Join NexChange - the professional
network for the financial services
industry - and receive a free one-
year subscription to Forbes
Overwhelmed China regulators put a freeze on new internet finance startups
China’s internet finance space is red hot and growing at an unprecedented speed, so much that the regulators have now stopped new internet finance companies from registering just so they can keep up.
Citing Chinese media sources, TechInAsia reports that Beijing, Shanghai, and Shenzhen have all stopped new internet finance companies from registering. That means all internet companies described in terms of investments, assets, and shares — or involved in any kind of finance management or lease financing — will be blocked. This doesn’t effect companies already registered. It is a move to slow down the market so officials have time to assess what regulation are needed.
China has regulators have been trying to get to grip with the country’s runaway fintech sector for some time, especially when it comes to p2p lending. Last month the China Banking Regulatory Commission (CBRC) issued a draft of regulations aimed at their providers. The draft, which is followed by a one-month consultation period, represents the growing awareness of this vast unregulated niche in China’s financial sector.
According to the Wall Street Journal, the p2p space alone comprises 2,612 platforms operating in the country. Regulators are likely to have their work cut out as the economy slows and more internet finance companies, most notably in p2p lending, run into trouble.