China’s central bank is leading a wide-ranging clean-up of the country’s unruly internet finance sector, including a suspension on registering new companies with “finance” in their names, local media have reported.
Internet finance has grown rapidly in China over the past two years, but this growth has also attracted fly-by-night operators and outright fraud.
Last week, multiple agencies led by the People’s Bank of China approved a plan for cleaning up internet finance, respected business news magazine Caixin reported on its website.
The multi-agency task force will undertake a one-year crackdown on fraud and risk in online payments, peer-to-peer lending, equity crowdfunding, wealth management and online insurance, Caixin said.
Analysts have said increased regulation was likely to benefit larger players such as Ant Financial, the Alibaba Group affiliate, and Tencent Holdings by reducing competition from smaller rivals.
The latest plan instructs province-level agencies responsible for registering corporations — known as administrations for industry and commerce — not to approve new registrations of companies when the world “finance” appears in their name or business description, Caixin reported separately.
P2P and crowdfunding are a particular focus of the clean-up, Caixin reported. The PBoC plan forbids P2P companies from fundraising for their own projects or guaranteeing loans.
It also calls for a crackdown on maturity mismatch in P2P lending and “fund pools” in which investor funds are not matched with specific loans but combined into a single pool.
Some P2P platforms have attracted customers by selling short-maturity investment products even when underlying loans are of longer maturity. Then they use sales of new products to fund payments due on maturing ones.
The plan also calls for a crackdown on P2P loans used for mortgage downpayments, which have been blamed for the recent surge in property prices in major cities.
Some 3,984 P2P platforms had loans outstanding of Rmb504bn ($78bn) at the end of March, according to Online Lending House, a website that tracks the industry.
For equity crowdfunding, the plan targets platforms that exaggerate the current or potential profits of the investment project. It also forbids fundraising projects that are classified as equity but are effectively like debt because they promise a fixed payout.
Crowdfunding and wealth management platforms are also barred from selling hedge fund-style investment products to retail investors who do not meet the qualifications for buying them through offline channels, or from packaging multiple such funds into synthetic products, the plan said.
分析人士表示，加强监管很可能减少来自规模较小企业的竞争，从而有利于规模较大的企业，如阿里巴巴集团(Alibaba Group)旗下的蚂蚁金服(Ant Financial)以及腾讯控股(Tencent Holdings)。
追踪P2P贷款行业的网站网贷之家(Online Lending House)的数据显示，截至3月底，大约3984个P2P平台的未偿还贷款总计达到5040亿元人民币（合780亿美元）。