Ant Group as a whole will apply to become a financial holding company that is overseen by China’s central bank as billionaire Jack Ma’s financial technology giant makes efforts to calm regulatory concerns in the country.
All of the company’s institutions engaged in financial businesses will be included in the financial holding company and be regulated as per the plan, Xinhua reported.
The People’s Bank of China (PBOC), the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange carried out joint regulatory talks with Ant Group on Monday.
After the previous talks with regulators in December last year, Ant Group set up a special task force to map a rectification plan under the guidance of the financial authorities and to actively carry out the rectification work, according to Pan Gongsheng, deputy head of the PBOC.
The group must carry out profound and effective rectification to stay firm in serving the real economy and the people and actively respond to national development strategies, he said.
Pan said the group’s rectification plan aims to correct unfair competition in the group’s payment business, giving consumers more payment options.
According to the plan, the group should break the monopoly of information, and guarantee the security of personal and state information, he said.
The group should strictly implement the requirements of prudent regulation, improve corporate governance, and rectify non-compliant lending, insurance, wealth management and other financial activities, and curb high leverage and risk contagion.
The group should manage the liquidity risks of major fund products, according to the plan.
The move comes as China is tightening regulation for Internet companies.
The formulation of Ant Group’s “rectification plan” follows the suspension of the company’s initial public offerings (IPOs) in November, 2020.
China’s decision to suspend the IPOs came after Ma publicly criticised the country’s financial regulators.
In another setback for the Ma-founded business empire, Chinese regulators last week slapped a record fine of 18.2 billion yuan ($2.8 billion) on eCommerce giant Alibaba Group Holding.
The fine was imposed on Alibaba for violating anti-monopoly rules as the country seeks to rein in the power of Internet conglomerates.
