By Yin Lei
China set out multiple measures to rein in risks at the domestic peer-to-peer (P2P) online lending platforms, as reported by the Xinhua News Agency on Sunday.
These measures were put forward at a seminar addressing risk management and healthy operation of China’s online lending platforms, which was jointly held by two working groups responsible for internet financial risks and online lending risks across the country.
These measures require that lenders to P2P platforms should have a means to make complaints and safeguard their legitimate rights.
To this end, these platforms should build communication mechanisms and ensure transparency in their business operations. Local governments, on the other hand, are required to set up a channel to explain related policies to investors and respond to their requests.
The P2P platforms should undergo compliance inspections on their operations, and defuse liquidity risks via market-oriented ways such as asset realization, mergers and acquisitions, and collaboration with traditional financial entities.
For the sake of the legitimate rights of investors, a registration mechanism and an exit procedure should be put into place to regulate their asset disposals and debt settlements.
In case of a bankruptcy, a P2P platform should make a liquidation and redemption plan, and carry it out under supervision. Those acting in bad faith in this regard will face severe legal consequences and be recorded in the national social credit system.
Investor education receives high priority too. Financial knowledge popularization will see stronger promotion to help investors avoid risks and act discreetly.
These measures also ban the establishment of any new P2P lending platforms across China in the future.
