Due to development of financial technology and international market trends, several domestic platforms for contractual loan matchmaking services have been created. Considering that money lending by individuals is governed by the Civil Code and domestic laws do not prohibit lending activities of individuals or brokerage service for such activities and domestic online Peer-to-Peer lending platforms (“P2P”) are still in the initial stage of market development, the FSC has introduced the self-regulatory rules for cooperation between banks and P2Ps, in order to appropriately preserve rooms for developing new business activities of P2Ps while facilitating financial technology innovation, protecting customer rights and controlling risk at the same time.
After collecting information about international development and regulatory supervisions in this regard as well as assessing the size of domestic financial market and the circumstance of loans provided, the FSC has encouraged cooperation between banking industry and domestic P2Ps and has approved for recordation the self-regulatory rules formulated by the Bankers’ Association to facilitate development of the domestic P2P market. After discussions, the banking industry and P2P service providers have reached a consensus of cooperating on six items, including fund safekeeping service, fund transfer service, credit analysis and rating services, Peer-to-Bank (P2B) loan service and debt documents safekeeping service provided by banks as well as mutual cooperation on advertising.
According to the FSC, such cooperative model features labor division, mutual support and collaboration on P2P business promotion between banks and P2P service providers. The innovative and efficient business model jointly developed by both sides will enhance the credibility of the platform and protect consumer rights.
The FSC has also reminded P2P service providers that contractual loan matchmaking services shall not involve issuance of negotiable securities, beneficiary securities and asset-backed securities. Fund transfer services for the payment/collection of loan principle/interest shall not involve deposit-taking or collection of stored value funds. Provision of specific services, including data collection, information disclosure, credit rating and information exchange, shall not violate related regulations, such as the Personal Information Protection Act. Inappropriate debt collection practice shall not be adopted when debt collection service is provided, and related regulations, including the Fair Trade Act and the Multi-Level Marketing Supervision Act, shall not be violated.