China Exchanges Ban Cosmetic Surgery Loans in Debt Securities
(Bloomberg) -- Chinese regulators have barred cosmetic surgery loans from structured debt products, a warning shot for the country’s big -- and controversial -- plastic surgery industry.
The Shanghai and Shenzhen stock exchanges banned consumer debt linked to cosmetic procedures from asset-backed securities traded on the exchanges, according to a person with knowledge of the matter. The rule applies to new issues and won’t take effect retroactively, said the person, who declined to be identified discussing non-public information. The move was first reported by Jiemian.
China’s booming cosmetic surgery industry joins a growing number of sectors under scrutiny in a wide-ranging crackdown aimed at reining in what the government sees as societal excess. The medical aesthetics industry tripled in value to 177 billion yuan ($27.3 billion) from 2015 to 2019, according to a report from Deloitte China. Many of the clients are young people in lower-tier cities, enabled by apps that help prospective customers see how a modification might look, find surgeons or clinics, and finance the procedure.
The government has had the industry in its sights for a while, in particular, the estimated 60,000 clinics and 150,000 doctors who were operating without official license as of 2017, according to Daxue Consulting.
Two months ago, the National Health Commission and several other government departments announced plans for a crackdown on illegal cosmetic surgery services this year, and the National Internet Finance Association of China issued a notice prohibiting financial institutions from cooperating with illegal cosmetic surgery institutions.
Spokespersons from the Shanghai and Shenzhen stock exchanges didn’t immediately respond to e-mailed requests for comment.
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