Online Lenders Will Tumble as Beijing Introduces Strict New Legislation
The introduction of strict new legislation governing online lending platforms in Beijing is expected to cull a large number of Internet financiers.
A circular released by the “Beijing Internet Finance Risk Special Handling Work Team Office” (北京市互联网金融风险专项整治工作领导小组) requires that Internet lending platforms registered in the Chinese capital contact and report to their local finance department within 30 days, or be subject to handling in accordance with procedures for newly established entities.
Just prior to this the municipal government issued the “Amendment Requirements” for the the “Online Lending Information Intermediary Organization Operations Management Temporary Measures” (网络借贷信息中介机构业务活动管理暂行办法) to multiple Internet lenders located in Beijing.
According to analysts the “Amendment Requirements” are far more strict and detailed in supervisory and regulatory terms than similar measures issued by other province-level government, such as those in Guangdong and Xiamen.
According to one analyst who spoke to China Securities News, the strict requirements imposed by the amendment measures with respect to risk provisions, exchanges and capital leasing co-operation could cull a large number of Internet lending platforms.