(Yicai Global) Dec. 12 -- China's central bank has reminded businesses operating in the fintech sector that they need permits.
"The essence of financial technology is finance, and financial services must be licensed," Li Wei, director of the science and technology department of the People's Bank of China, said at a fintech-themed annual forum in Shanghai today.
Li said regulation of fintech innovations should adhere to three principles: sticking to licensed operations, complying with laws and regulations, and protecting rights and interests.
Based on these, the PBOC is exploring ways to develop and improve regulation of the sector, Li said. In line with a 'pilot first and then promotion' approach, the bank took the lead last week by starting pilot work on monitoring and regulating fintech innovations by setting up a so-called regulatory sandbox in Beijing.
First introduced by the UK's Financial Conduct Authority in 2015, the sandbox model enables fintech firms to experiment, running tests under real or simulated market conditions, while regulators adjust existing frameworks and explore new regulatory boundaries based on the results.
In terms of adopting defensive measures for security, Li said that the PBOC is also working with the National Internet Finance Association to speed up the introduction of a registration system for financial apps to bolster assessment and certification.
Editor: Tang Shihua