The first set of regulations for the online finance industry not only sets out the legal guidelines for the industry, but will also have a major impact on its structure. Legal experts nevertheless believe that certain issues still require clarification.
The People’s Bank of China, the Ministry of Industry and Information Technology and eight other authorities recently issued their Guiding Opinions on Promoting the Healthy Development of Internet Finance, defining the concept of internet finance business and setting forth the regulatory responsibilities and the division of regulatory duties for such areas as internet payment, online lending and crowd funding.
John Tsang, founding partner of DLF Lawyer, told China Business Law Journal that the guiding opinions are of great significance to numerous aspects of online finance, mainly manifested in two. “Firstly, the issue of whether the relevant business is lawful, and secondly, the issue of the applicable laws and regulations”.
Previously, Tsang said, the law did not expressly set out the legality of commercial online peer-to-peer (P2P) lending institutions. Further, whether laws and regulations related to private lending or finance are applicable to P2P businesses in practice is another major outstanding question.