CHINESE authorities have published details of rules aimed at cleaning up the country’s scandal-struck online finance sector.
The documents provide guidelines on how to prevent fraud and illegal fundraising within the sector, which includes peer-to-peer lending, according to Reuters.
The goal of the documents – which were published on Thursday by government bodies and financial regulators - is to provide “market order” and protect the “vital interests” and “legitimate rights” of retail investors, a senior official told the state-run Xinhua News Agency.
China’s banking regulator issued the first set of regulations under the guidance back in August, due to an onslaught of fraud within the country’s $93bn (£76bn) peer-to-peer lending market.
Under the rules, P2P platforms must hold their clients’ money in separate accounts and use a third-party depository to hold funds. They are forbidden from engaging in asset management activities, or marketing high-risk securities.
In August, billionaire Chinese businessman Guo Guangchang called the country’s P2P market “a scam” following a number of Ponzi-style schemes that resulted in consumers losing their money.
In February, more than 20 people were arrested for their involvement in Ezubao, a P2P lender which stole more than Rmb50bn (£6.2bn) from investors, the country’s biggest case of financial fraud to date.