The general direction of P2P regulation in 2019: Most institutions can withdraw from the regulatory process and do their best.

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 The general direction of P2P regulation in 2019: Most institutions can withdraw from the regulatory process and do their best.


Reporter Xie Shuiwang, Intern Zheng Jie, Shanghai

A thousand calls begin to come out.

For a month or so, a local P2P regulatory document was issued at the end of 2018. It did not appear in the industry until January 21, 2019.

After many checks, 21st Century economic reporters learned that by the end of 2018, the regulatory authorities had formulated a work programme for classified disposal and risk prevention of P2P institutions. The overall work requirements are: to adhere to the main direction of work is to withdraw from the organization, in addition to some strictly compliant operating agencies, the rest of the institutions can retreat, should close the door, and increase the intensity and speed of the rectification work.

At the same time, the document requires that risk management should be propelled in a safe and orderly manner, classified measures should be taken, key points should be highlighted and bomb disassembly should be precise, so as to ensure the orderly and controllable process of clearing industry risks and to keep the bottom line of avoiding systemic risks and mass incidents.

Regulatory authorities require local authorities to formulate guidelines for classified disposal. For the normal operation institutions, we should actively guide them to transform the network lending and lending diversion institutions.

Undoubtedly, 2018 is difficult for the P2P industry to move forward in confusion. For the outlook for 2019, many insiders expressed a pessimistic attitude, no confidence, not good. Even some insiders believe that P2P may no longer exist.

Xue Hongyan, Director of Internet Finance Center of Suning Institute of Finance, told 21st Century Economic Reporter: From the current regulatory thinking, regulators are comprehensively clearing up potential risks through stock clearance, transformation guidance, cutting off risk contagion chain, and so on, so as to clear up obstacles for the advancement of filing. From the perspective of platform impact, it is good for the large platform with strict compliance. In addition, all kinds of platforms will quicken their exit from the market. An objective result is that the stock size and market impact of P2P online lending business will continue to shrink.

Zeng E, a lawyer at Shanghai Jintiancheng Law Firm, believes that the core work of the regulatory authorities today will be to guide the withdrawal of the online lending platform as orderly as possible. This may have some changes with the previous guiding ideology of the filing work, which emphasizes the survival of the institutions after the filing; and frequent verification, combined with the exit guiding ideology, that is, the supervision of the beginning of the clear meaning: the majority of online lending institutions need to withdraw orderly, with only a small number of normal compliance institutions.

Require local classified disposal

Regulatory authorities require that, on the basis of finding out the base number of P2P online lending institutions under their jurisdiction, all localities classify the risks according to their status, draw up risk maps and clear task lists.

It can be divided into two categories, one is the institutions that have been out of danger, the other is the institutions that have not been out of danger. The insured institutions include the registered institutions and non-registered institutions; the non-insured institutions include zombie institutions, smaller institutions and larger institutions (including high-risk institutions and normal institutions). Based on this, the guideline for classified disposal is formulated.

Specifically, for registered institutions, improve the level of recovery of stolen goods and damage, and stabilize investor sentiment; for institutions that have risked but not registered, handle risks smoothly and orderly, without mass incidents; for zombie institutions, prompt the withdrawal of the main body of institutions as soon as possible; for small-scale institutions, resolutely promote market clearance and guide risk-free withdrawal; for high-risk institutions in operation, We will steadily promote market liquidation and strive to achieve a sound exit.

For example, if a small-scale organization in operation is unwilling to withdraw voluntarily, it should strictly check its violations through compliance checks; if serious violations are found, it should immediately be transferred to the working mechanism or public security organ for dealing with illegal fund-raising, and its actual controllers and senior managers should be blacklisted in the financial field.

The head of a small-scale P2P platform in Shanghai expressed his gratitude, telling 21st century economic reporters: Our judgment is basically correct. Due to the high cost of compliance and regulatory uncertainties, as early as the first half of 2018, it planned to withdraw and not add new business.

As mentioned in the Guidelines for the Management and Control of High Risk Institutions in Operation, we should strictly guard against the spread of risks to licensed financial institutions and strictly implement the four inaccuracies requirement, that is, financial institutions are not allowed to finance through online lending institutions, to provide guarantees and credit enhancement for online lending institutions, to accept investment from online lending institutions, and not to sell products of online lending institutions.

Yin Zhentao, deputy director of the Law and Finance Research Department of the Institute of Finance, Academy of Social Sciences, believes that for high-risk institutions, financial institutions are not allowed to provide guarantees and credit enhancement for online lending platforms before withdrawal, which deserves attention.

Yin Zhentao analysis, although the provision only for high-risk operating agencies, but the future mode of third-party credit enhancement should also be affected. Among them, third-party guarantees (partial financial institutions) have little impact, and are still the mainstream mode of P2P network credit enhancement in the next step. However, the mode of cooperation between online lending and insurance institutions may not be able to continue, which is consistent with the direction of strengthening the supervision of insurance institutions and Internet financial cooperation by the Banking Insurance Regulatory Commission.

Transforming Network Credit and Loan Diversion

For normal operating institutions, the regulatory authorities require resolutely clean up illegal and illegal business, leaving no hidden risks; and actively guide some institutions to transform into network small loan companies, lending institutions or guide licensed asset management institutions.

In this regard, Yin Zhentao said: Conditional compliance agencies are allowed to transform into network lending and lending diversion institutions. Internet small loans are not information intermediaries but credit intermediaries. This is the first time that the government has opened the mouth of credit intermediaries for the transformation of P2P online loans, which is worth looking forward to. Those large-scale compliance platforms, especially those with strong shareholders and financial strength, can apply for licences of financial institutions with credit intermediary attributes under the circumstances of meeting the qualifications of online small loan applications, and of course, they will also exhibit in accordance with stricter regulatory standards than P2P.

There are also people in the industry who are pessimistic about the future development of P2P.

Personally, I dont think P2P will develop any more and this industry will no longer exist. The head of a financial office in central China told 21st century economic reporters that the document did not mention the P2P filing.

He also interpreted: In finding a way back for some normal operating online lending institutions, it is very difficult to apply for a small online loan license. Next, perhaps the lending institutions will start filing.

The industry may be slowly disappearing. P2P is a kind of bank. It either becomes a bank or can only disappear. An industry veteran who did not want to be named said.

However, Yin Zhentao does not agree with this. He said: There should still be a record, but only a limited number, to encourage the transformation of normal operating institutions, but did not say that it must be transformed.

Source: Liable Editor of 21st Century Economic Report: Yao Liwei_NT6056