BEIJING, July 8 (TMTPost)— China’s financial regulators announced end of a years-long regulatory revamp on Alibaba’s fintech affiliate Ant Group with billions of dollars in penalties.

Credit：Visual China

Financial authorities have supervised and directed Ant Group, Tencent Group and other large platform businesses to comprehensively correct their violations of laws and regulations in financial activities since November, 2020, and most of outstanding issues in the financial business of these businesses have been addressed at the moment, therefore, authorities now change regulatory focus on the businesses, from concentration of correction to regularized supervision, according to a statement of the China Securities Regulatory Commission (CSRC) on Friday.

Authorities decided to fine Ant RMB7.123 billion (US$984 million) for violations on various fields concerning corporate governance, consumer protection, banking, insurance activities, payment and settlement, anti-money laundering, and funds sales, the statement said. It added Ant was asked to shut down its crowdfunding healthcare platform Xianghubao and compensate affected consumers.

Ant later that day confirmed completion of the required rectification and said it sincerely accepted the punishment. The fintech company vowed to follow the regulatory direction and further strengthen its compliance.

Since November 2020, from the perspective of strengthening supervision in accordance with the law and effectively preventing risks, the financial management department has supervised and guided Ant Group, Tencent Group and other large platform companies to comprehensively rectify the violations of laws and regulations in financial activities.

Ant Group was scheduled to list in Shanghai and Hong Kong on November 5, 2020 and raise more than $34 billion through its record-breaking initial public offering (IPO). However, the blockbuster IPO was suddenly halted prior to the dual listing.

Shanghai Stock Exchange announced in November, 2020 that Ant’s listing on the Nasdaq-style exchange STAR Market was postponed, citing the major events that Ant had experienced, including changes on fintech regulatory environment, “could make the company disqualified from issuance and listing conditions or information disclosure requirements”. During the talks with Ant’s actual controller Jack Ma, its chairman Eric Jing and CEO Simon Hu ahead of the listing, four regulators, including, the People’ Bank of China (PBoC), Chinese central bank, and China Banking and Insurance Regulatory Commission (CBIRC), ordered Ant to restructure its operations on credit, insurance and wealth management and comply with regulatory requirements, according to the exchange.

In a meeting in December, 2020, the central bank and other financial regulators urged Ant to carry out rectifications on its key businesses, such as to operate persona credit business with license and protect personal information, to improve transparency about third-party payment transactions, to establish a financial holding company to ensure capital adequacy and regulatory compliance.

Financial regulators summoned another meeting with Ant in April, 2021. Ant has developed a comprehensive and viable rectification plan following regulatory requirements. The plan includes five key points. The first is to correct practices of unfair competition by offering more payment options for consumers and cut improper linkage between its mobile and online payment platform Alipay and other financial products. The second is to break the monopoly of information. The third is to apply to become a financial holding company which will include all of its businesses in financial sectors and take them under regulation. The fourth is to strictly implement requirements of prudential supervision and revamp credit, insurance, wealth management and other financial activities. The fifth is to manage liquidity risks of major funds and proactively decrease size of its money market fund Yu'ebao.