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China’s regulator clamps down harder on fintech, orders 13 tech giants to follow rules

Written by Song Jingli Published on     2 mins read

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The platforms took a wait-and-see attitude, rather than actively addressing their problems.

Chinese financial authorities summoned 13 fintech platforms on Thursday, urging them to correct malpractices, including operating businesses without proper licenses, unfair competition, and violation of consumer rights, according to a post on the website of the People’s Bank of China.

Tencent, ByteDance, Baidu affiliate Douxiaoman, 360 DigiTech, Tianxing, and JD Finance are among the companies that were involved, as well as the fintech units of Meituan, Didi, Suning, Gome, Sina, and Trip.com. The platforms took a wait-and-see attitude, rather than actively addressing their problems following the investigations into Ant Group, state media agency Xinhua reported on Friday.

These companies are required to apply for a license for each of their financial businesses, to cut connections between payment services and other financial products, break their information monopoly, and improve their corporate governance, which is in line with the requirements for Ant, Ke Yan, lead analyst at DTZ Research, told KrASIA.

They will also have to comply with Chinese laws and regulations when issuing asset-backed securities or shares and improve consumer protection when collecting information for marketing purposes, he said. “How these new rectification requirements will affect the big tech companies will be up to how serious their problems are.”

The Chinese government is currently investigating officials who approved Ant’s dual listing in Hong Kong and Shanghai, local officials who promoted the listing, and large state firms that would have benefited financially from the offering, Bloomberg reported this week. Before its dual listing was scuttered, Ant had secured lucky numbers for its ticker codes—688688 for Shanghai’s Star Market, and 6688 for the Hong Kong Stock Exchange. It planned to issued shares at RMB 68 and HKD 80 apiece on the bourses.

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