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...