'Investment' Still Taboo for New Firm Names in Beijing
(Beijing) — The Beijing municipal government is sticking with its ban on new financial firms whose names and business descriptions explicitly tie them to financial services.
Speaking to Caixin, an official with the city's Administration for Industry and Commerce confirmed Friday that the regulator will continue indefinitely to refuse to register new companies with names that include key words such as "investment" and "finance," and phrases such as "asset management" and "fund management."
Also barred are all companies that say in their business registration applications that they plan to offer financial services.
The restriction was implemented in January in a bid to better control financial markets and limit new investment-related companies amid a rise in fraudulent wealth management products offered by peer-to-peer (P2P) lending platforms.
Since January, the governments of Shanghai and Shenzhen have also banned firms whose registration applications identified them as financial service providers. The bans were billed as temporary.
Existing firms in these cities that registered before the rule have not been affected.
According to Wangdaizhijia, a research firm that tracks the online-lending industry, authorities have shut down about 1,000 P2P sites since January. They were targeted for failing to repay investors. In some cases, officials said, website managers disappeared with investor funds.
Contact reporter Dong Tongjian (email@example.com); editor Eric Johnson (firstname.lastname@example.org)
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