The peer-to-peer lending firms of South Korea have decided to set up their own self-regulatory body because legislation to create the governmental regulation they crave has stalled in Parliament.

P2P lending frequently relies, at least in its early stages, on the involvement of HNW investors. The setting-up of the Digital Finance Association is therefore of interest to wealth managers who handle P2P investments on behalf of their clients. The new body, which opens next month, is the brainchild of 8percent, Lendit and another unnamed P2P lending firm and might attract investment funds, also working on behalf of HNWs.

One reason for the desire for regulation is a series of scandals that has hit the P2P sector in South Korea of late, the latest involving the arrest of the head of the country's third-largest P2P lender, Roof Funding, on fraud charges. Five regulatory bills are pending in Parliament with no apparent prospect of passage at any time soon.

Over the Yellow Sea in China, a P2P site called PPMiao.com is heading for liquidation, also because of fraud allegations. Last month, angry crowds of investors surrounded the offices of HuaAn Future Asset Management Co Ltd - which owns a large stake in the venture - in Shanghai, demanding redress.