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China will continue to cooperate with anti-monopoly authorities to curb monopolies and actively deal with algorithm discrimination and other new forms of anti-competition behavior among internet platform companies and strengthen the protection of consumer privacy and data security, Bloomberg reports as per central bank Governor Yi Gang at the Bank for International Settlements' conference on Regulating Big Tech.
The People's Bank of China will continue to strengthen the regulation of the payments sector and ask every financial services company, including personal information businesses, to be licensed.
Yi said the PBOC has required technology platform businesses that offer financial services to set up holding companies and bring all subsidiaries engaged in financial activities under them. He said the central bank would ask the holding companies to consolidate their balance sheets and strengthen prudential regulations.
Yi named three principles to guide the regulatory clean-up of fintech: licensing of financial businesses to operate, setting up firewalls between different parts of the business to prevent cross-sector risks, and severing of the direct link between non-banks and banking services.
China may split Alibaba Group Holding Ltd (NYSE: BABA) backed fintech Ant Group Co's Alipay and create a separate app for its loan business.
The PBOC ordered multiple tech companies to restructure their financial divisions into entities for supervision under the central bank akin to Ant's overhaul. The banking and insurance regulator commanded fintech platforms to offer banking services to comply with capital requirements like traditional lenders to curb risks.
Yi ordered financial institutions to collect, use, and store information strictly as per the law and protect consumers' privacy and rights. The central bank will define data ownership more accurately, better facilitate data transactions, and promote the fair use of data.
Price Action: BABA shares closed higher by 8.26% at $156 on Thursday.
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