Peer-to-peer lending platforms in China are bracing for regulations including new licensing rules as early as the end of this month. P2P lenders could be regulated as financial institutions, a new level of regulation for the industry that could push platform operators to gain licensing, the Shanghai Securities News reported on Monday. Regulators could issue detailed rules at the end of this month or early next month, the newspaper said. Industry insiders confirmed that new rules were on the horizon and that companies were preparing. Talk of a new level of oversight for P2P lending had circulated in recent days, said Wu Xianyong, the chief executive of Shenzhen Touna Financial Services, a P2P lender. Adding stronger rules to a business that doubled in size last year was not a negative signal for the industry, he said. Licensing would become a hurdle for all industry players and might weed out some of the bad seeds that had damaged the sector's reputation. "This will have a major influence," Wu said. "In the short run, licensing can lead to some difficulties for the industry. But, in the long run, P2P needs oversight in order to protect its reputation. So it would be a good move." The industry has so far avoided harsh regulation despite making major leaps in the volume of funds that retail investors have poured in. Between January and August last year, the lending balance of P2P platforms grew 90 per cent to 58 billion yuan, according to data compiled by Credit Suisse. P2P firms are allowed to act only as platforms on which individuals lend directly to other parties. However, many companies have been accused of selling products that resemble bank wealth management products or taking deposits, services that only licensed banks can provide. Last year, the Chinese media reported several cases in which P2P lenders disappeared with lenders' cash, instilling a heightened perception of risk in the largely unregulated environment. The Ministry of Public Security's economic investigations division said last week 70 platforms were under investigation in cases involving a total of 6 billion yuan.