China's securities regulator will soon begin inspecting online equity financing platforms to address risks brought by illegal activities and help the platforms better serve the real economy.
The China securities regulatory commission (CSRC) will oversee several online platform, including equity-based crowdfunding, which allows investors to pool money via internet, Xinhua quoted Deng Ge, spokesman for the CSRC as saying on Friday.
The inspection aims to discover and correct illegal activities, minimise risks and lead platforms to perform better in serving the real economy.
The inspection will focus on several aspects, including whether the online fund raisers have promoted themselves publicly, whether the accumulated number of equity holders has exceeded 200, and whether the raisers have collected private equity funds in the name of equity-based crowdfunding, Deng said.
Some institutions are operating in the name of "equity-based crowdfunding", which are actually non-public equity financing or private equity funds raising, hence do not fall within the scope of equity-based crowdfunding activities allowed by the guidelines on promoting the healthy development of internet finance unveiled easier in July.
The CSRC has recently told governments at the provincial level to forbid institutions and individuals from illegally issue stocks under the guise of equity-based crowdfunding.
Also Read
To support innovation and the healthy development of internet finance, new policies were rolled out in July in guidelines by ten central government departments and industry regulators, including the People's Bank of China (PBOC).
"Internet finance could help micro enterprises with investment and fund raising, and also upgrade the quality and efficiency of financial services," an official with the PBOC said.