MNI BRIEF: PBOC Seeks To Tighten Rules On Payment Institutions

The People's Bank of China has published a draft document outlining Regulations on Non-bank Payment Institutions, looking for public comment as the central bank looks to boost supervision methods to prevent systemic financial risks. The regulations will define the scope of the payment market as well as the standards for determining market dominance, helping to strengthen anti-monopoly regulations in this area.

According to the document, the PBOC can suggest the State Council's Anti-Monopoly Law Enforcement Agency spins off the payment business should any institutions abuse market dominance and affect the development of the payment market.

Any equity pledge, innovative business development and major event changes of payment institutions must be filed with the PBOC, the draft regulation notes.

The regulation says that financial services firms must be licensed to operate and the regulator will strengthen the supervision of shareholders, actual controllers and ultimate beneficiaries of payment institutions. This follows the authority's recent anti-monopoly probe in Ant Group, which operates the online payment platform for the world's largest e-commerce company Alibaba.