First-step analysis: fintech regulation in China


Financial regulation

Regulatory bodies

Which bodies regulate the provision of fintech products and services?

There is no single regulatory body responsible for the regulation of fintech products and services. Different fintech services and products are regulated by different regulatory bodies. The main regulatory bodies include the People’s Bank of China (PBOC), China Banking and Insurance Regulatory Commission (CBIRC) and China Securities Regulatory Commission (CSRC).

Regulated activities

Which activities trigger a licensing requirement in your jurisdiction?

The following activities are regulated and require a licence:

  • carrying on securities brokerage;
  • carrying on securities investment consultancy;
  • financial advising relating to securities trading or investment;
  • securities underwriting and sponsorship;
  • carrying on proprietary account transactions;
  • carrying on securities asset management;
  • taking in deposits from the general public;
  • handling domestic and foreign settlements;
  • handling, accepting and discounting of negotiable instruments;
  • issuing financial bonds;
  • acting as an agent for the issue, honouring and underwriting of government bonds;
  • buying and selling government bonds and financial bonds;
  • offering and providing discretionary investment management services;
  • buying and selling foreign exchange, and acting as an agent for the purchase and sale of foreign exchange;
  • carrying on fund management services;
  • carrying on fund custodian services;
  • carrying on derivative products transactions;
  • lending micro loans online or offline; and
  • providing consumer finance services.

Consumer lending

Is consumer lending regulated in your jurisdiction?

Consumer lending is a regulated activity and is governed by the General Rules of Loans, the Administrative Measures for Pilot Consumer Finance Companies (the Consumer Finance Measures) and the Commercial Bank Law. The CBIRC also issued the Trial Rules for Supervision Rating for Consumer Finance Companies.

According to the General Rules of Loans, to engage in lending business, lenders must  be approved by the PBOC to hold a financial institute legal person permit or a financial institute operation permit issued by the PBOC, and they must be approved and registered by the State Administration for Market Regulation.

The Consumer Finance Measures regulates the operating activities of consumer finance companies that refer to non-bank financial institutions and do not receive public deposits but provide loans to resident individuals within China for consumption purposes (excluding house and vehicle purchases) under the principle of small sum and dispersion. The consumer finance companies must be approved by the CBIRC.

Under the Trial Rules for Supervision Rating for Consumer Finance Companies, CBIRC will provide rating results to consumer finance companies. Such companies will be subject to different regulatory measures according to their rating results.

Secondary market loan trading

Are there restrictions on trading loans in the secondary market in your jurisdiction?

Trading loans between financial institutions in the secondary market are subject to regulatory supervision by the CBIRC and the following restrictions:

  • the financial institutions must report certain information to the CBIRC;
  • the transfer of loans is subject to the consent of the borrower and the guarantor (if any);
  • all outstanding principal and interest must be transferred as a whole;
  • parties are prohibited from making any direct or indirect repurchase arrangements; and
  • if the lender is from a consortium, other members of the consortium shall have the right of first refusal for such a transfer.


Trading loans between non-financial institutions are generally not subject to mandatory regulatory restrictions.

On 7 January 2021, the CBIRC published a notice on Implementing the Pilot Program of Transferring Non-performing Loans. Selected state-controlled or joint stock banks participated in the pilot programme. Currently only individual corporate non-performing loans and batch personal non-performing loans are included in the pilot programme.

Collective investment schemes

Describe the regulatory regime for collective investment schemes and whether fintech companies providing alternative finance products or services would fall within its scope.

The establishment and operation of securities investment funds within China via public and non-public raising of funds is regulated by the Securities Investment Fund Law. The primary regulatory body for funds in China is the CSRC. Generally, the regulation on public raising funds (retail funds) is more detailed and restrictive than for private funds. Retail funds and retail fund managers must be registered with the CSRC. Fundraising, fund custodian and investment activities are strictly regulated by the CSRC. Agencies that engage in sales, sales payment, unit registration, valuation services, investment consulting, rating, information technology system services and other fund services related to publicly raised funds are subject to registration or record filing in accordance with the requirements of the CSRC. Private funds and private fund managers must register with the Asset Management Association of China, an industry self-disciplinary body under the supervision of the CSRC.

Pursuant to article 2 of Securities Investment Fund Law, the definition of collective investment schemes (securities investment funds) are funds managed by fund managers, placed in the custody of fund custodians and used in the interest of the holders of the fund units for investment in securities. Accordingly, peer-to-peer or marketplace lenders or crowdfunding platforms do not fit the definition of collective investment schemes and do not fall into the regulatory scope of the them.

Alternative investment funds

Are managers of alternative investment funds regulated?

Managers of alternative investment funds that raise capital from a number of investors and invest it in accordance with a defined investment policy for the benefit of those investors are regulated. These activities are broadly defined as asset management services, and may be conducted by securities companies, trust companies and fund management companies and their subsidiaries. Managers are subject to different regulatory regimes depending on the specific form of these alternative investment funds.

Peer-to-peer and marketplace lending

Describe any specific regulation of peer-to-peer or marketplace lending in your jurisdiction.

The Interim Measures for the Administration of Business Activities on Online Lending Information Intermediary Agencies (the Online Lending Rules), issued on 17 August 2016 by the CBIRC, specifically target the activities of peer-to-peer lending between individuals through an internet-based platform. The Online Lending Rules require that the peer-to-peer lending platforms register with the local financial regulatory offices, apply for the applicable telecommunication service operation licence and include serving as an internet lending information intermediary in its business scope, and shall only act as information intermediaries between parties. Peer-to-peer lending platforms must not conduct credit enhancement services, cash concentration or fundraising activities for themselves, or provide security or guarantee arrangements for lenders. The Online L
ending Rules also set out detailed requirements for information disclosure, protection of lenders and borrowers and risk control measures.

In the years 2017 to 2019, the Chinese government and relevant regulatory authorities issued various regulations and guidelines governing the peer-to-peer online lending industry. The main purpose was to regulate peer-to-peer industry behaviour and enhance supervision of the industry. However, peer-to-peer online lending in China is often linked with illegal fund raising, which has caused significant economic losses to investors and massive social unrest in many places. A majority of the local provinces in China took measures to effectively prohibit its operation. According to the PBOC, existing peer-to-peer online lending institutions had all suspended operations in the country by April 2020.


Describe any specific regulation of crowdfunding in your jurisdiction.

The Guideline Opinion on Promoting the Healthy Development of Internet Finance has defined equity-based crowdfunding as public equity financing in small amounts through an internet-based platform. The Opinion provides that equity crowdfunding must be…


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