Fintech giant Ant Group has been called in for a meeting with financial regulators, China’s central bank announced today, the same day that market regulators announced an anti-monopoly probe into sister company and e-commerce giant Alibaba.
Why it matters: This is the first publicly announced high-level meeting between regulators and Ant Group since the fintech giant’s IPO was abruptly suspended, days after another similar meeting.
- The company has been under regulatory pressure as China’s authorities tighten the screws on fintech, who are concerned that unbridled tech giants bring systemic risk to the economy.
Details: “In the coming days,” the Alibaba affiliate will be “interviewed” (our translation) by the People’s Bank of China (PBOC), the Insurance and Banking Regulatory Commission, the China Securities and Exchange Commission, and the Foreign Exchange Commission, the PBOC said in a statement this morning.
- Authorities will also “urge” Ant Group to comply with regulatory financial, antitrust, and consumer protection requirements, the notice from the PBOC said.
- Ant Group responded to the news just ten minutes after the central bank’s announcement with a post on its official WeChat account, say that it will “seriously study” and “strictly comply” with regulatory requirements.
- At the same time, Alibaba is trying to satisfy regulators concerned about its market power in an investigation into accusations of monopolistic behavior.
Context: On the same day that Jack Ma met with regulators, Nov. 2, new rules on microfinancing were released. Credittech makes up around 40% of Ant Group’s revenue, according to its IPO prospectus.
- On Nov. 3, the Shanghai Stock Exchange suspended Ant Group’s hotly anticipated $34 billion IPO, saying that the company didn’t meet disclosure requirements about regulatory risk.
- Since, Ant Group has made changes to its operations. Just yesterday, it lowered credit limits for younger users of its Huabei microlending platform. Last week, it stopped providing bank deposit products on Alipay.
- New draft antitrust rules were released on Nov. 10 by the State Administration for Market Regulation. Alibaba, Tencent, and and SF Express were fined over anticompetitive behavior on Dec. 14.
- Earlier in December, Guo Shuqing, the head of the China Insurance and Banking Regulatory Commission, called for more national level regulations on fintech.