Update: Top Financial Watchdogs to Lecture Ant Group on Regulation, Consumer Rights
China’s top financial regulators plan to hold talks with fintech giant Ant Group Co. Ltd. on financial regulation, fair competition and protection of consumer interests, the central bank said Thursday.
The move comes less than two months after regulators suspended Ant Group’s potentially record-breaking IPO in early November amid concerns over the company’s highly leveraged online lending business and its potential threats to financial stability.
The new meeting with regulators aims to provide guidance to Ant Group, the fintech affiliate of e-commerce giant Alibaba Group Holding Ltd., over compliance with financial supervision, according to a statement (link in Chinese) released by the People’s Bank of China (PBOC).
The PBOC, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange will hold the discussions in the coming days, the statement said. In early November, the four regulators summoned Ant Group’s actual controller Jack Ma and top executives for a meeting ahead of its planned IPO.
Ant Group said it received a notice from regulators on Thursday and it “will seriously study and strictly comply with all regulatory requirements and commit full efforts to fulfill all related work.”
The fintech giant’s financial services have grown rapidly in recent years in large part due to its ability to sidestep some of the more stringent requirements for traditional financial institutions. But the company is facing tighter supervision as potential risks from its financial services become too big to ignore.
Ant Group grew substantially on the back of payment platform Alipay, one of the two biggest digital wallet services in China, which claims to have 1.3 billion users worldwide. Over the years, Ant Group has leveraged its huge customer base to boost revenue and profits, with businesses expanding into almost every type of financial service.
Guo Shuqing, Communist Party chief of the PBOC, said earlier this month that the micropayment market is excessively dominated by a few tech companies. Regulators must “take timely and targeted measures to prevent new systemic risks” posed by tech giants’ fintech activities, he said.
The stepped-up regulatory challenges facing Ant Group are also casting a cloud over its financial peers, especially those controlled by internet titans Tencent Holdings Ltd. and e-commerce giant JD.com Inc.
In early November, regulators issued draft rules just ahead of Ant Group’s planned IPO that impose stricter restrictions on online microlending activities to curb the wild expansion of fintech firms’ online lending businesses.
In addition, China has strengthened antitrust regulation covering the tech sector. On Thursday, the State Administration for Market Regulation, China’s top market regulator, announced that it has launched an antitrust investigation into New York- and Hong Kong-listed Alibaba for suspected monopolistic conduct.
It came after the regulator issued draft rules to prevent and curb monopolistic practices on internet platforms in November. Last week, China’s top policymakers said at the annual Central Economic Work Conference that strengthening antitrust and the prevention of disorderly expansion of capital will be one of the economic tasks for next year.
Contact reporter Tang Ziyi (firstname.lastname@example.org) and editors Yang Ge (email@example.com) and Joshua Dummer (firstname.lastname@example.org)
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