China to tighten scrutiny on tech firm's financial sector investment
Updated 21:02, 19-Jan-2022
By Huo Li
China vows to tighten regulation on fintech. /CFP

China vows to tighten regulation on fintech. /CFP

China will strictly regulate platform companies' investment in financial institutions and local financial organizations, according to a notice released on Tuesday.

The National Development and Reform Commission, along with eight other departments, released a document on promoting the healthy and sustainable development of the platform economy dated December 24, 2021.

The notice stressed that all financial business must be licensed to operate.

It reiterated that China will strengthen the supervision of the payment sector and cut the improper connection between payment instruments and other financial products.

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It added that regulators will scrutinize the "pick one out of two" conduct in the payment process according to law. They will also strengthen supervision over acts that abuse the market dominance in the payment sector.

The document also emphasized the proper usage of data and the necessity of holding proper licenses to operate.

Chinese regulators unveiled antitrust guidelines for the platform economy in February 2021 to tighten oversight of the sector. The country has also become more cautious with its fintech sector regarding risk prevention. In the notice, regulators urged platform companies, along with the financial institutions they have a stake in, to strictly follow the requirements on capital and leverage.

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