The China Banking and Insurance Regulatory Commission (CBIRC) and the People’s Bank of China (PBoC), the country’s central bank, are reportedly planning to impose “special and innovative regulatory measures” on fintech giants.
The move, which is aimed at eliminating monopolistic practices and bolstering risk controls, comes after China slammed brakes on Ant Group’s $37bn listing last month.
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In an article, CBIRC chairman and PBoC party secretary Guo Shuqing outlined regulations for over the next five years, Bloomberg reported citing Shanghai Securities News.
Shuqing said that financial innovations are a “double-edged sword”, added that there is little “experience in legal standards and risk monitoring for mobile payments or internet borrowing and insurance in our country”.
In addition, China also planning a deeper antitrust oversight of technology firms like Alibaba Group Holding and Tencent Holdings, the report added.
It is being believed that these firms entered into the finance domain with less oversight and that they pose a growing challenge to traditional banks and regulators.
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By GlobalDataThis move has become a national agenda as China’s top three watchdogs, the PBoC, CBIRC and the CSRS consider imposing regulations to curb financial risks, the Bloomberg report added.
The chances of Ant Group’s public listing next year are also slim, according to the regulators.
Guo said: “Without adequate capital, financial services will get into trouble sooner or later.
“The regulations should cover all financial institutions, businesses and products. Online loan companies have skirted the rules under the camouflage of ‘financial innovation’.”
PBoC governor Yi Gang in an article urged imposing additional regulations on systemically important financial institutions, under a five-year plan that kicks off next year.
Meanwhile, CSRC chairman Yi Huiman proposed direct financing and accelerate bond market developments.
