The China Securities Regulatory Commission and other regulators will formulate regulations on Internet finance to promote the sound development of the sector, a CSRC spokesman said on Friday.

The other regulators are the People's Bank of China, China Banking Regulatory Commission and China Insurance Regulatory Commission.

"We support the development of Internet finance because it can take advantage of advanced information technology to improve the quality and efficiency of financial services," said Zhang Xiaojun.

"But problems and risks have also emerged as the sector develops, showing that it should be under guidance and regulation."

Zhang said the regulations are still being drawn up.

Yi Huanhuan, deputy director at Hong Yuan Securities Research Institute, said Internet finance can help make China's financial system - including State-owned banks - more competitive and improve the availability of loans to small businesses.

"We welcome regulation of the sector, but it should not be so strict as to limit innovation," said Yi.

"Having regulations is essential because the safety of funds and accounts in Internet financial products can't be completely guaranteed," said the head of a branch of a domestic commercial bank who declined to be identified.

He said that even though regulations covering the existing banking system are mature, there are still some legal gaps.

The Internet finance sector in China is new and it needs to be regulated, the banker said.

China is looking to develop regulations aimed at online financial products that are being offered by Internet companies such as Alibaba Group Holding Ltd, Tencent Holdings Ltd and Baidu Inc.

IPO probe ends

The CSRC spokesman also said on Friday that investigations into the price-setting process for new shares has ended.

The commission has finished field investigations that targeted 13 lead underwriters and 44 institutions that served as book builders for recent initial public offerings.

"We will release the results of the investigations after an overall assessment," added Zhang.

The "random inspections" came amid China's resumption of IPOs after a suspension that lasted about one year.

Since the end of last year, 45 companies have gone public on the A-share market, raising 30.1 billion yuan ($4.96 billion).

Dai Tian contributed to this story.

caixiao@chinadaily.com.cn

(China Daily USA 02/17/2014 page15)