Source: ARK Disrupt Issue 132: July 9, 2018. By @bhavanaARK

Earlier this year the Central Bank of China issued regulations for the financial services industry that it appended last week for mobile payment platforms. The appended regulations include the following:

Following the news, investors in Tencent and Alibaba’s ANT Financial were concerned about their loss of interest income from the float, roughly 7.5 billion yuan, or, in Tencent’s case, 2.5% of profits. While not inconsequential, the interest income these platforms derive is dwarfed by the value they create in lowering the cost of customer acquisition for their advertisers and other service providers. Indeed, by eliminating interest income from the payments platform model, the PBOC will deter marginal players from entering the market, which actually will play to the benefit of both Tencent and Alibaba.

The PBOC seems to be taking aim at capital flows into the shadow banking system. While they could slow economic growth in the short term, these regulations should weed nefarious agents from the financial services industry, adding to confidence and stability in the banking system.

View original article and other research here.


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Fred Pye

Frederick T. Pye

CHAIRMAN, CHIEF EXECUTIVE OFFICER & DIRECTOR

Frederick T. Pye is the Chairman, Chief Executive Officer and Director of 3iQ Corp. He is also the Chairman and Director of 3iQ Digital Holdings Inc. Mr. Pye is recognized for creating and promoting creative and unique investment products for the investment industry.

Mr. Pye has managed private client portfolios with Landry Investment Management and various other investment dealers. Prior to this Mr. Pye was Founder, President & Chief Executive Officer of Argentum Management and Research Corporation, a company dedicated to managing and distributing quantitative investment portfolios including the first long-short mutual fund in Canada.

He was also Senior Vice-President and National Sales Manager of Fidelity Investments Canada and an integral part of the team that saw assets rise from $80 million to over $7.5 billion in assets under management during his tenure. He also held various positions with Guardian Trust Company, which listed the first Gold, Silver and Platinum Certificates on the Montreal Exchange.

Mr. Pye obtained a Masters in Business Administration from Concordia University.