The People's Bank of China said Oct. 10 that it would require online financial firms to set up an internal mechanism to combat money laundering and terrorist financing as part of its efforts to clamp down on risks in the financial sector.

Under the new regulation that will take effect from Jan. 1, 2019, online financial firms need to follow know-your-customer rules to verify customers' personal information and report large and suspicious transactions in a timely manner.

The regulation came as an update to two previous risk control guidelines, released in July 2015 and April 2016, respectively, for online financial firms, the regulator said.