by: Grow VC Group
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Rumors on possible regulations for the rapidly growing Chinese peer-to-peer lending sector have been periodically arising, drawing the attention of the entire industry. But until now, they remained unconfirmed news with no evidence of any serious intention. However at the end of 2015, the China Banking Regulatory Commission (CBRC), published a set of proposed rules asking the public to provide comments.

The P2P lending sector in China is reported to be the biggest in the world, with more than 2000 players. However, frauds and bankruptcies cases are not rare and transparency levels in the market are among the lowest. This makes the sector extremely fragile and vulnerable especially in a much volatile period for Chinese stocks markets.

CBRC released a draft of rules for the P2P lending sector at the end of December 2015. Among the proposed guidelines emerge a few that aim at increasing the level of transparency of peer-to-peer lending businesses. These drafted rules for P2P lending represent the first serious attempt from local authorities to regulate the market, which, so far, has benefited from a legal gray area that was letting the players operate as they preferred, with no mandatory investor protection measures in place. However, as some experts observed, the proposed rules are very vague, leaving many possibilities for free interpretation.

We’ll wait for the public comment period to be over to see the results of it and understand if the players will be in favor of the proposed approach or will suggest major changes. Given the level of failures and frauds, an increased level of transparency in this fast-growing market would be much beneficial.

Read the whole article on Crowd Valley Blog.

China digital finance

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Grow VC Group The Grow VC Group is the world leading, global pioneer of securities crowd funding, peer to peer marketplaces, new investment models and global business development. Established in 2009, the Group has developed new investment models on six continents and continues to innovate the global market.

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