prudent regulatory requirements and improve its international competitiveness in the sphere of fintech.
As part of the “comprehensive and feasible” rectification plan Ant formulated under the supervision of the financial regulators, the company will apply to transform itself into a financial holding firm. All entities engaging in financial activities will be included in this holding firm and subject to regulatory oversight. Risk- reduction measures will also be improved to rein in affiliate transactions.
Additionally, Ant is required to correct anti- competitive behavior in the payment business, give consumers more choices in payment methods, break improper connections between Alipay and other financial products such as Huabei and Jiebei, and correct irregular behavior in the payment link.
Ant said that the move is conducive to the healthy and orderly development of the industry, and it is imperative to maintain a fair and competitive market environment. The company will continuously improve the service level for the real economy, small and microsized enterprises and consumers, it said.
The official Economic Daily newspaper said that making the rectification plan is only the first step and the group needs to fully meet regulatory requirements without any compromise.
Other platforms should also follow regulatory requirements, the article said.
The outline is becoming clearer as to where platform companies represented by Ant will go, for the idea of standardized development has become clearer, the framework of the rectification plan has become clearer, and the attitude of fair supervision and open cooperation has become clearer, said the other opinion piece run by the Xinhua News Agency.
The financial regulators will create a fair and competitive market environment, continue to support private capital to carry out fintech activities in accordance with the law, and stimulate market vitality and the technological innovation capabilities of private capital, Pan said.