0 China Internet Financial Forum jointly sponsored by Finance and Finance Museum

The "China Internet Finance Forum", co-sponsored by 0 financial and financial museums, was held in Beijing on June 19, 2014. The theme of this forum: the new opportunity of Internet finance: norms and integration. The picture is Peng, a professor at Peking University Law School.

The "China Internet Finance Forum", co-sponsored by 0 financial and financial museums, was held in Beijing on June 19, 2014. The theme of this forum: the new opportunity of Internet finance: norms and integration. Peng, a professor at Peking University Law School, said that, according to the existing legal analysis, peer-to-peer sites are illegal fund-raising, fully compliant with the law of the two most important typical characteristics, promised to return, to raise funds to the public.

The following is a transcript:

Peng: Good afternoon! Just trillion abundant said the tall philosophy, to the law time to talk about concrete reality.

I want to talk about two aspects of the problem, everyone is saying that the internet subversion of finance, on the Peer-to-peer to the existing law is not a subversion. Under the existing legal framework, if there is no way of enacting legislation to overturn existing laws, what can be done under the existing legal framework.

First of all, say that a person said to borrow 100 million, give you 20% interest, he advertised in the newspaper to use 20% interest to borrow 100 million, people think he is illegal fund-raising? It is illegal to raise money for the public to raise funds under the existing law without approval.

Assuming that he continues to advertise, with 20% interest, only to raise 10,000 dollars, or to raise only 20 dollars, constitute illegal fund-raising? In the nature of the same, promised return, to the public to raise funds. Is there a blow to this behavior?

Let's say that the raise of 100 million, each person gives the money is in million, he looked for 10,000 people. Suppose to raise only 10,000 dollars, he gives the condition that each person receives a maximum of 1000 dollars, or 100 dollars. Each lender who provided the funds gave him only a very small portion of the money, and even if there were losses, the loss of each lender was small.

Assuming that, in addition to some requirements, lenders can only invest 10% of their income per year on the scale of their assets, and require a loan to be shared evenly, with a maximum of 1000 dollars per pen, and 10,000 dollars must be divided into 10 projects. If there is a risk in a project, there is no way to return the money, how much loss?

We say that the diversification of the risk of this matter, under the traditional technical conditions is not unable to do, but no one is willing to do, because the cost is too high. I take 10,000 dollars to invest, to find 10 projects, each project 1000 yuan, for me, the cost is too high. But the advent of the Internet has changed the matter. It made it easy for me to invest 10,000 dollars in 10 projects. The people who are familiar with the public are doing this thing. This matter presents a great challenge to the traditional law.

We have considered this matter in traditional law. What we have just said is to raise 100 million of the public and I think you are illegally raising funds. If we only raise 10,000, I will ignore you even if it is illegal to raise money in nature. This is a small exemption that is considered by traditional law. From a regulatory point of view, the loss of money, only to raise 10,000 yuan, I put so much supervision costs to hit you, for the regulator is not worth it, because the damage caused is not small. The traditional regulatory law has once been considered a small exemption for the collection of funds, considering the amount of money raised by the fundraiser. The Supreme People's Court, in its 2010 judicial interpretation of illegal fund-raising, proposed 200,000 and 1 million restrictions, similar to the concept of small exemptions.

The emergence of the public, so that we can focus on another level of small, from the perspective of investors. Assuming that each investor's losses are small, capital investment is very fragmented. In this case, if we insist on his protection, it is also disadvantageous to him. The most typical example is that we often meet beggars on the Beijing subway. Although many media have already revealed that they have more money than you, but you give him one or two yuan is also very voluntary, in addition to the subway staff, also no one to control him, because he to you loss is very small, no loss, but also satisfied with your side of the heart.

So the existing law at this point, Internet technology makes it possible for every small investor to diversify the cost of investment to a large extent, the existing law began to consider this issue. The more typical performance is the 2012-Year Jobs Act in the United States, the concept of a small exemption to investors in the stock raising, the annual income of less than 100,000 U.S. dollars, the annual investment in the largest number of funds is required to raise $2000 dollars. This is a new way of investing, and the protection of investors is not a fatherly form of protection. We have to think that a lot of small investors also want to be able to take risks, I call it a small wager pleasant. Small investors also want to be able to gamble. What the new public raises to the law is the change of this mentality.

Assuming that Internet technology can be promised, through the network, the collection and analysis of large data, credit risk can be very detailed portrayal and control, I believe that in the future, the amount of small exemptions for illegal financing will be greatly improved. Can not do now, do not know.

The first level is about the challenges to existing laws, which need to be done through legislative exemptions and legislative changes. We are in the process of amending the Securities Act this year, and there may be breakthroughs and discussions.

The second level is the existing one, assuming that the law is not being repaired, or that the method will not be 1:30. I wrote a paper some time ago on the micro-letter, called "illegal fund-raising and Peer-to-peer website." Many people scolded me after reading, because my first sentence said all Peer-to-peer in the existing law is consistent with the characteristics of illegal fund-raising. Many people are dissatisfied with me. Actually, that's not what I'm talking about. From the nature of the analysis, this is the case. According to the existing legal analysis, peer-to-peer sites are illegal fund-raising, fully comply with the law of the two most important typical characteristics, promised to return, to raise funds to the public.

What I want to say is that even if it is found to be illegal, there is no room for survival under China's existing laws. My article suggests that there is room for survival.

When it comes to illegal fund-raising under China's existing law, it seems to be a crime to say illegal fund-raising. But in fact, under China's existing law, the treatment of illegal fund-raising is divided into two levels. The first is the attack of criminal law level, is the treatment of crime. The second is the level of administrative supervision, which is the regulatory action of financial regulators based on investors ' and financial security considerations.

The core point I put forward in this article is that at the level of financial regulation, we can set aside a legal space for our peer-to-peer existence. Why stay? I think there are two levels of truth. On the first level, the Peer-to-peer website itself is a reasonable supplement to the formal finance in China's existing financial system, which can solve the deficiencies of the existing financial services in some small micro enterprises and personal consumer credit. The second reason is that the current situation of internet finance is difficult to see with the continuous development of technology. It can not solve the credit risk analysis of the loan relationship, it is not yet known, it is possible to observe a period of time to see how it grows. The premise is that risk is controllable. At this level, we have been advocating that financial regulators should leave a free space for peer-to-peer growth within their sphere of competence. The premise, of course, is that the risks we have just talked about are manageable.

What do you mean, risk controllable? The concept is divided into three levels under the existing law. The biggest level is the crime we just said. We are against the illegal financing from two levels, constituting a crime to investigate criminal responsibility. Those who do not constitute a crime are dealt with by a financial regulatory body. So the first level is that we believe that under the existing law on the minimum threshold of financial crime limits should constitute a peer-to-peer web platform supervision of the online. In other words, the Supreme Court in the 2010 illegal fund-raising judicial interpretation of the definition of personal absorption deposits more than 200,000, enterprises more than 1 million, individuals to more than 30 people, enterprises to more than 150 people raise funds constitute illegal absorption of public deposits, to investigate criminal responsibility. This boundary should become a daily line. Exceeding this limit may constitute a crime. Of course, this can be discussed again. In fact, it's not very meaningful to differentiate between individuals and businesses, and limiting numbers is just the opposite of our philosophy. We want to disperse, the more people the better, because the amount of each person will become very small.

Under this boundary, we think that financial regulators have to grasp only two factors. One factor is that there is no systemic risk. Another factor is the reasonable protection of so-called investors. We have recently conceived of a regulatory mentality. We believe that under the existing legal framework, if nothing changes, peer-to-peer regulation can be differentiated by the boundaries of judicial interpretation. If you do not meet this limit, you ask a single borrower can break through 200,000, enterprises can break through 1 million, if this can not raise funds to the public, should take the private sector, from qualified investors to get the money. This part involves private equity not in our usual peer-to-peer range, although some peer-to-peer companies do.

If we follow this line, it should be within the scope of financial regulation, and we think we can build some of the most basic institutional arrangements to guard against systemic risk and provide investor protection, like baseline regulation. We think there are several important factors.

First, existing Peer-to-peer Web companies should be required to file and submit reports to regulators.

Second, there should be some professional norms, the most typical professional norms are required Peer-to-peer platform should perform the review of borrowers. You can't let this platform become a liar. The tools used, should be a reasonable review of the borrower's basic information, carefully determine the level of risk.

Thirdly, it has the requirement of fund trusteeship. Peer-to-peer Platform not only provides information intermediary services, but also the funds should be entrusted to qualified third parties.

From the perspective of investor protection, sufficient information disclosure should be carried out to make clear and clear disclosure on the interest rate and the standard of charges.

Many platforms may end up being poorly run or fraudulent, hoping to make arrangements beforehand. When poor management problems, the borrower's debt may not expire, investors still need someone to manage their claims, should be in advance reasonable arrangements. When a problem arises, it should be handled by a third party.

My basic idea is this, thank you!