Briefing: Large P2P lenders ordered to ready disclosures for regulators
Apr 18, 2019
What happened: Authorities are preparing to roll out a pilot program to register China’s surviving online peer-to-peer (P2P) lending platforms in a national monitoring system. Registered P2P platforms will be required to submit information to the monitoring system consisting of two databases, an information disclosure database and a real-time transaction monitoring database. Large platforms with loan balances of more than RMB 5 billion ($750 million) must register with the information disclosure database by the end of May. The remaining platforms with loan balances less than RMB 5 billion are required to complete registration by the end of June.
Why it’s important: The new monitoring system is part of the government’s response to regulate the online lending industry, which has been plagued with fraud and risky financial practices. The regulatory clampdown has led to the collapse of hundreds of online lenders. The new pilot program is expected to create further restructuring and turmoil in the industry. Regulators aim to complete the national registration system by 2020, and platforms that fail to comply so will be forced to shut down.