China : Ant Financial Gets Approval to Open Equity Crowdfunding Company

By  Qu Yunxu,

Beijing) – Ant Financial Services Group has received a business license from Shanghai authorities to open an equity crowdfunding company –the latest indication that regulators are close to giving their approval to the industry.

An executive from Ant Financial said that the license does not mean the company closely linked with e-commerce giant Alibaba Group Holding Ltd. is near launching an equity crowdfunding business because it is waiting for regulations to publish rules on the industry.

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“The CSRC has been working on a crowdfunding regulation and we can only say for sure if we can launch a business after we see it,” the person said.

A source close to the China Securities Regulatory Commission said that Ant Financial was likely to be among the first group of companies in the country to get approval.

Crowdfunding companies allow investors to buy shares of usually small private startups with small amounts of capital.

Ant Financial has been working on plan to launch an equity crowdfunding service on the shopping website Taobao, which is owned by Alibaba Group. Ping An Insurance (Group) Co. launched a unit to run an equity crowdfunding business in April, following similar moves by JD.com Inc., another Chinese e-commerce giant listed on the Nasdaq.

Equity crowdfunding has operated in a gray area in China since 2013. Regulators have been vague about their attitude toward the industry. Raising capital from strangers and rewarding them with cash could be seen as illegal fundraising, a crime punishable by death in the country.

However, Premier Li Keqiang told a State Council meeting in November that the government planned to allow equity crowdfunding pilots to address the difficulty small businesses have raising funds.

CSRC spokesman Zhang Xiaojun said on May 30 that the regulator was wasting no time drafting rules. A few days later he said the commission had basic rules laid out.

Several sources close to the CSRC said it had planned to unveil the rules in June, but then put if off until in July. The reason for the delay is unclear.

Ant Financial filed the paperwork to register its crowdfunding company with the Shanghai Administration for Industry & Commerce in May. Registration records seen by Caixin show the firm, Ant Dake (Shanghai) Equity Crowd-funding Service Limited Co., has registered capital of 100 million yuan.

(Rewritten by Li Rongde)

Source

http://m.english.caixin.com/m/finance_economy/

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