China plans to complete the latest regulations governing Internet finance by March in an effort to phase out problematic online finance platforms and ensure healthy development of the industry.
The regulations will target peer-to-peer online lenders, equity-based crowdfunding, online insurance, third-party payment, cross-border financial and asset-management services on the Internet as well as scrutinize Internet finance advertising.
The regulations were drawn up by the State Council, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the Ministry of Industry and Information Technology, the MIIT said yesterday.
The pending regulations marked the government's latest efforts to clean up the industry following several policies in the recent two months, industry officials said.
"The online lending industry is like shadow banking with huge risks and without regulations," said Zhang Jun, chief executive of PPDai.com, a Shanghai-based online lender.
P2P lenders encountered problems like failures and fraud. For example, P2P firm Ezubao used an online Ponzi scheme to draw about 50 billion yuan (.4 billion) from 900,000 investors.