Chinese language officers have known as in 13 tech corporations to ask them to “rectify outstanding issues” on their platforms, in an indication that the regulatory stress on the fintech sector extends past Jack Ma’s Ant Group.
Tencent, ByteDance and the fintech associates of Baidu, JD.com, Meituan and Didi had been among the many 13 summoned to a gathering with officers from the Folks’s Financial institution of China and different Chinese language banking, securities and overseas trade regulators, in line with the state information company Xinhua.
Ant Group, which was requested earlier this month by the identical group of regulators to restructure itself, was not known as in once more.
Whereas praising the “general optimistic” growth of the fintech sector lately, the regulators complained of anti-competitive practices and hurt executed to shoppers by the sector.
The regulators demanded that the platforms introduce comparable modifications to these imposed on Ant, in keeping with the latest tips issued to the fintech sector.
The brand new guidelines imply that the platforms should improve their capital to cowl 30 per cent of the loans they provide collectively with banks.
Analysts have warned that the principles will elevate financing prices for bigger fintech corporations and trigger the general sector to shrink considerably, however that a number of the smaller gamers could get pleasure from extra space to develop.
The “improper hyperlinks” between cost providers and different monetary providers should be damaged, the regulators added — that means that, for instance, cost platforms can’t be used to overly promote loans, chopping off an vital promoting channel for credit score merchandise.
Transparency over transactions should even be elevated, they added. In distinction to the normal state-owned banking sector, cell cost platforms equivalent to Tencent’s WeChat Pay, Ant’s largest competitor, have shared a lot much less transaction knowledge with the federal government.
Firms should additionally apply for private credit score reporting licences to “break knowledge monopolies”. Presently, solely two government-led companies maintain such licences, and it’s unclear what the federal government will demand from non-public corporations with a purpose to situation licences.
The regulators additionally demanded that the platforms higher handle monetary threat when making loans and investments.