Tencent doesn’t expect a serious impact to its business if it folds its FinTech business into a financial holding company as recommended by regulators, Bloomberg writes.
The company says it has been compliant with regulations.
The company’s operations haven’t been very strongly affected by the rules rolled out recently, which affected everything from online lending to interest rates and customer age limits, according to President Martin Lau.
But the company — China’s largest — will face more scrutiny of its FinTech operations now. Regulators are planning to increase supervision of a new but burgeoning industry that could pose risks to the system.
Regulators are considering asking the company to fold its FinTech operations into a financial holding entity that could be treated more like a bank.
But Tencent’s quest to do that could prove more cumbersome a task than Ant Group‘s, Bloomberg writes, with several scattered business groups and several units commanding them, unlike Ant, which had consolidated everything under one umbrella.
Tencent’s business encompasses two business units including WeChat, the messaging app considered ubiquitous in that area of the world. The group also covers the back-end infrastructure for WeChat as well as the wealth management business, mutual fund and money market fund investment options available with WeChat.
Regulations are still being discussed, but Bloomberg writes that one requirement the micro-lending business could face is co-providing 30 percent of funding, which could increase capital requirements.
China has rolled out new guidelines for anti-monopoly restrictions, building on a draft from last November and clarifying that the rules are supposed to target companies’ price fixing and aim to stop monopolistic behaviors and protect “fair competition” in the market.
The draft rules in November also said that the guidelines would prevent host companies from selling their products on more than one platform. The regulations will put more pressure on companies like JD.com and Alibaba and financial service platforms such as Tencent’s WeChat Pay and Ant Group’s Alipay.