Source: China Economic Network
China Economic Network Beijing, January 19, 2022 The website of the China Securities Regulatory Commission recently announced the decision of the Guangxi Securities Regulatory Bureau to issue a warning letter to Qin Jing [2022] No. 1.
After investigation, Qin Jing had the following problems in the course of practicing in the securities business department of Nanning Changhu Road of Shenwan Hongyuan Securities Co., Ltd. (stock code: 000166): first, from December 2019 to April 2020, there was no reasonable basis for providing securities investment advice to an investor, and no investment risk was indicated; second, in July 2020, she accepted a gift from an investor.
In accordance with Article 37 of the Measures for the Administration of the Appropriateness of Securities and Futures Investors (Order No. 130 of the CSRC), Article 18 of the Provisions on the Honest Practice of Securities and Futures Business Institutions and Their Staff (Order No. 145 of the CSRC), and Article 33 of the Interim Provisions on Securities Investment Consulting Business (CSRC Announcement [2010] No. 27), the Guangxi Securities Regulatory Bureau has decided to take regulatory measures against you by issuing a warning letter.
Relevant regulations:
Article 22 of the Measures for the Administration of the Appropriateness of Securities and Futures Investors prohibits business institutions from carrying out the following activities of selling products or providing services:
(1) Selling products or providing services to investors who do not meet the access requirements;
(b) provide investors with deterministic judgments on uncertain matters, or inform investors of opinions that may cause them to mistakenly believe to be certain;
(3) Proactively recommending products or services with a risk level higher than their risk tolerance to ordinary investors;
(4) Actively recommending products or services that do not meet their investment objectives to ordinary investors;
(5) Selling or providing products or services with a risk level higher than their risk tolerance to investors in the lowest category of risk tolerance;
(6) Other conduct that violates the requirements of appropriateness and harms the lawful rights and interests of investors.
Article 23 of the Measures for the Administration of the Appropriateness of Securities and Futures Investors: Before a business institution sells products or provides services to ordinary investors, it shall inform the following information:
(1) Matters that may directly lead to losses in the principal;
(2) Matters that may directly cause losses in excess of the original principal;
(3) Matters that may lead to losses in the principal or original principal due to changes in the business or property status of the operating institution;
(4) Important reasons affecting the judgment of customers due to changes in the business or property status of the operating institution;
(5) Restricting the period for exercising the rights of the sales target or the period within which the contract can be terminated, and all other restrictive contents;
(6) Opinions on the appropriateness of article 29 of these Measures.
Article 16 of the Interim Provisions on Securities Investment Consulting Business: Securities investment advisers shall have a reasonable basis for providing investment advice to clients. Investment advice is based on securities research reports or investment analysis opinions based on securities research reports, theoretical models and analytical methods.
Article 9 of the Provisions on the Honest Practice of Securities and Futures Business Institutions and Their Staffs: Securities and futures business institutions and their staffs shall not convey improper benefits to public officials, customers, potential customers who are in negotiations or other interested parties in the following ways when carrying out securities and futures business and related activities:
(1) Providing gifts, gifts, real estate, automobiles, negotiable securities, equity, commission returns, and other property, or providing facilities such as holding on behalf of the above conduct;
(2) Providing benefits such as travel, banquets, entertainment and fitness, and work arrangements;
(3) Arranging structured, high-yield, principal-protected wealth management products and other transactions that deviate significantly from the fair price;
(4) Directly or indirectly providing insider information, undisclosed information, trade secrets, and customer information to others, explicitly or implicitly indicating that others are engaged in relevant trading activities;
(5) Other situations where improper benefits are conveyed.
Where securities and futures business institutions and their staffs reasonably market in accordance with the internal regulations and limited standards formulated by securities and futures business institutions in accordance with law, the provisions of the preceding paragraph shall not apply.
Article 10 of the Provisions on the Honest Practice of Securities and Futures Business Institutions and Their Staff: The staff of securities and futures business institutions shall not seek improper benefits in the following ways:
(1) Directly or indirectly accepting or soliciting property or benefits from others in the form listed in Article 9;
(2) Directly or indirectly using insider information, undisclosed information, trade secrets, and customer information provided or proactively obtained by others to seek benefits;
(3) Seeking benefits by inducing customers to engage in unnecessary transactions, using customers' entrusted assets to conduct unnecessary transactions, etc.;
(4) Engaging in for-profit business activities in violation of regulations, concurrently holding positions that may affect their independence in violation of regulations, or engaging in activities that conflict with the legitimate interests of their institutions or investors;
(5) Illegally using authority to provide facilitation conditions for close relatives or other interested parties to engage in for-profit business activities;
(6) Other situations of seeking improper benefits.
Article 37 of the Measures for the Administration of the Appropriateness of Securities and Futures Investors: Where an operating institution violates the provisions of these Measures, the CSRC and its dispatched institutions may take supervision and management measures such as ordering corrections, supervising conversations, issuing warning letters, and ordering participation in training against the operating institution and its directly responsible supervisors and other directly responsible personnel.
Article 18 of the Provisions on the Honest Practice of Securities and Futures Business Institutions and Their Staff: Where securities and futures business institutions and their staff violate these Provisions, the CSRC may take administrative supervision measures such as issuing a warning letter, ordering participation in training, ordering periodic reports, ordering corrections, supervising conversations, identifying inappropriate candidates, and temporarily not accepting documents related to administrative licenses.
Article 33 of the Interim Provisions on Securities Investment Consulting Business: Where securities companies, securities investment consulting institutions and their personnel engage in securities investment consulting business and violate laws, administrative regulations and these Provisions, the CSRC and its dispatched agencies may take regulatory measures such as ordering corrections, supervising conversations, issuing warning letters, ordering an increase in the number of internal compliance inspections and submitting compliance inspection reports, ordering the liquidation of illegal business, ordering the suspension of new customers, and ordering the punishment of relevant personnel; Administrative regulations and relevant provisions are to be given administrative punishments; where a crime is suspected, it is to be transferred to the judicial organs in accordance with law.
The following is the original text:
Decision on the Measures of Issuing a Warning Letter to Qin Jing [2022] No. 1
Qin Jing:
After investigation, you have the following problems in the process of practicing in the Nanning Changhu Road Securities Business Department of Shenwan Hongyuan Securities Co., Ltd.: First, from December 2019 to April 2020, there was no reasonable basis for providing securities investment advice to an investor, and no investment risks were prompted; The second is to accept a gift from an investor in July 2020.
The above situation violates Article 22 (2) and Article 23 (1) of the Measures for the Administration of the Appropriateness of Securities and Futures Investors (Order No. 130 of the CSRC, amended in 2020), Article 16 of the Interim Provisions on Securities Investment Consulting Business (Announcement [2010] No. 27 of the CSRC, amended in 2020), Article 9, Paragraph 1, Item (1) and Article 10 of the Provisions on the Honest Practice of Securities and Futures Business Institutions and Their Staff (Order No. 145 of the CSRC).
In accordance with Article 37 of the Measures for the Administration of the Appropriateness of Securities and Futures Investors (Order No. 130 of the Csrc), Article 18 of the Provisions on the Honest Practice of Securities and Futures Business Institutions and Their Staff (Order No. 145 of the Securities Regulatory Commission), and Article 33 of the Interim Provisions on Securities Investment Consulting Business (Announcement [2010] No. 27 of the Securities Regulatory Commission), our bureau has decided to take regulatory measures against you by issuing a warning letter. You shall submit a written rectification report to our office within 30 days from the date of receipt of this decision.
If you are dissatisfied with these supervision and management measures, you may submit an application for administrative reconsideration to the CHINA SECURITIES Regulatory Commission within 60 days of receiving this decision, or you may file a lawsuit with a people's court with jurisdiction within 6 months from the date of receipt of this decision. During the period of reconsideration and litigation, the implementation of the above-mentioned supervision and management measures shall not be stopped.
Guangxi Securities Regulatory Bureau
January 13, 2022