According to the Chinese official media CCTV, the financial management departments of the People’s Bank of China (PBOC), the China Banking Regulatory Commission (CBRC), the China Securities Regulatory Commission (CSRC) and the Foreign Trade Administration (FTA) jointly held regulatory interviews with some online platform companies engaged in financial business, chaired by PBOC Vice Governor Pan Gongsheng. Seven major rectifications were proposed during the meeting, insisting that all financial activities be included in financial supervision.
The actual controllers or representatives of 13 network platform enterprises, including Tencent, Du Xiaoman Finance, Jingdong Finance, Byte Jump, Meituan Finance, Drip Finance, Lufax, Tianxing Digital, 360 Digital, Sina Finance, Suning Finance, Gome Finance and Ctrip Finance, attended the interview.
China’s financial authorities pointed out that in recent years, there are serious irregularities in the network platforms generally engaged in financial business without a license or beyond the scope of the license, unsound corporate governance mechanisms, regulatory arbitrage, unfair competition, and damage to the legitimate rights and interests of consumers. The interview of the network platform enterprises engaged in financial business, with comprehensive operating characteristics and business scale, has an important influence in the industry, the exposed problems are also more typical, must take the lead in serious correction.
Financial management departments for the current network platform enterprises engaged in financial business in the prevailing outstanding problems put forward rectification requirements; first, adhere to the financial activities all into the financial supervision, financial business must be licensed to operate; second, payment back to its roots, disconnect payment instruments and other financial products improper connection, strict control of non-bank payment accounts to the public sector expansion, improve the transparency of transactions, correct unfair competition;. Third, break the monopoly of news, strictly through licensed credit agencies to carry out personal credit business in compliance with the law.
Fourth, strengthen the standardized management of shareholders’ qualification, shareholding structure, capital, risk segregation, related transactions and other key aspects, and eligible enterprises should apply for the establishment of financial holding companies in accordance with the law; fifth, strictly implement prudential supervision requirements, improve corporate governance, implement the “two participations and one control” requirements for investment in banks and insurance institutions, and carry out compliance and prudence Network deposit and loan and network insurance business, to prevent the risk of network mutual business; sixth is to regulate the issuance of enterprises trading asset securitization products, as well as the act of going public outside the country. Prohibit cross-employment of executives and practitioners of securities and fund institutions to protect the independence of institutional operations; seventh, strengthen the financial consumer protection mechanism, regulate the use of personal information collection, marketing and promotional practices and format contracts, strengthen supervision and regulation of financial business cooperation with co-operative manufacturers.
The financial management requires that network platform companies fully understand the necessity and seriousness of the self-examination and rectification work.