China has issued new regulations for the country’s fast-growing peer-to-peer lenders, as the government seeks to tame excesses in an industry rife with fraud and lax risk management, the Financial Times reports. The rules, issued on Wednesday, forbid online lenders from accepting deposits or guaranteeing principal or interest on loans they facilitate. They ban P2P platforms from securitizing assets or offering debt transfer mechanisms that mimic securitization. Companies are prohibited from using P2P platforms to finance their own projects. The rules cap borrowing at Rmb1m ($150,000) for individuals and Rmb5m for companies — a limit that applies to combined borrowing from multiple platforms. For lenders the limit is Rmb200,000 and Rmb1m for individuals and companies, respectively, on a single platform.
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