Emerging tech firms face tighter scrutiny

PBOC officials moot stricter measures in financial sector to protect investors. Regulators are expected to adopt a tough stance on emerging technology in the financial sector and extend supervision of technology giants in an effort to curb systemic risks, central bank officials said on Tuesday.

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Third China Internet Finance Forum in Beijing

Over-innovated financial products with lagging regulation may lead to financial instability and potential losses for investors, said the People’s Bank of China, the central bank. China will tighten regulations on all types of institutions doing financial businesses so as to protect investors who are unable to recognize potential risks, PBOC Vice-Governor Pan Gongsheng said in a speech that was read out at the Third China Internet Finance Forum in Beijing.

“Financial activities for the public, whether in the name of technology or not, should be strictly regulated, and we should safeguard residents’ money,” he said in his speech.

Proper use of financial technology can help reduce financing difficulties for small and micro enterprises, but activities, which lead to funds circulating within the financial system to boost speculative investment should be controlled, said Pan.

The annual Central Economic Work Conference, which was held last week, highlighted prevention and control of financial risks as one of the “three tough battles” and a key task that needs to be carried out next year.

The PBOC established a special work group in 2016 to tackle risks rising in internet financing businesses. In 2017, the government banned so-called “initial coin offerings” or ICOs, a way for startups to raise funds by selling off newly-created digital currencies. All trading platforms for such virtual assets have been closed in the country.

chinadaily.com.cn

Emerging tech firms face tighter scrutiny
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