However, many market participants also pointed out that the implementation effect of appropriate management is not satisfactory and has not yet reached expectations. In the future, the effectiveness of investor rights protection also needs to be strengthened by improving the legislative system and implementing the main responsibility. It is worth noting that the establishment of the science creation board and the pilot registration system provides a rare opportunity to further deepen the appropriate management in the reform and innovation.
Improving the effect of implementation
The system is basically perfect, but the effect of execution needs to be improved. This is the current situation that we are facing in the proper management of capital market.
Appropriateness management is an exotic product. Especially after the 2008 financial crisis, major markets around the world gradually introduced this system when they were deeply reflecting on how to coordinate financial product innovation and financial regulation. Appropriateness management was first mentioned in Chinas securities industry in the Regulations on the Supervision and Administration of Securities Companies issued in 2008. Subsequently, when GEM was launched in 2009 and stock index futures and margin trading were launched in 2010, investor appropriateness management requirements were also introduced.
In 2012, China Securities Association issued the Guidelines on Investor Appropriateness System for Securities Companies, which is the earliest self-regulatory regulation for investor appropriateness management in the securities industry. In July 2017, the SFC Appropriateness Management Measures for Securities and Futures Investors and the Associations Guidelines for the Implementation of Appropriateness Management for Securities Operating Institutions Investors (Trial Implementation) were formally implemented, which further clarified the unified and clear requirements of appropriateness supervision at the level of departmental regulations. At the same time, it opens a new stage of investor appropriateness management in Chinas securities industry. Until 2019, in the reform of setting up the technology innovation board and pilot registration system, the investor appropriateness management system has also been explained and arranged in a special chapter.
Zhang Jihua said that appropriate management is the basic work to protect investors. Its essence is to match the two by product classification and investor stratification. Implementing investor appropriateness management can objectively guide investors to establish correct investment concepts and realize the protection of investors; it can also help securities business institutions restrain their short-term interest impulse, reduce the gap between investors in information acquisition and risk identification, and enhance investorsself-protection awareness and risk prevention. Fan Capability.
In the past two years, with the gradual improvement of the appropriateness management system, a series of measures for investor appropriateness management, such as investor classification, risk tolerance assessment, product risk grade and Appropriateness matching, have been fully implemented in various businesses of securities companies. But at the same time, there are some growing pains in the appropriate management, and the effect and function of the system still need to be further improved.
The implementation effect of the appropriateness system has not yet reached expectations. The accuracy and authority of product and investor classification need to be further improved. The supervision of the appropriateness of financial products needs to be strengthened. At the same time, the civil liability for violation of investor appropriateness management is not clear at present. Gong Haibin, general manager and vice chairman of China Securities Investor Protection Fund Corporation, concluded.
Gong Haibin said that in some cases, it can not be seen that the implementation effect of the investor appropriateness system in China needs to be further improved, and the management level of business institutions needs to be improved. For example, some business institutions fail to fully fulfill the obligation to explain products or services to investors, or fail to assess the classification and identification of investors in a proper way, or fail to fulfill the obligation of appropriateness by third-party affiliates; ultimately, these will lead to investorsrisk tolerance and financial products they buy. Or there is a mismatch between services, which leads to disputes.
In addition, the accuracy and authority of product and investor classification need to be further improved. Gong Haibin, for example, said that although public fund managers have risk assessment links in the process of selling fund products or services, the form of risk assessment is single, mainly based on subjective questionnaire survey, and the dimensions of topic setting and question-asking methods are not rich enough. In the current situation that the important information such as investorsincome, financial assets, liabilities, investment experience and investment behavior can not be verified, it will not be able to verify the information submitted by investors. Therefore, there may be some deviations in the evaluation of investors risk tolerance.
The problems exposed in the implementation of appropriate management also include management synergy and the assignment of civil responsibility.
Gong Haibin said that the agency has important appropriate management responsibilities, but the reality is that due to the large number of agencies, they are often supervised by different subjects, and regulatory requirements are not uniform. The integration and coordination of financial product appropriateness management and supervision also need to be strengthened urgently. In addition, Chinas law lacks clear provisions on what kind of civil liability should be assumed for violating the investors obligation of appropriateness. Lack of a clear basis for attribution is not conducive to the unification of judicial standards, but also to the effective realization of investor protection. As for the determination standard of civil liability for violation of investor appropriateness management, judicial organs need to clarify and unify it through a series of typical cases or judicial interpretations.
Make good use of two grasps
In the first half of this year, the three reviews of the draft revision of the Securities Law for public consultation included the appropriate management in Chapter VI, Investor Protection. Yan Qingmin, vice chairman of the Securities Regulatory Commission, stressed at the 2nd Small and Medium-sized Investor Service Forum recently that efforts to strengthen the supply of rule of law and increase compensation are prerequisites for protecting the legitimate rights and interests of investors. To this end, the SFC is currently vigorously promoting the drafting of securities law and related laws and regulations, which will increase the cost of capital market violations, and further strengthen the crackdown on Securities and futures violations.
In fact, as soon as possible to improve the legal system of investor protection and appropriate management has become the consensus of the market.
Zhang Jihua said that more market forces are needed to further improve the management system of investor appropriateness and strengthen the protection of investorslegitimate rights and interests. The first measures are to improve the legislative system of investor protection, speed up the revision of relevant laws and regulations, enhance the system status of investor proper management, improve the legal system of capital market, strengthen the investigation of legal responsibility, and intensify the crackdown on violations of laws and regulations.
The core of appropriateness management is sellersdue diligence and buyers self-responsibility. Among them, investors choose suitable investment varieties according to the sufficient information and their risk tolerance, which is buyers conceit. Securities business institutions need to fully understand the situation of investors and products, according to the risk tolerance of investors and different risk levels of product services, to provide investors with. Whether it is suitable to obtain a service or buy a product is appropriate, so as to achieve sellers due diligence.
Zhang Jihua said that proper management of investors is the obligation and responsibility of securities companies. Securities companies should strictly abide by the requirements of investor appropriateness management, improve the construction of appropriateness management system, promote the reform of work mode, prevent the appropriateness management from becoming formalized, accelerate the application of financial science and technology, and innovate the appropriateness management tools and methods.
Recently, a Court precedent was issued, in the case of audio-visual recording and other processes, the court ultimately still sentenced a financial institution to full responsibility. This sounds an alarm to the whole industry to reassess whether the risk assessment is really adequate. Relevant supervisors of the Securities Regulatory Commission emphasized in the convincing forum that the core foothold of appropriate management is risk disclosure; fully implementing risk disclosure means not only having a risk disclosure book and making audio and video recordings, but also recognizing the asymmetry of information and financial knowledge between securities operators and investors. Sex, strengthen investorsrisk awareness ability, make up for their shortcomings.
The person in charge also said that market appropriateness management has become more mature and perfect in the past two years, and some institutions have also innovated appropriate management measures, such as embedding the content of investor education into risk assessment and putting the process of investing in front of it; some institutions have built dynamic investor evaluation database by means of big data. However, it is worth noting that at present, the relevant risk disclosure judicial safeguard regulations have been issued one after another, and the obligation boundaries of securities business institutions will be more clear and the liability requirements will be more stringent in the future.
Seize the Opportunity of Reform
The establishment of Kechuang board provides an opportunity for the protection of investorsrights and interests. With appropriate management as the focus, improving the investor protection mechanism of science and technology innovation board not only welcomes rare opportunities, but also faces higher challenges.
Qian Bo, deputy general manager of Shanghai Stock Exchange, said that in the special regulations on stock trading of Cosco Stock Exchange, special chapters were opened to clarify and regulate the appropriate management; the relevant requirements took into account the characteristics of Cosco Enterprises, such as new business model, fast technology iteration, relatively large performance fluctuations and operational risks, and also took into account domestic investors. Structural and behavioral characteristics should be strictly promoted and implemented.
At the same time of deepening the promotion, the appropriate management of science and technology innovation board also encounters new problems. At present, the CSRC 12386 hotline receives a large number of advisory telephone calls on investors of KSG, indicating that the appropriate management of KSG and propaganda of specific standards and investor education are still insufficient. Gong Haibin cited as an example, in investor consultation, whether new shares in the securities account can be included in the determination of assets with trading authority, how to judge whether individual investors meet the trading authority of the creation board of various disciplines, and whether funds with trading authority of the establishment of disciplines can use the accumulated assets of multiple securities accounts. Wait a minute.
In addition to the lack of investor education, Gong Haibin also said that Kechuangbao has established appropriate management system, but the dynamic evaluation and adjustment still need to be refined; the criteria for investor asset identification also need to be further clarified, such as whether the assets of investors in other securities companiesshareholder accounts are included in the statistics, etc. Its not clear yet. In addition, the appropriateness system of financing and margin trading business of Kechuang board also needs to be improved. More investors believe that the appropriate conditions for the integration should be stricter in order to fully protect the rights and interests of investors. However, while strengthening the management of appropriateness, Gonghaibin specifically proposed that the need to balance and take into account market liquidity should not be ignored. Too strict appropriateness requirements may lead to a lack of market liquidity, which will eventually deprive Kechuang of the significance of solving the financing shortcomings of growth-oriented technological innovation enterprises and deepening the transformation of the economy. Investor appropriateness management can not be strengthened by simply raising the threshold, but also needs a series of supporting systems to be supplemented and improved. Source: First Financial Responsibility Editor: Li Zhaoyuan_B7890
In addition to the lack of investor education, Gong Haibin also said that Kechuangbao has established appropriate management system, but the dynamic evaluation and adjustment still need to be refined; the criteria for investor asset identification also need to be further clarified, such as whether the assets of investors in other securities companiesshareholder accounts are included in the statistics, etc. Its not clear yet. In addition, the appropriateness system of financing and margin trading business of Kechuang board also needs to be improved. More investors believe that the appropriate conditions for the integration should be stricter in order to fully protect the rights and interests of investors.
However, while strengthening the management of appropriateness, Gonghaibin specifically proposed that the need to balance and take into account market liquidity should not be ignored. Too strict appropriateness requirements may lead to a lack of market liquidity, which will eventually deprive Kechuang of the significance of solving the financing shortcomings of growth-oriented technological innovation enterprises and deepening the transformation of the economy. Investor appropriateness management can not be strengthened by simply raising the threshold, but also needs a series of supporting systems to be supplemented and improved.