China begins internet finance clampdown

Author: Ashley Lee | Published: 3 Aug 2015

China’s internet finance sector is growing exponentially, with the country’s interest-rate ceiling prompting investors to flock to online products to receive higher yields.

Alibaba affiliate Ant Financial’s online fund Yu’E Bao is the best example. Launched in 2013, it quickly became the fourth-largest money market fund measured by assets under management in the world.

But money market funds – as well as other products including payment systems, peer-to-peer (P2P) online lending, equity crowdfunding and online insurance – had not been regulated.

The Guideline Opinions on Promoting the Healthy Development of Internet Finance, issued July 18, are a step towards changing that.

"This is the first official guideline issued jointly by government regulatory authorities," said Hu Zhe, partner at King & Wood Mallesons in Shanghai. "Previously there was no official regulation or any rules regulating internet finance, and there was no regulatory authority to supervise their activities."

Mark Parsons, partner...


 

 

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