The online asset management industry is the next target of the government’s war of risk, Caixin Global reports, with a wave of bans being placed on unlicensed financial businesses.
The government is wary of the build-up of capital being used to buy risky financial securities, an issue which became apparent during the stock market turmoil of 2015, when it was revealed that trillions of yuan had been used to buy lightly-regulated funds sold by banks and insurers offering artificially high yields.
Under the new regulation, selling online asset management products without a license may be chargeable as illegal fundraising or illegal issuance of securities.
All unlicensed online asset managers have been issued a deadline of June by China’s internet finance watchdog to stop such practices.