Ant Group unveils internal control standards as regulators tighten grip

Ant Group Co. Ltd. unveiled a set of internal control standards that govern its lending business and financial product offering, which are the focus of the ongoing probe by the Chinese regulators since its mega-IPO plan was halted in late 2020.

The standards, or so-called self-disciplined codes, include "responsible lending" practices such as not issuing loans to minors, and limiting credit for borrowers who are young or have repayment risk, the company said March 12. The company must also prevent small business loans from flowing into stock and real estate markets, and must not sell bundled products on its platforms, among other things, it said.

"We fully appreciate that a responsible digital finance platform has to do more than putting operational compliance, risk prevention and consumer protection as our business's baseline principles," said Ant Group general counsel Jonathan Zhou in an emailed statement.

"We should also take serious consideration of our ethical and social responsibilities, and play an active role in driving healthier, more inclusive and more people-oriented development of the fintech industry.

"This is why we are sharing with the fintech industry these self-disciplined codes for our digital finance platform, which we have been following and will continue to follow, to advocate for the healthier development of the industry."

The codes also serve as a response to a fintech ethics committee established in Zhejiang in March, in which the Alibaba Group Holding Ltd. affiliate is a founding member. The committee has since made proposals to advocate a healthier development of the fintech industry in China.

China has been tightening its regulations on fintech companies such as Ant, whose $34.4 billion IPO plans were scrapped in November 2020. The fintech giant has since been reported to overhaul its operations by spinning off its businesses into a financial holding company that puts it under similar capital rules as those for banks.

The firm also had a sudden change at the helm March 12, when Chairman Eric Jing took on the additional role of CEO when Simon Hu resigned, reportedly for personal reasons.