The Legislative Supervision Of Chinese Peer-to-peer Lending

As one of the three major areas of Internet finance with online payments and crowdfunding, peer-to-peer lending is an important part of inclusive finance. Since the first peer-to-peer lending platform ppdai was established in 2007, because of the advantages of obtaining the information in low cost and low transaction threshold, Chinese peer-to-peer lending industry develops rapidly, offering the form of direct financing besides the bank loans in a traditional way for wide persons and small and micro businesses which demands for funds, greatly promoting the efficiency of private lending, broadening the investment channels for small and medium-sized investors.However, the lag of legislative supervision of peer-to-peer lending industry boosted risk accumulation, so lots of phenomenon exposed in P2P platforms, such as illegal fund-raising, money laundering, illegal diversion of customer funds, illegal guarantee, bad debt crisis, actual controllers flee, the industry is into the disordered state of development. Until the issue of draft rules of P2P in the end of 2015, it made up the blank of Chinese regulation of P2P industry. But, the current legislation is still in the preliminary stage, we need to make a rational analysis on the regulatory status, refining, improving and supplementing the corresponding system to ensure the healthy development of private credit market. Regulators should uphold the basic belief of encouraging financial innovation and protecting financial interests of consumers at the same time, and balance the risks of P2P platforms and consumers reasonably, then on the base of the idea, formulate specific regulatory scheme.The first chapter of this paper introduces the origin of P2P and three modes of foreign developments of peer-to-peer lending, then describing the status of peer-to-peer lending industry in China. In the second chapter, we sort out all kinds of legal relations existing in our country’s practice of P2P lending and analyze their legitimacy in categories. Firstly peer-to-peer lending is private lending in essence, we discuss the validity of loan contracts and the legitimacy of interests, then analyze validity of service contracts, assignments of debts and guarantee contracts between platforms and consumers in sequence. At last, the Internet attributes determine the necessity of analyzing the legitimacy of electronic contracts, which are different from ordinary civil documents. Analysis of credit risk, legal risk, liquidity risk, operational risk of Chinese P2P lending status in the third chapter, provides problem orientation for the construction of supervision systems. Through the comparative study with the supervision mode of the US and European Union, we could compare and reflect on the status of legal regulation in China. The last chapter is the emphasis of the paper, it sets the tone for the theory of supervision concepts and responsibilities division to balance the inclusive finance and traditional finance, the caveat emptor and sellers’responsibilities. Finally, specific suggestions are put forward in two aspects of regulatory measures and external service measures, such as setting the access threshold, the establishment of exit mechanism, playing a positive role of industry self-regulatory organization.