Rumor: China Suspends New Business Registration of Online, Offline Finance Firms
Caixin.com, 4/21/16
China recently initiated remediation work to address problems in the online finance industry, and during this period all Chinese provinces will temporarily suspend registration services for enterprises containing finance-related words in their names or business scope descriptions, according to online media outlet Caixin, citing multiple sources close to the matter.
On April 14, the People's Bank of China issued a plan to address risky Internet finance programs, which requires each provincial-level government to work with finance industry regulators to investigate companies involved in third-party payments, P2P lending, equity crowdfunding, online insurance, and online asset management, beginning with enterprises listed in official industry and commerce registration systems. The plan calls for revoking the business licenses of companies that have not been approved by supervisory authorities. P2P companies will be asked to make changes to their business names and operation scopes, so that if a company's business scope states that it is "authorized to offer financial intermediary services through technology methods including the Internet," then the company's name should be changed to include the description "online loan information intermediary." Under the Central Bank's requirements all rectification work must be completed before the end of January 2017.
Cities with developed Internet finance industries including Shanghai, Shenzhen, and Beijing have already begun implementing the rectification requirements.
Editor's Note: For more information on this topic, please see "Rumor: Shanghai Halts Registrations of Online Finance Companies," MD 1/10/16, "Rumor: Beijing Halts Registrations of Online Finance Companies," MD 1/10/16 and "Rumor: Shenzhen Halts Registrations of Online Finance Companies,"MD 1/05/16 issues.
Keywords: regulation government policy Internet People's Bank of China P2P online insurance crowdfunding online lending financial services
Sending
