Legal Supervision Of P2P Network Borrowing Platform

Based on Internet technology, P2P lending platform (peer to peer lending, alsoknown as "person to person loan"), is a third-party platform connecting personal fundsfor individuals to directly obtain personal microlending. Zopa is the first P2P lendingplatform in the world, which was founded in London on March,2005. PPDAI,established in2007, is the first P2P lending platform in China. After that this industrydevelops slowly in China until its booming in2013. By the end of January2014, therewere553P2P lending platform in China. However, a lot of negative news aboutbankruptcies, violations, crimes of P2P lending platform is reported constantly. Theseevents reflect the core issue that our P2P lending platform has no statutes to apply. Forthe moment, there is no statutes and no regulation for P2P lending. In addition, theindustry access standards are low and not harmonized. Its regulatory approach mainlydepends on self-discipline by industry associations. Legal regulatory issues about P2Plending platform need to be settled urgently.This paper is composed of five parts:The first part introduces an overview of P2P lending platform. Firstly, itelaborates on the concept of P2P lending platform, and then noted its substance,namely,"financial disintermediation" that financial activities do not require bank as amedium. Secondly, it is a brief description of the current situation concerning P2Plending platforms in China.The second part reveals the frequent bankruptcies and fund-raising frauds behindthe prosperity of P2P lending platforms. It aims to point out the core issue of P2Plending platforms that is no regulatory, no laws, and no industry access standards. The“three no” regulatory situation awaits to improve.The third part uses law analysis methodology and takes current law documentsrelated to P2P lending platform as subjects. It specifically discusses from four aspects,including the status quo of legal provisions, the legal nature of the platform, thecharacteristics of self-discipline and the effect of the revised “Company Law”.The fourth part adopts comparative analysis methodology and takes regulatorystatus of P2P lending platforms in the UK and the USA into account. First, itintroduces the regulatory status in the UK and the USA, indicating both of the twocountries having clear regulatory departments and stable regulatory environments.Second, it comparatively analyzes legislative situations, the competent authorities, as well as privacy policies between China and the two countries.The fifth part makes three suggestions to solve the core issue of P2P lendingplatforms in China. First suggestion is to find a competent authority and establishmultiple overseeing agencies. Second suggestion is to legislate regulatory principlesand industry access standards. The last suggestion is to promote self-disciplinedfunction by industry associations.