Beijing — China took steps to rein in the rapidly growing and lightly regulated market for online micro-lenders in the government’s latest crackdown on internet finance, sending shares of US-listed Chinese financial firms into a tailspin. A government body issued a notice to provincial governments on Tuesday, urging them to suspend approval for setting up new internet micro-lenders, sources who had seen the notice told Reuters. The multi-department body, tasked by the central government to rein in risks in the internet finance sector, also told local regulators to restrict granting of new approvals for micro-loan firms to conduct lending across regions, said the sources. Beijing started a crackdown on the internet finance sector in 2016, issuing guidelines and rules to regulate online financial activity following a spate of scandals and frauds. The clean-up has led to the creation of a top-level body comprising government entities that include the central bank and the banking regula...

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