10 May 2016
Guangzhou Financing Guarantee Firms Banned from P2P Business
The Guangzhou Financing Guarantee Association recently issued a statement prohibiting its member companies from participating in peer to peer (P2P) platform-related business, saying that P2P online lending platforms give rise to illegal fund-raising and other irregularities.
The full text of the statement is as follows:
To: All financing guarantee companies:
In the wake of frequent incidents related to P2P platform risk around the country recently, various provinces and municipalities have stepped up efforts in rectifying P2P online lending platforms with many ordering a halt to new P2P platform registration. The P2P platforms are said to be generally involved in irregularities including high yield, fictitious items, false publicity and the creation of capital pools. The following measures are to guard against the risk that may arise from involvement of financing guarantee companies in the P2P lending platforms and ensure the sustainable development of Guangzhou’s financing guarantee industry before promulgation of regulations on P2P platforms at the national level:
(1) Financing guarantee companies in Guangzhou are prohibited from providing financing guarantee and prejudgment attachment on the P2P platforms;
(2) Financing guarantee companies in Guangzhou and their shareholders or related parties are prohibited from holding a controlling stake or holding shares in a P2P platform;
(3) P2P platforms are prohibited from acting as contributing shareholders of financing guarantee companies in Guangzhou.