The rise of internet finance and regulation of capital markets

Finance is the core of a modern economy and a major force in promoting economic development. Innovative and diverse financial models can effectively take up idle funds in society for allocation in a rational way, thereby boosting economic growth. With the development of internet and information technology, finance works closely with the internet, giving rise to internet finance.

Under the internet finance model, payment becomes convenient, market information asymmetry is very low, the parties for supply and demand of funds deal directly without having to go through financial intermediaries such as banks, brokerages and exchanges, and a new and convenient investment and financing channel is made available to meet the financial needs of ordinary people.

Apparently, internet finance has impacted the conventional financial industry substantially. What impact does this new financial model have on the capital market as part of the financial market? And how is it being regulated by law? This article gives an overview using the securities industry as an example.

Wu Jian is a partner at Zhonglun W&D Law Firm