Internet Financial Product Innovation-legal Regulation Study

As a new financial product, Internet financial product is getting its way toward popularity in trade via simple and easy operation and strong fund-raising ability. In China, Internet finance is a latecomer, but ever since the statement supporting it, namely, “propel the healthy development of Internet finance” was put forward in 2014 Chinese Government Report made by the state council, it has been recognized officially. Currently, given the increasingly obvious trend of financial internalization, more and more Internet enterprises are reaching their hands toward financial industry by virtue of their merits in information and data; which indicates that the momentum of Internet finance is by no means neglectable.Internet financing refers to providing financial service on the Internet, to do which the financial institutions must dig into information via its strength in “big data” and other modern information technologies to explore the demands and locations of customer, so as to provide highly targeted services. Problem is, some Internet finance companies in China, who are running a rat race for market share, design products and services of various modes while clear strategies and purposes, as well as expertise in financial risk management, are missed from bottom to the top. Some staffs are even notbe implemented, accidental events are hard to be coped with, and many of the practitioners don’t even have clear understandings toward this very term. To be frankly, any one, company or individual, is seems to be able to sale “Internet financial products” as long as he or she builds a website and handle their offline financial products online. The point here is, there is no law or regulation that is to define the term “Internet financial product” at all.This paper, via methods such as comparative analysis, case study, generalization and summarization, etc., illustrates the realities of Chinese Internet financial industry, studies the supervisory system in this novel industry, and probes into the problem of lacking related laws and regulations. Furthermore, referring the legal supervision models abroad and in light of the existing problems in the said industry, several concrete measures to be taken for special legislation on product supervision and asset securitization in the Internet financial industry are put forward:Firstly, given the diversification in Internet financial business and the increasing operational risk brought by financial innovation, legislation could be made starting from strictly regulate related contract makings and third-party payment platforms; secondly, existing consumer protection law is remote from efficiently settling consumer protection problems caused by Internet financial innovations, which calls for other systems, such as Internet Account Security System, Internet Financial Customer Protection and Supervision System, and Online Settling Regime for Internet Financial Consumption Dispute, to secure such protection into place; Thirdly, financial supervision and regulation are not heal-all, only when a complete security information management system is also built, can the momentum of Chinese economic development be fueled with new vitality.