According to incomplete statistics, between May 1, 2019 and April 30, 2020, China Securities Regulatory Commission and its agencies, major self regulatory regulatory agencies, and the central bank have issued 103 penalty tickets for securities companies and their employees, and at least 45 securities companies have been named and punished; at least 6 securities companies have been deducted more than 5 points due to regulatory penalties, and investment banking business violations are still the most severely punished areas, and internal control is not Improvement is the common reason for the punishment of branches, and the anti money laundering work still has a long way to go.
However, according to the working paper of classification and evaluation of securities companies in 2020, securities companies classified and evaluated the deduction items of securities companies, including capital adequacy, corporate governance and compliance management, comprehensive risk management, information technology management, customer rights and interests protection, information disclosure, measures taken, written self-discipline measures and disciplinary actions taken by self regulatory organizations, and others The administrative punishment and major administrative supervision measures taken by the department outside the evaluation period, as well as the criminal proceedings and civil proceedings involved, can be used as the basis for deduction of points. The sorting out of the penalty tickets is only part of the matters, and can not be generalized in a partial way. It is only for reference.
At least 6 securities companies were deducted more than 5 points
According to the reporters analysis, there are at least six securities companies with more than five points deducted, which are Huaxin securities (which has been taken over by Yongxing securities), Jinyuan securities, Debang securities, new era securities, Guorong securities and Guangfa Securities.
On November 14, 2019, China Securities Regulatory Commission (CSRC) decided to revoke all business licenses of Huaxin securities due to the risk control indicators such as net capital of Huaxin securities did not meet the requirements and did not correct within the time limit, which seriously damaged the legitimate rights and interests of customers and endangered the stable operation of the company. According to the relevant regulations on Classified Supervision of securities companies, 10 points will be deducted each time if the company is subject to administrative punishment or criminal punishment of revoking part of business license. Accordingly, Huaxin securities should be deducted at least 10 points. However, at the same time of the above punishment, China Securities Regulatory Commission set up a liquidation group to carry out trusteeship of Huaxin securities. Later, it was taken over by Ningbo state-owned assets department new securities firm Yongxing securities, and Huaxin securities no longer existed.
During the evaluation period, Jinyuan securities, Debang securities and new era securities were punished by confiscation of income and fine due to illegal investment banking business. According to relevant regulations, 6 points should be deducted each. Among them, Jinyuan securities acted as the financial consultant of Shandong yabaite backdoor Zoomlion electric, and then a major fraud case broke out. Jinyuan securities was punished with one fine and three penalties, totaling 40 million yuan, in July 2019. After Jinyuan securities proposed administrative reconsideration, it was rejected; Debang securities was once the lead underwriter of Wuyang construction bonds, but in November 2019, it was not diligent and conscientious More than 19 million yuan was fined and confiscated; as an independent financial consultant and lead underwriter of beautiful ecologys acquisition of Bada garden, new era securities failed to perform its duties diligently and was fined and confiscated a total of more than 44 million yuan in June 2019.
Due to the risk control problems in bond trading, Guorong securities was issued with administrative supervision measures in May last year, which restricted the self operation business of bonds for six months, and suspended the record of asset management products for one year. In addition, two persons in charge of Guorong securities asset management department were also punished by supervision. According to the regulations on Classified Supervision, 2.5 points will be deducted each time when the business activities are restricted for less than 6 months, and 3 points will be deducted if the activities are restricted for more than 6 months, totaling 5 points. In addition, Guorong securities, as the bond trustee of sanding holdings, failed to take effective measures to urge the issuer to fulfill the credit obligation in time, and received the regulatory warning letter, 0.5 points were deducted.
However, the most serious punishment for GF Securities is not in the 2020 classified evaluation period. On July 10, 2020, the China Securities Regulatory Commission (CSRC) announced that due to illegal behaviors in the investment banking business of Kangmei Pharmaceutical Co., Ltd., it is planned to suspend the qualification of recommendation agency for 6 months and temporarily refuse to accept the relevant documents of bond underwriting business for 12 months. Each securities company can adjust the cross year penalty according to its own situation, so it is not known in which year the penalty will be reflected in the evaluation.
It should be noted that due to the different investigation time spent on each violation, it is not ruled out that the relevant impact of some points deduction items has been reflected in the classification evaluation of the previous year, and the classification evaluation results in 2020 shall prevail.
A large number of branches and employees have always been the difficulty of compliance management, and there will inevitably be some loopholes in compliance management. According to incomplete statistics, during the evaluation period, the local securities regulatory bureaus issued 30 supervision penalties to the branches / employees of 27 securities companies.
Two business departments of Aijian securities were punished on the same day because they committed the minimum income and other illegal behaviors in the process of sales of collective asset management plan, and the asset management plan had the risk of cashing in the follow-up. On September 18, 2019, Zhejiang Securities Regulatory Bureau issued administrative supervision measures to order Aijian securities Hangzhou Fuchun Road Securities Business Department and Jiaxing Xiexi Street business department to make corrections, and interviewed the person in charge of the business department. According to the principle of halving the punishment of the branch and not repeating the punishment for the same incident, the two tickets were fined a total of 1.5 points.
Without the approval of the company, the responsible person of Humen Branch of Dongguan securities organized employees to sell private securities investment funds that were not sold on behalf of Dongguan securities to customers. On June 26, 2019, the person in charge of Humen Branch of Dongguan securities was identified as inappropriate person, or 1.25 points were deducted. In addition, during the term of office of the person in charge of securities business department of Fuzhou Shuguang Road of Jinyuan securities, there was an intermediary for financing between customers or In May 2019, he was identified as an inappropriate candidate for his convenience, absence without permission and failure to fulfill his duties.
During the evaluation period, two business departments of CITIC Securities were punished for internal control compliance problems, and the problems were quite similar. Among them, Beijing Zizhuyuan Road Securities Business Department has many problems, such as missing important information of account opening information of many customers, failing to report the position of the person in charge of the business department to Beijing Securities Regulatory Bureau as required; the problem of the business department of Wanda Plaza, Panyu, Guangzhou, which failed to timely report to the regulatory authorities on the performance of the person in charge of the business department, was ordered to correct, and 1 point was deducted in total.
The number of fines issued by supervision on employees is not small, most of them are employees of investment banks and branches. Among them, the punishment of insurance agency is often accompanied by major dereliction of duty, and the deduction items have been reflected in the punishment of institutions; and the punishment of personnel in branches sometimes affects the classification evaluation results of post holding institutions.
Anti money laundering has a long way to go
The penalty tickets of self regulatory agencies will also be deducted in the classification evaluation, mainly for anti money laundering violations. According to incomplete statistics, the central bank and dealers Association issued a total of 15 tickets, of which 14 were related to anti money laundering.
Huatai Securities was fined 10.1 million yuan by the central bank in February this year for failing to fulfill the obligations of customer identification, submitting suspicious transaction reports according to regulations, and conducting transactions with unidentified customers, which may be the largest amount of fine issued by the central bank for securities companies inadequate anti money laundering work. In addition, Cinda securities, Shenwan Hongyuan securities Ningbo and Hubei Branch, Galaxy Securities Inner Mongolia Branch, Everbright Securities Guangdong Branch, China Merchants Securities Changchun and a Lanzhou business department, etc. all received the central banks deduction points for their inadequate anti money laundering work during the evaluation period.
According to the regulations on Classified Supervision, if a securities company is subject to written self-discipline management measures taken by the self-discipline organization of the securities and futures industry, 0.25 points will be deducted each time; if the subsidiary is responsible for the violation of the self-regulation regulation rules and is directly subject to written self-discipline management measures or disciplinary sanctions, the score will be reduced by half according to the above principle. All of these penalties will be deducted from 0.125 to 0.25.
It is worth mentioning that CICC received the disciplinary measures ordered to rectify by the dealers association during the evaluation period. As the main underwriter of relevant debt financing instruments of Jingliang group, it failed to effectively monitor and disclose information on major issues such as free transfer of assets during the duration of bonds. According to relevant regulations, 0.5 points will be deducted. According to the notice issued by the regulatory authorities, the proportion of class a securities companies will rise to 50% this year. 49 of the 98 companies participating in the evaluation are expected to obtain A-class securities. It is not known whether the AA class will be expanded accordingly. According to the self-assessment manuscript, 58 securities companies can get business index bonus points this year, of which 15 securities companies can get more than 5 points (including 5 points). Huatai Securities can add 11 points, Guotai Junan can add 10.5 points, CITIC Securities, CICC and GF Securities can get 10 points. However, from the perspective of risk control indicators, service poverty alleviation, private enterprise relief and other social responsibilities, it is still the head of the securities companies with a higher probability of bonus points. Therefore, whether the deduction can be minimized is very important to the classification evaluation results. Source: Securities Times editor in charge: Yang Bin_ NF4368
According to the notice issued by the regulatory authorities, the proportion of class a securities companies will rise to 50% this year. 49 of the 98 companies participating in the evaluation are expected to obtain A-class securities. It is not known whether the AA class will be expanded accordingly. According to the self-assessment manuscript, 58 securities companies can get business index bonus points this year, of which 15 securities companies can get more than 5 points (including 5 points). Huatai Securities can add 11 points, Guotai Junan can add 10.5 points, CITIC Securities, CICC and GF Securities can get 10 points. However, from the perspective of risk control indicators, service poverty alleviation, private enterprise relief and other social responsibilities, it is still the head of the securities companies with a higher probability of bonus points. Therefore, whether the deduction can be minimized is very important to the classification evaluation results.