context: The outcomes of the regulatory interview of Ant Group might be one of the most important turning points in the fintech sector. With anti-monopoly featuring prominently in the agenda-setting CEWC for 2021, every line of the inspection outcome could turn into policy tomorrow.

With the conclusion of a joint interview conducted by the state’s main financial regulators with Ant Group on 24 December, Pan Gongsheng 潘功胜 People’s Bank of China deputy governor headed a joint press conference, noting the internet giant must

  • consciously abide by laws and regulations
  • integrate corporate and national development
  • earnestly assume corporate social responsibility
  • resolve key problems in
    • internal governance
    • ‘lack of legal awareness’
    • ‘contempt for regulatory compliance requirements’
    • engaging in illegal regulatory arbitrage
    • using its dominant status to drive off market peers
    • harming the rights and interests of consumers

In action, it entails ‘rectification’ which includes demands to

  • return to Ant’s main payment business
    • improve transaction transparency
    • refrain from unfair competition
  • compliantly operate personal credit services
    • protect personal data privacy
  • establish a financial holding company
    • strictly implement regulatory requirements
    • ensure sufficient capital compliance
  • improve corporate governance, strictly rectifying financial activities such as
    • illegal credit issuance
    • insurance and wealth management business
  • ensure compliance of securities fund business with laws and regulations
    • strengthen the governance of securities institutions (subsidiaries)
    • carry out asset securitisation business in strict compliance

Moving on, the policy orientation of fintech oversight stresses that all financial activities must be regulated and licenced, Pan noted.

In the meantime, an unsigned editorial in the central bank’s mouthpiece Economic Daily praised the joint investigation as a ‘timely effort’ to regulate the fast-developing fintech industry. Similarly, People’s Daily took it further, claiming that antitrust and fighting unfair competition are ‘inherent requirements’ for improving the socialist market economy system and promoting high-quality development and that regulations offer a solid foundation for future growth.