China to regulate online equity financing platforms

Stockholm, Aug. 16 (Greenpost) — China’s securities regulator will soon begin inspecting online equity financing platforms to address risks brought by illegal activities and help the platforms better serve the real economy, according to Xinhua.

The China Securities Regulatory Commission (CSRC) will oversee several kinds of online platform, including equity-based crowdfunding, which allows investors to receive a stake in a company funded by pooling money from many people via the Internet, said Deng Ge, spokesman for the CSRC, at a press conference Friday.

The inspection aims to discover and correct illegal activities, minimize risks and lead platforms to perform better in serving the real economy, Deng said.

The inspection will focus on several aspects, including whether the online fund raisers have promoted themselves publicly, whether the accumulated number of equity holders has exceeded 200, and whether the raisers have collected private equity funds in the name of equity-based crowdfunding, Deng said.

Some institutions are operating in the name of “equity-based crowdfunding,” which are actually non-public equity financing or private equity funds raising, hence do not fall within the scope of equity-based crowdfunding activities allowed by the guidelines on promoting the healthy development of Internet finance unveiled easier in July, Deng said.

The CSRC has recently told governments at the provincial level to forbid institutions and individuals from illegally issue stocks under the guise of equity-based crowdfunding.

To support innovation and the healthy development of Internet finance, new policies were rolled out in July in guidelines by ten central government departments and industry regulators, including the People’s Bank of China (PBOC).

More regulation is needed to deal with Internet finance crime, and self-discipline is also required if the industry is to build a sound and honest environment for finance players.

“Internet finance could help small and micro enterprises with investment and fund raising, and also upgrade the quality and efficiency of financial services,” an official with the PBOC said during a press conference. Enditem

Source Xinhua

Leave a Reply