China Extends the Regulatory Crackdown to the Fintech Giants

The financial watchdogs in China are rolling out new legislative measures to restrict the finance operations of the country’s biggest Fintech giants. 

Among the 13 tech businesses, Tencent, ByteDance, JD.com, Meituan and Didi are also being summoned to meet with China’s Central bank along with many of the regulatory agencies in the country. The new regulatory measures require strict compliance with global listings, transparency on data gathering, and limiting information monopolies. 

These restrictions against the big Fintech businesses are the same as the ones imposed on Jack Ma’s Ant Group previously this year after its public offering was stopped by the regulators in the country. 

“Nobody can escape the tough regulatory crackdown on FinTech,” said Zhang Xiaoxi, a Beijing-based analyst at Gavekal Dragonomics, per Bloomberg. “While the requirements are broadly in line with those imposed on Ant, those who are considering listing need to wait till they rectify all the problems.”

The new compliances highlight that the financial services sector of Big Tech firms must be reformed as a part of a grand scheme for stricter monitoring. This is according to a joint statement by the banking and insurance regulators, securities regulator, central bank, and forex regulator. Additionally, improper ties must be cut between the financial products and the existing payment service of a company. 

Earlier this month, the Fintech firms in China were given a deadline of one month to publicly pledge to uphold the regulations. The financial regulators of China also developed new IPO restrictions. This promoted around 84 companies to withdraw their applications. 

A company under the close watchful eye of the Chinese regulators, Meituan, said that it is willing to cooperate with all the measures. The company is an eCommerce platform that delivers means, makes hotel reservations, schedules flights, reserves taxis and makes restaurant bookings. 

The Giant group Alibaba has to face a huge fine of up to $2.8 billion related to the violations of Chinese antitrust. The fine was enforced by the State Administration for Market Regulation (SAMR) earlier this month.