Avocat la Cour dAppel
de Paris
Barrister & Solicitor (Nova Scotai
Canada)
Special Counsel to Dongfang Kunlun
Law Firm Beijing
Guiding Opinion with respect to the Promotion of
Healthy Development of Internet Finance
For the purpose of encouraging
financial innovation, promoting the healthy development of internet finance,
clarifying supervisory responsibilities, defining standards for market order,
with the approvals of the Central Committee of the Communist Party and of the
State Council, the Peoples Bank of China, the Ministry of Industry and
Information Technology, the Ministry of Public Security, the Ministry
of Finance, the State
Administration of Industry and Commerce, the Legislative
Affairs Office of the State
Council, the China Banking Regulatory Commission, the China Securities
Regulatory Commission, the Chinese Insurance Regulatory Commission, the State
Internet Information Office have in recent days together promulgated
the Guiding Opinion with respect to the Promotion of the Healthy
Development of Internet Finance (Promulgated (2015) N 221, referred to below
as the Guiding Opinion).
In accordance with the overall
requirements of encouraging innovation, guarding against risks, maximizing
benefits and minimizing costs, and healthy development, the Guiding Opinion
proposes a series of policy measures to encourage innovation, to support the
steady development of internet finance, to actively support internet finance
platforms and innovation in products and services, to encourage mutual
cooperation among Professionals, to broaden the finance and investment channels
for professionals, to support streamlining and implementation, to improve
fiscal policies, to advance construction of a reliable infrastructure and the
establishment of a system of related services.
In accordance with the principle
of supervision according to law, that is proportionate, differentiated and
coordinated, the Guiding Opinion establishes how are attributed the
supervisory responsibilities with respect to internet payments, network
borrowing of money, raising equity by public offerings, marketing of investment
funds, internet insurance, internet trust and internet consumer finance and
other important internet financial operations, and it carries out supervisory
responsibilities, clarifies the boundaries between businesses.
The Guiding Opinion supports
market-led development of the internet, it is committed to good service of the
real economy, it implements macro regulations and controls and safeguards the
objective of overall stability of internet finance, it diligently protects the
legal rights and interests of consumers, it protects fair competition on
orderly markets and, in connection with its management of internet activities, it
proposes specific requirements for systems of managing third-party custodial services, the disclosure of
information, systems for anticipating risks and for identifying
qualified investors, for protecting the rights and interests of consumers, the
security of the network and of information, to combat money laundering and
violations of financial interdictions, to strengthen the internet finance
businesss self-discipline, regulation and control, the monitoring of data base
statistics, and as regards other requirements.
Next, each concerned department shall in accordance
with the attribution of responsibilities in the Guiding Opinion earnestly
implement measures to carry out each of its requirements; internet finance
business professionals shall in accordance with the relevant rules in the
Guiding Opinion, as well as according to the laws and regulations develop the
carrying on of all types of activities.
*
* *
Peoples Bank of China
Ministry of Industry and Information Technology
Ministry of Public Security
Ministry
of Finance
State Administration of Industry and Commerce
Legislative
Affairs Office of the State
Council
China Banking Regulatory Commission
China Securities Regulatory Commission
Chinese Insurance Regulatory Commission
State Internet Information Office
Guiding Opinion with respect to the Promotion of
Healthy Development of Internet Finance
In recent years, internet technology and information
communication technology have continuously experienced breakthroughs, advancing
the rapid integration of the internet and finance, promoting financial
innovation, increasing the efficiency of the allocation of financial resources,
but there are also exist certain problems and latent dangers. For the full
implementation of the spirit of the Second, Third and Fourth Meetings of the
18th Central Committee of the 18th Plenary Session,
in accordance with the Partys Central Committee and the policy framework of
the State Council, while abiding by the overall requirements of starting from
the encouraging innovation, guarding against risks, maximizing benefits and
minimizing costs, and healthy development, taking account of the overall
situation of healthy development of the finance sector, and taking steps to
advance financial reform and innovation as well as opening up to abroad, to
promote the healthy development of internet finance, with the approvals of the
Central Committee of the Party, and of the State Council, the following opinion
is herby proclaimed.
1. - The encouragement of innovation, and support for
the steady development of internet finance technology
Internet finance corresponds to
a merger of traditional finance and internet
enterprises (referred to below as Professionnals)
that use internet information technology and information communication
technology to implement funds circulation, payments, investment and large-scale
information intermediation services in the financial sector. The thorough
integration of the internet and finance is an irresistible general trend, and
it will have an especially deep influence on multiple aspects of financial
products, business, organizations, services etc.. For
promoting the development of small and micro enterprises, and broadening
employment, internet finance will bring into play positive uses that would be
initially difficult for financial institutions to provide, opening wide the
door to masses of start-ups, and countless creators. The promotion of the
development of internet finance is advantageous for raising the quality and the
efficiency of financial services, for deepening financial reform, for promoting
the development of financial innovation, for broadening the internal and
external opening up of the financial sector, for the constitution of
multi-layered financial systems. As a new phenomenon, internet
finance needs to be driven by the market and supported by innovation, and it
also requires the support of policies and the promotion of its development.
(1). – Support for internet
finance platforms, innovation of products and services, stimulation of market
activities
Banking,
securities, insurance, funds, trust and consumer finance and other financial
institutions are encouraged to rely on internet technology, to evolve and
upgrade traditional financial business and services and to actively open up
internet technology based new products and services. Financial institutions
that meet the conditions should be encouraged to establish new internet
platforms and to develop network banking, network securities, network
insurance, network funds and consumer network financial services, etc.. Internet enterprises are encouraged to establish in
accordance with the laws and regulations internet payment organizations,
network borrowing platforms, network platforms for raising equity capital from
public offerings, network platforms for consumer financial products,
multi-layered financial services systems adapted to the real economy, and
better satisfy the investment and finance requirements of medium, small and
micro enterprises and individuals, and broaden the extent and depth of general
financial preferences. Electronic commerce enterprises are encouraged are encouraged
to launch and improve in accordance with financial laws and regulations online
financial services systems, and efficiently to develop electronic commerce
supply chain businesses. Professionals are encouraged to develop new
products, services, technology and innovative management and to raise their
core competitiveness.
(2) The encouragement of cooperation among
professionals, the implementation of advantageous complimentarity.
All
financial institutions are encouraged to develop cooperation with internet enterprises to establish as environment favorable
for internet finance and chains of enterprises. Banks and financial
institutions are encouraged to develop business innovation, using third-party
organizations and network platforms to offer custodial management, payments
settlement and related services. Small and micro financial services enterprises
are encouraged to develop cooperation with internet
companies and to implement new business models. Securities, funds, trust,
consumer finance and futures organizations are encouraged to develop
cooperation with internet enterprises to broaden the channels for promoting
financial products, and to innovate models of financial management. Insurance
companies are encouraged to develop cooperation with internet
enterprises, and to raise the capacity of internet finance enterprises to
withstand risks.
(3)
Broadening of the channels for finance and investment professionals,
improvement of the finance and investment environment
Investment associations are encouraged
to initiate and to establish internet financial
products and investment funds, professionals are encouraged to cooperate in
depth with venture capital organizations and property investment funds.
Qualified high-level Professionals are encouraged to carry on finance and
investment on the main boards and growth enterprise boards of stock exchanges.
Banks and financial institutions shall, in accordance with all financial
policies for the development of small and micro enterprises, support Professionals
during the first phase of innovation. Taking account of the specificities of internet, new financial products and services will be
created.
(4) Encouragement of streamlining, supply of
top-quality services
Each financial regulatory authority shall encourage
financial institutions to develop internet finance. In
accordance with the laws and regulations, they shall implement high efficiency
management of the development of financial activities by qualified internet Professionals. The administrative authorities with
respect to commercial activities shall support internet
enterprises in carrying out registrations. The State Internet Information
Office and the China Internet Network Information Center shall actively support
the internet finance business and the State Internet
Information Office shall carry out supervision of electronic information
activities involving finance. The China
Internet Network Information Center shall be responsible for
supervising financial information, internet
information content etc. services. They shall develop research about laws to
adopt with respect to the internet finance
environment, they shall in a timely manner bring out appropriate management
provisions, and they shall erect an environment of good systems that are favorable
to the development of internet finance. They shall increase the intensity of
protection afforded to the patents, trademarks and other intellectual property
of Professionals. Provincial-level peoples governuments
are encouraged to increase policy support for internet
finance. The establishment of specialized internet
finance research organizations shall be encouraged as shall be the construction
of platforms for exchanges on the internet of financial information and the
development of research about internet finance.
(5) Implementation and improvement of the relevant
financial and tax policies
In accordance with the principle of equity in the
collection of taxes, with respect to relatively small enterprises, and
Professionals in the start-up phase, which meet the conditions for tax
collection among medium and small enterprises and especially micro enterprises
in Chinas currently applicable tax collection rules shall, in accordance with
the rules, may take advantage of policies of preferential taxation. The reform
of taxation on financial income should be conjugated with the reform of the
value added tax and there shall be overall improvement of the policies
regarding collection of income from internet finance as well as the policies
concerning the deductibility of research and development expenses for new
technology and new products before taxation.
(6) Promotion of construction of a reliable
infrastructure, the cultivation of complete ranges of internet
finance services
Support will be provided to construction of basic
infrastructure for the protection of large data storage facilities, network and
information. Professionals shall be encouraged in accordance with the law to
establish reliable platforms of the sharing of information. Support will be
given to qualified concerned Professionals to participate in establishing basic
data bases for credit-worthiness information. Approval
shall be given to qualified professionals who in accordance with the law apply
for permission to carry on the business of collection of information on
creditworthiness. Support shall be given to qualified rating intermediary
organizations that develop internet credit rating
enterprises, or that increase the transparency of market information. The
accounting, auditing, legal consulting professions and other information
intermediary organizations are encouraged to develop professional services
relevant for internet enterprises.
2. - Differentiated guidance, clarification of
supervisory responsibilities over internet finance
Internet finance continues by virtue of its essence to
belong to finance, it has not changed its characteristics, the latency of
financial risks, nor their contagiousness, nor their breadth
nor suddenness. The reinforcement of internet
finance supervision is an inherent need for the promotion of the healthy
development of internet finance. At the same time, internet
as a new phenomenon and a new type of operation, internet finance requires the
adoption of appropriately loose supervisory policies so that internet finance
innovation might have leeway and space. With mutual reinforcement from the
support for innovation and the reinforcement of supervision, the healthy
development of internet finance will be promoted and
the services for the real economy will be improved. The supervision of internet
finance should abide by the principles of supervision according to law, that
is proportionate, differentiated and coordinated and rational science to
define the business boundaries of each type of operation and conditions for
attribution, the responsibilities for supervising implementation, to clarify
risk thresholds, to protect lawful activities, and resolutely to combat behaviour that violates laws or regulations.
(7) Support for the internet
Support for the internet
means the use of computers, mobile devices and other equipment and relying on
the internet to initiate payment orders, and currency financial transfers.
Internet payments should sustain from beginning to end the aims of
developing electronic commerce services and of allowing associations to make
small payments, quickly, facilitating the peoples access to micro payment
services. Banking organizations and third-party payment organizations shall
carry out internet payments, while respecting the
currently applicable the laws and regulations as well as the rules with respect
to supervision. Third-party payment organizations and other organizations shall
develop cooperation, and they should clearly define the relationships of each
sides rights and duties, and establish efficient mechanisms for isolating
risks and for ensuring protection of customers rights
and interests. They shall fully disclose t their customers information about
heir services, clearly point business risks and may not exaggerate the
qualities and functions of their intermediary services with respect to payment.
Internet payment enterprises are subject to supervision by the Peoples Bank of
China.
(8) Network borrowing
Network borrowing includes the network borrowing of
individual enterprises (and P2P network borrowing) and network micro debts.
Individual enterprise network borrowing refers to direct borrowing of funds by
individual enterprises and to borrowing of funds among themselves using internet platforms for implementation. The direct borrowing behaviour in network borrowing by individual enterprises
lies within the scope of borrowing among the people, it is subject to the law
of contract, to the general principles of civil law, and to other laws and
regulations as well as to the relevant Interpretations issued by the Supreme
Peoples Court with respect to civil law. Network borrowing of funds by
individual enterprises requires support for platform functions, so that on the
investor side as well as on the finance and investment side will mutually
provide information，go-between, creditworthiness ratings and other intermediary
services. Network borrowing of funds organizations shall make clear their role
of information intermediary, and most importantly they shall provide
information services to both parties to the loan. They shall not offer creditworthiness
upgrading services, and they shall not collect funds outside the law. Small
network loans refer to small loan companies under the control of internet enterprises that use the internet to offer to
customers loans of small amounts. Network loans of small amounts shall aide by
the currently applicable supervisory rules with respect to small loan
companies, and they shall bring into play the advantages and they shall
diligently minimize the customers financial costs. The network borrowing
business shall be subject regulation of the China Banking Regulator
(9) Public offers of equity capital
Public offers of equity capital refer principally use
of the internet method to carry on activities of
raising small amounts of equity capital from the public. Public offers of
equity capital must go through platforms of public equity offer organizations
(internet sites or similar electronic intermediaries). Intermediaries in
public equity offerings may, subject to compliance with laws and regulations,
realize innovation exploration with respect to all kinds of enterprises, use
the raising of equity capital from the public as an organic element of a
multi-layered market, to improve services to innovative start-ups. The
raising of equity capital from the public for small and micro enterprises,
subject to the small equity public offerings intermediary organizations
faithful disclosure to investors of key information with respect to its
business model, its business management, its financial situation, uses for its
equity, and must not give incorrect guidance or cheat investors. Investors in
public raisings of capital must fully understand the risks of public raisings
of equity capital and must possess the ability to assume the entailed risks.
The business of raising equity from the public is subject to supervision by the
China Securities regulatory Commission.
(10) Marketing of internet
funds
Funds marketing organizations and other organizations
using the internet shall cooperate in the marketing of funds as well as of
other financial products, they shall diligently fulfill their risk disclosure
obligations, they shall not use the method of guaranteed return to attract
customers; fund managers should adopt effective measures to safeguard against
term mismatches and liquidity risks in their allocations of funds; funds
marketing organizations and those that cooperate with such organizations
engaging in other activities to provide investors with returns, shall toward
the composition of returns, as a pre-condition, conditions of use, etc.
implement overall, real, correct explanations and examples and they must not
mingle returns from funds products. Third-party payment organizations in the
process of opening up payment services in connection with internet promotion of
funds must abide by the relevant supervisory requirements of the Peoples Bank
of China and of the Securities Supervision Commission with respect to funds
settlements between customers and funds marketers. Customers of third-party
payment organizations making pre-payments may only use payment organizations
that have organized customer authorizations and they must not use payments by
one party for another in anticipation of being repaid later or other financial
product redemptions. The business of internet
marketing of funds are subject to regulation by the Securities Supervisory Commission.
(11) Internet insurance
Insurance companies that shall internet insurance
business must abide by the principles of security, confidentiality and
stability, they must reinforce risk management, improve internal systems of control,
guarantee the security of transactions the security of information and the
security of funds. Insurance companies specialized in the internet
must maintain services the basic orientation of which is internet economic
activities, they must offer services with an insurance focus. Insurance
companies must establish management systems with respect to the subsidiaries of
companies carrying on electronic commerce and other non-insurance
subsidiaries and shall institute the necessary firewalls. Insurance companies
that use the internet to market insurance products
must not issue untrue declarations, one-sided or exaggerated publicity with
respect to their achievements, or use violated the prohibitions against
guarantees of returns or assumptions of losses or other incorrect guidance.
Internet insurance activities are subject to supervision by the Insurance
Supervisory Commission.
(12) Internet trusts and internet
consumer finance
Trust companies and consumer finance companies that
use the internet to develop business must strictly abide by the supervisory
rules and reinforce risk management, and ensure that exchanges comply with the
laws and regulations, and safeguard customers information. Trust companies
that use the internet to carry on marketing of products and to develop other
trust activities shall comply with the supervisory rules with respect to
qualified investors, and carefully examine their customers status and estimate
their ability to assume risks, and they may not market products toward customers
whose ability to assume risks is mismatched. Trust companies and consumer
finance companies shall set down improved rules for the signing of product
documentation, they shall ensure that processes of exchange comply with the
laws and regulations and security norms. Internet trust activities and internet consumer finance activities shall be subject to
supervision by the Banking Supervisory Commission.
3. - Improvement of systems, norms for internet finance market order
In developing internet
finance requires guidance by the market, must serve the real economy, implement
the overall goals of macro regulation and control and safeguarding of financial
stability, diligently ensuring the legitimate rights and interests of
consumers, to protect market order based on fair competition. Management
systems shall be specified in order to build a good environment for developing
healthy internet finance.
(13) Supervision of the internet
sector
All organizations and individuals who open web sites
to carry on internet finance activity, not only must in accordance with the
rules implement relevant procedures with respect to financial supervision, lust
also in accordance with the law carry out web site registration procedures with
the State Internet Information Office, otherwise they must not develop internet
finance activities. The Ministry of Information and Industry shall be
responsible for implementing supervision of internet finance activities that
involve electronic information activities, and the China Internet Network
Information Center shall be responsible for implementing supervision of
financial information services, internet information content etc. and the two
authorities shall in accordance with their duties set down relevant specific
supervisory principles.
(14) Systems for supervising third-party depositaries
of customers investment funds
In addition to other rules, Professionals must choose
an appropriate bank or financial institution to act as third-party investment
funds depositary organizations, to implement management and supervision with
respect to customers investment funds, to carry out supervision customers
investment funds and their own investment sub-accounts. Customers investment
funds accounts must be subjected to independent audits and the results thereof
must be disclosed to customers. The Peoples Bank of China together with the
financial supervision authorities shall in accordance with their duties
allocate the supervision measures and set down relevant principles of
supervision.
(15) Information disclosure, indications of risk and
qualified investors systems
Professionals shall make full disclosure of
information to their customers, and declare in a timely manner to investors relevant information with respect to their
economic activities and financial condition, such as to facilitate investors
full understanding of their operations, and to impel Professionals operational
stability and their control of risks. Professionals must make clear to each
participant in detail the methods of exchanges, and participants
rights and obligations, and give full indications of risks. They must establish
systems for identifying qualified internet finance
investors and shall improve the levels of investor protection. The relevant
authorities shall allocate the duties for supervision in accordance with their
responsibilities.
(16) Protection of consumer rights and interests
Research shall be carried out to
set down a plan for education of internet finance
consumer and to publish in a timely manner announcements to safeguard their
rights. The contents of internet finance product contracts shall be reinforced,
rules about liability waivers and other information disclosures relevant to
consumers rights and interests, and in accordance with supervisory management
of operators use of contractual provisions in violation of laws and
regulations to harm the legitimate rights and interests of consumers. The re
shall be instituted systems for online settlement of disputes, on the spot
acceptance of cases, acceptance by the supervisory organizations of complaints,
third-party conciliation and arbitration, litigation and diverse methods of
dispute settlement systems. Principles, standards and processes for the
protection in the context of internet finance of
individuals information shall be specified and improved. False advertising in
relation with internet consumer finance products and
processes is strictly prohibited and consumer XXXXX shall be reinforced. The
Peoples Bank of China, the China Securities Regulatory Commission, the China
Insurance Regulatory Commission and other similar executive authorities, shall
on the basis of the allocation of responsibilities and in accordance with the
law develop the scope of consumers and investors rights and interests in the
context of internet finance.
(17) Network and information security
Professionals shall diligently raise the level of
technical security, appropriately protect customers documentation and exchange
trading information, and they must not carry on trading outside the law, or
divulge customers personal information. The Peoples Bank of China, the China
Banking Regulatory Commission, the China Securities Regulatory Commission and
the China Insurance Regulatory Commission, the Ministry of Information
Industry, the Ministry of, the China Internet Public Security, the China
Internet Network Information Center shall divide responsibility
for supervising the security of the networks and information of concerned
Professionals, and shall set down relevant specific supervisory principles and
standards of technical security.
(18) Combating money
laundering and prevention of financial crimes
Professionals must adopt
effective measures to differentiate customers capacities and shall initiate
supervise and report suspicious transaction, and they shall improve the
safeguarding of customers documentation and transaction records. Professionals
have the obligation in accordance with relevant rules to establish and improve
systems of rules with respect to relevant support and investigation and for
freezing assets, for assisting the public security authorities and civil
authorities in accordance with the law and immediately to investigate and
freeze involved assets, ad to support the public security authorities and civil
authorities in obtaining evidence and in the work of implementation. The
shall resolutely combat illegal collection of funds and other internet financial crimes, they shall safeguard against financial
risks, and protect financial order. When financial institutions develop
cooperation or representation with internet enterprises, they shall on the
basis of relevant laws and regulations sign cooperation and representation
agreements containing requirements to combat money laundering and safeguarding
against financial crimes, and they shall ensure that the cooperation or
representation relationships do not serve to diminish enforcement standards for
combating money laundering and financial crimes. The Peoples Bank of China
shall take the lead responsibility for implementing supervisions of
Professionals implementation of the duty to combat against money laundering
and shall set down relevant principles of supervision. The Ministry of Public
Security shall take the lead responsibility for combating internet
financial crimes.
(19)
Reinforcement of self-regulation of the internet
finance sector
Full
play shall be given to systems of self-regulation in setting standards with
respect to Professionals market behaviour and in
protecting legitimate rights and interests and other aspects of its positive
role. The Peoples Bank of China may together with other concerned authorities
form a China Internet Finance Association. The Association shall on the basis of
the types of activities set down principles for supervising operations and
industry standards, it shall promote business exchanges between organizations
and sharing of information. The Association shall clarify the system of
self-regulation and sanctions and shall raise the enforceability of industry
principles and standards. Reinforcement shall be provided for respect for law,
for sincerity, for knowledge about self-regulation, and for the establishment
of a positive image of Professionals contribution to the development of the
economic aspects of society.
(20) Supervision and regulation with respect to
principles of statistical data
All supervisory authorities shall mutually cooperate,
join forces and give full play to the use of the system of joint conferences
for supervision and coordination. The Peoples Bank of China, the China
Securities regulatory Commission, the China Insurance Regulatory Commission
shall pay close attention to the risks arising in connection with the
development of the internet finance sector and shall with respect to
supervision policies carry out evidence-based evaluations, it shall in a
timely manner propose suggestions for regulation, and continuously synthesize
experience. The Treasury department shall be responsible implementing
supervision policies with respect to internet finance
Professionals finance. The
Peoples Bank fo China may
together with concerned authorities take responsibility for establishing and
perfecting systems of supervision over internet finance statistical bases as
well as for carrying out supervision and for implementing sharing of
statistical data and information.