Ant Group is planning to turn itself into a financial holding company overseen by China’s central bank, responding to pressure to fall fully in line with financial regulations, reported the Wall Street Journal.
Chinese regulators recently told Ant to become a financial holding company in its entirety, subjecting it to more stringent capital requirements, said WSJ sources familiar with the matter. Ant, in response, has submitted to authorities an outline of a restructuring plan, they said.
Designating Ant in its entirety as a financial holding company wasn’t something earlier envisioned by the company’s executives and stakeholders. In its listing prospectus last year, Ant said it intended for one of its subsidiaries to become a financial holding company and house its licensed financial businesses such as asset management and consumer lending. Doing this at the group level will subject Ant to a thicket of regulations similar to those that govern banks, and affect its growth and profitability.
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