Off site capital allocation is not only prohibited, but also diversion of third-party platforms in the name of rating

 Off site capital allocation is not only prohibited, but also diversion of third-party platforms in the name of rating

So called rating websites emerge

The reporter found that among the 28 normal operating off-site funding platforms shown on the website, most of them are new platforms launched since the second half of 2019. After comparing with the 258 over-the-counter capital allocation platforms announced by the CSRC in July, five of them have appeared in the blacklist of the CSRC, and the entity operating company behind the OTC capital allocation platform has also appeared in the blacklist.

When the reporter called the entity operating company, which appeared in the blacklist of off-site capital allocation companies, market personnel said: this should be a misunderstanding, because the name of the funding platform is another funding company, but the name of the operating organization behind it has written our company.

When the reporter asked whether the company might be subject to regulatory investigation and punishment, resulting in the loss of investors principal, the market personnel said: judging from the off-site capital allocation platform recently investigated by the regulatory authorities, it is mainly virtual disk, or the use of capital allocation funds to manipulate the market, and there is also allowing customers to take delivery of goods, that is, killing pigs . The company only operates capital allocation, and does not involve these illegal activities Behavior.

In fact, no matter whether other illegal activities are involved or not, without the approval of the CSRC, any institution or individual engaging in over-the-counter capital allocation constitutes illegal securities business activities, which is an illegal act. According to the relevant provisions of the new securities law, securities margin trading is the exclusive business of securities companies. Without approval, no unit or individual is allowed to operate.

Obviously, the above-mentioned staff know that the company is operating an illegal off-site allocation, but it is still soliciting customers. Among the 258 off-site capital allocation platforms exposed by the CSRC, although most of the website links have failed, there are still institutions in normal operation.

In addition, according to the reporters further search, in addition to the capital allocation headlines, there are many similar third-party rating platforms for off-site capital allocation, such as capital allocation scheduling network, capital allocation index, capital allocation 114, capital allocation 168, etc. The common feature of these websites is that they not only prompt the platforms of running away, cheating and problems, but also guide the identified normal platforms and provide website link entrance.

Zhu Yiyi, a lawyer of Guohao (Shanghai) law firm, told Securities Daily that many over-the-counter capital allocation platforms are underground platforms, which are difficult for regulators to find out. Moreover, the high leverage ratio of over-the-counter capital allocation enlarges the potential income and risk of investors, and profit-seeking investors flock to it. Such a third-party rating platform is easy to mislead investors and disrupt the market order.

SFC during the year

In addition, the reporter found that since this year, in the administrative punishment decision issued by the CSRC, the use of off-site capital allocation accounts has been involved in a number of cases such as market manipulation and insider trading. For example, according to a decision on administrative punishment for market manipulation disclosed by the CSRC recently, Wu, the then actual controller and chairman of a listed company in Hubei Province, used the capital allocation account when he manipulated the companys shares.

According to the administrative penalty decision, from August 5, 2014 to June 25, 2015, in addition to the account controlled by his real name, Wu borrowed 12 trust product accounts, 33 Homs sub accounts, 2 natural person accounts and 1 institutional account (capital allocation account). He first bought stocks to build a position, then released favorable information to cooperate with secondary market transactions to drive up the share price, and then sold it with a profit of 85.3219 million yuan. Finally, Wu was fined 513 million yuan by China Securities Regulatory Commission, and was banned from entering the market for life.

The over the counter capital allocation does involve market manipulation and other capital market violations, violations of laws, dishonesty and even criminal chaos. Moreover, the funds of some capital allocation institutions are not entirely their own funds, but through various channels, including trust, limited partnership private equity funds, and even private lending, it is easy to induce huge financial risks. Liu Junhai, a law professor at Renmin University of China, told Securities Daily that in the future, the supervision of over-the-counter capital allocation should be strictly banned, strictly prohibited and targeted at illegal platforms.

According to the reporters of Securities Daily, since September, the CSRC deployed special rectification actions to crack down on black mouth of the stock market, illegal recommendation of stocks, over-the-counter capital allocation and related black groups and black app, the securities regulatory bureaus of Hebei, Shenzhen, Qinghai, Xiamen and Xinjiang have carried out relevant actions to crack down on over-the-counter capital allocation.

Starting from four aspects

Targeted attack on off-site capital allocation

The regulatory authorities should make good use of Internet technology such as big data, cloud computing and blockchain to accurately lock in and crack down on the parties involved in off-site capital allocation. Liu Junhai further explained that the main problem of off-site capital allocation lies in the capital supply side. It is very important to grasp its capital chain and information flow. If necessary, we can follow suit, pull out radishes and bring mud, crack down on some major cases such as market manipulation, and expand regulatory results. Of course, this requires the CSRC and other relevant departments, including the CBRC, the public security organs and the market supervision departments, to create a seamless and resonant regulatory cooperation mechanism.

Zhu Yiyi believes that the real fight against off-site capital allocation requires the cooperation of various departments. First of all, we should strengthen the supervision of the Securities Regulatory Commission on the over-the-counter capital allocation, and bring the supervision of the off-site capital allocation platform into the scope of normal supervision. By bringing the over-the-counter capital allocation into the unified supervision scope of the state on the securities market credit transactions, the transparency and financial stability of the financial market are maintained.

Secondly, we should unite with the industrial and commercial departments to crack down on the off-site capital allocation from the source, standardize the relevant business platforms, timely publish the list of off-site capital allocation platforms and operating agencies, and investigate and ban them.

Thirdly, we should do a good job in the education of investors. Considering that many over-the-counter capital allocation platforms are underground platforms, it may be difficult for the regulatory authorities to find out, or once found, the losses of investors have already occurred. Therefore, in strengthening the normalized supervision of off-site capital allocation platforms, we should also give full play to the strength of the masses and increase the amount of rewards for informants.

Finally, the minutes of the national court civil and commercial trial work conference (hereinafter referred to as the minutes) made it clear that the off-site capital allocation contract was invalid. Through the effective joint efforts of the guiding principles of the minutes and the administrative supervision function of the CSRC, the off-site capital allocation business can be investigated and dealt with, so as to avoid blindly expanding the scale of credit transactions in the capital market, impacting the trading order of the capital market and damaging the trading order of the capital market Harm the rights and interests of investors.