Cabinet backs self-regulation of online financial industry

China's State Council, or its cabinet, approved the formation of an Internet finance association to promote self-regulation of the online financial industry. The association, which will run under the leadership of the People's Bank of China, needs ratification by the Ministry of Civil Affairs, an industry source who declined to be named said.

The China Banking Regulatory Commission will be mostly responsible for regulating peer-to-peer lending and the central bank will regulate third-party payment services, Yang Xiaojun, the CBRC's deputy director of the supervisory cooperation department for banking innovation, said.

Crowdfunding is likely to be regulated by the China Securities Regulatory Commission and the China Insurance Regulatory Commission will likely regulate Web sales of insurace, Yang said.