With the rapid development of the financial market, various financial institutions have come into being. Non-financial institutions (NFS) are playing an increasingly important role in the financial institution system. Non-financial institutions mainly include private lending, Internet finance, P2P online lending, equity crowdfunding, financing guarantees, urban microfinance companies, etc. These non-financial institutions have made positive contributions to the development of China's financial market, but at the same time, they have also brought many risks to the financial market. In order to ensure the sound operation of the financial market, the regulatory authorities have become increasingly strict in the supervision of non-financial institutions. This article will demystify the compliance risks of non-financial institutions in various industries and help financing companies understand the importance of industry risk prevention.
Types and characteristics of non-financial institution risks.
1.Private lending.
Private lending refers to the lending of funds between natural persons, legal persons or other organizations through private channels. This risk is characterized by the fact that the risk is highly contagious and difficult to control. In private lending, lenders usually demand higher interest rates, while borrowers may fabricate assets or over-indebtedness in order to obtain lower interest rates, thereby increasing risks. In addition, the risk of private lending also lies in the uncertainty of the credit status of lenders and borrowers, which brings great risks to the entire financial market.
2.Internet Finance.
Internet finance refers to the combination of the Internet and finance to provide users with financial services through online platforms. This risk is characterized by a concentration of risks and a strong contagion of risks. Internet financial platforms usually operate capital pools through maturity mismatches, capital pools, etc., so as to improve the efficiency of capital utilization, but at the same time, they also increase risks. In addition, the compliance risks of internet financial platforms also include problems such as non-standard information disclosure and difficulty in guaranteeing full capital.
3.P2P online lending.
P2P online lending refers to the provision of lending services for individuals or enterprises through online platforms. This type of risk is characterized by risk diversification and high risk. P2P online lending platforms usually mismatch the maturity of funds, thereby improving the efficiency of capital utilization, but at the same time, it also increases risks. In addition, the compliance risks of P2P online lending platforms also include problems such as difficulty in guaranteeing full capital and non-standard information disclosure.
4.Equity crowdfunding.
Equity crowdfunding refers to the opportunity to provide equity to investors through online platforms. This risk is characterized by a high risk and a highly contagious risk. Equity crowdfunding platforms often use funds to invest in projects, but at the same time, they also increase risk. In addition, the compliance risks of equity crowdfunding platforms also include problems such as non-standard information disclosure and difficulty in guaranteeing full capital.
5.Financing Guarantees.
Financing guarantee refers to the guarantee company providing guarantee services for financing enterprises. This risk is characterized by a high risk and a highly contagious risk. Financing guarantee companies usually make profits by charging guarantee fees, etc., but at the same time, they also increase risks. In addition, the compliance risks of financing guarantee platforms also include problems such as non-standard information disclosure and difficulty in guaranteeing full capital.
6.City Microfinance Corporation.
An urban microfinance company refers to an institution that provides microfinance services to urban residents. This risk is characterized by a high risk and a highly contagious risk. Urban microfinance companies often make a profit by charging higher interest rates, for example, but at the same time, they also increase risk. In addition, the compliance risks of urban microfinance platforms also include problems such as non-standard information disclosure and difficulty in guaranteeing full capital.
Risk prevention and compliance supervision measures for non-financial institutions.
1.Improve the regulatory system.
Departments should improve the regulatory system for non-financial institutions, clarify regulatory responsibilities, and strengthen supervision. While improving the regulatory system, it is also necessary to strengthen compliance education for non-financial institutions and improve the compliance awareness of non-financial institutions.
2.Strengthen risk control.
Non-financial institutions should strengthen risk control, establish and improve risk management systems, and ensure that risks are measurable, controllable and tolerable. For high-risk businesses, strict approval procedures should be adopted to ensure that business risks are within a controllable range.
3.Strengthen information disclosure.
Non-financial institutions should strengthen information disclosure, timely and accurate disclosure of business-related information, and improve the transparency of the financial market. Regulators should strengthen supervision and impose penalties on non-financial institutions that disclose information in a non-standard manner.
4.Strengthen the supervision of capital management.
Non-financial institutions should strengthen the supervision of capital ownership to ensure capital ownership. For businesses involving full capitalization, strict approval procedures should be adopted and an independent fund custody account should be established.
5.Standardize business behavior.
Non-financial institutions should standardize their business behavior, follow market rules, and be honest and trustworthy. Regulators should strengthen compliance education for non-financial institutions and raise their awareness of compliance.
Giant entrepreneurs: As a part of the financial market, the risks of non-financial institutions have a great impact on the entire financial market. In order to ensure the sound operation of the financial market, the regulatory authorities have become increasingly strict in the supervision of non-financial institutions. Non-financial institutions should strengthen risk prevention, improve compliance awareness, and standardize business behavior, so as to reduce risks and make positive contributions to the stable operation of the financial market.