Research On Investors’ Protection Of P2P Network Lending

In recent years, with the rapid development of Internet technology and the increasingly sophisticated domestic credit environment, P2P net-lending, as a new point-financing mode, has been growing explosively in China’s rapid economic growth. As a complement of traditional financial system, P2P net-lending plays an irreplaceable role in our country. However, due to the rapid expansion of the market and the absence of external supervision for a long time, P2P net-lending platform emerged a large number of failures, which caused great damage to the rights of investors. Therefore, it is important to build an all-round, multi-level system of protection to P2P net-lending investors’rights.In the first part, the credit platform background, main patterns and risk of the industry of P2P network in our country are discussed. From the date of June 2007, when the first P2P net-loan platform established, the process of P2P industry developed less than a decade. By 2015, the national total number of platforms is over 3800, industry-wide volume is more than ten thousand million, and in recent years it has maintained exponentially. Different from foreign relatively simple P2P net-loan patterns, our P2P net-loan platform developed a wide variety of models, according to specific conditions and market demand for all aspects of optimization and variants. Among them, there are three main modes:pure-line mode, creditor’s-rights-transfer mode and collateral mode. However, although it has a very high intrinsic value and the pace of development, China’s P2P net-loan industry also bears great risks. The main risks include policy risk, credit risk and competitive risk.In the second part, the necessity of P2P network credit investor protection, investor protection rules and the main problems existing in the actual operation are discussed. Due to the inherent risk and the absence of regulation, there are many problem platforms in our P2P industry. Once the platform collapsed or run, the legitimate rights and interests of investors will suffer a very large violation, and the investors will face difficulties in maintaining the rights. As to the protection of rights and interests of net-loan investors, there are provisions in the applicable contract law, criminal law and procedure and other laws in our country. Besides, the regulation of the CBRC for P2P network-lending is also perfecting. However, there are still many problems in our country. First of all, in terms of industry, our credit system is not perfect, our bad debt rate has no uniform standards and our capital operation is opaque. Secondly, in terms of the platform, there are pyramid scheme and other malicious frauds, which may damage the interests of investors.In the third part, the main system and the enlightenment to our country are discussed in this paper. In the UK, P2P net-loan platform, P2P Finance Association and Financial Conduct Authority have established a relatively complete system of investor rights protection. There are three methods which help to our country’s system:to establish security fund, to improve the credit rating system and to improve investor complaints program. In the US, P2P net-loan and securities trading platform for investors Protection Association adopted a series of effective policy, including the three most important measures to our country:a clear net-loan nature of the product, to establish escrow system and to improve the information disclosure mechanism. The Germany, Australia and South Africa have also done relatively well in the P2P net-loan investor rights protection, including the three most important measures to our country:upgrading loan management system, information industry sharing and signing Bank cooperation agreement.In the last section, the following suggestions are put forward, which aim to perfect our P2P network system of protection of the rights of investors:Firstly, establish and improve our P2P net-loan regulatory system, which means the CBRC should develop specific rules P2P network lending regulation, push the implementation of P2P net-loan platform licensing business license and filing system, and improve the credit guarantee system. Secondly, improve investor rights protection legal system, ensure investors’right to know and privacy and the right of claim through legislation, settle P2P lending dispute settlement procedures and form judicial guidance of dispute. Thirdly, strengthen our P2P net-loan industry associations autonomic function, set up P2P network credit union loan in our country, strengthen the education of investors and warning, and protect the legitimate rights and interests of investors from the subjective psychological level.