Financial authorities in Hunan, Liaoning, Xi’an, and Chongqing have announced the closure of local financial asset exchanges, in a bid to combat financial risks and illegal fundraising activities, reports Caixin. Regulators said they will not allow any financial asset exchanges in their jurisdictions and they warned against the risks of “pseudo-financial exchanges.”
The closure of the four exchanges marks the beginning of a broader clampdown, with existing financial asset exchanges nationwide expected gradually to cease operations, a person close to the regulatory body said.
“Financial asset exchanges have not significantly benefited the financial market and have instead facilitated illegal financing, necessitating a comprehensive shutdown,” said the person. Since the establishment of China’s first local financial asset exchanges in Tianjin and Beijing in 2010, the number of such institutions expanded rapidly, peaking at 80.