The surprise, eleventh-hour suspension by China's regulators of Ant Financial's US$34 billion (S$46 billion) initial public offering (IPO) and dual listing in Shanghai and Hong Kong, which was to take place yesterday, was an extraordinary development that sent shock waves through the international financial community. While the precise reasons for the suspension of what would have been history's biggest stock market debut are still vague, the Shanghai Stock Exchange said in a statement that major issues were involved, including changes in the financial technology regulatory environment, which may cause Ant to be unable to meet issuance and listing conditions or information disclosure requirements.

The statement followed a meeting between Ant's top management and China's central bank as well as its banking regulators. In hindsight, the timing of Ant's IPO, which attracted record orders, was far from perfect. Over recent months, China's regulators have been tightening controls over online lenders, such as by raising capital requirements and capping loan rates. As recently as Monday, China's banking watchdog released draft rules that would force online lenders to hold a larger share of the loans they offer together with banks on their own balance sheets. Up to now, these lenders acted as intermediaries, leaving banks to bear the risk. There has also been a flurry of recent opinion pieces in Chinese official publications highlighting the fact that fintechs and banks do not operate on a level playing field.