China cracks down on internet finance firms, suspends new registrations

China suspended new registrations of finance companies nationwide as authorities started a crackdown on Internet finance, business magazine Caixin reported, citing unidentified people familiar with the matter.

Applicants with finance-related names or businesses can no longer simply register with local offices of the State Administration for Industry & Commerce, Caixin reported Thursday. Firms will instead first need approvals from financial regulators, it said.

The change is part of a campaign to clean up online finance that began April 14 and will end by January next year, the magazine said. China Business News reported on Thursday that the government’s efforts will last for a year.

The central bank is leading the campaign, involving multiple government agencies, Caixin reported previously.

Policy makers are cracking down on Internet-based unconventional financing that threatens to undermine financial stability and stoke social unrest after the failure of thousands of online peer-to-peer lenders, some suspected of fraud. Online financing added fuel to last year’s stock bubble.

‘Necessary’ Step

While the government calls it a “special Internet finance crackdown,” the campaign also covers some offline financial businesses such as wealth management, according to China Business News. The initiative will focus on areas such as third-party payments, peer-to-peer lending, crowdfunding and online insurance, according to the news service.

“This is a necessary move,” said Zheng Chunming, a Shanghai-based analyst at Capital Securities Corp. “The government is cracking down on Internet finance as the business is developing too rapidly and more problematic platforms have emerged.”

The tightening of registrations is intended to cover businesses including exchanges, fund and investment managers, private equity, online finance, peer-to-peer lending, crowdfunding, Internet insurance and payments, Caixin said. Cities including Shanghai, Shenzhen and Beijing had already halted registrations, it said.

Also read:

China: Internet insurer Zhong An plans $2b mainland IPO in 2016

China’s internet search co Baidu gets offer for its 80.5 pct stake in Qiyi

Following Alibaba, Tencent’s footsteps China’s Baidu, CITIC in JV for Internet bank

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.