This is the 8th standard bond that individuals have bought mainly to buy urban investment bonds, and it is also the 53rd time that individuals have bought urban investment bonds.
This time, it is mainly invested in urban investment bonds in the Shandong region, which will be clear in the investment ratio of the contract, as shown in the following figure:
Some readers have doubts and are worried about moral hazard, that is, the risk of not following the contract.
Like the standard bond asset management contract I bought, it will be clearly required to mainly invest in the bonds issued by the state-owned urban investment platform (local government financing platform) in the designated area, which is also the requirement of our investors, we recognize the listed urban investment bonds, and the standard bond asset management is only one of the tools to buy listed urban investment bonds.
Because the first two bought two-year products, this time it is a one-year product.
The advantages and disadvantages of each standard debt are similar, so today's article focuses on what will be the consequences of defaulting on the matter.
The standard debt asset management contract is generally very long, seventy or eighty pages at every turn, most of which are formatted nonsense, because it is to be filed with the China Securities Investment Fund Industry Association, so the main content of the contract must be formulated in accordance with the requirements of supervision.
The main thing in the standard debt asset management contract is to see the direction of the product, and what to buy in the end, as shown in the following figure. It is mainly used to buy urban investment bonds in designated areas.
And the contract will be clear investment restrictions, such as:
The proportion of total assets to net assets shall not exceed 200%, in fact, the futures license as a manager is generally controlled within 120%, and different financial licenses do different proportion restrictions, with special provisions. The plan shall not invest in unlisted equity, unlisted creditor's rights, entrusted loans, etc., and the proportion of investment in a single asset shall not exceed 25%, except for treasury bonds and cash assets.
There are also restrictive clauses that include not investing in inferior asset-backed securities, not investing in private equity funds, not investing in trust plans, other asset management products and their right to income, etc.
Simply put, the contract will clearly stipulate which can be invested, which cannot be invested, and which are the main investments.
Then the securities company or bank that does the fund custody will judge whether the instructions issued by the manager comply with the contract according to the content of the standard debt asset management contract, and if the instructions issued are inconsistent with the contract, the custodian will refuse to execute.
The contract is as follows:
Usually, there are no more than three situations
One is that the administrator must issue instructions in accordance with the content of the contract, and the custodian executes normally, which is a very high probability event, and generally this is the end.
The other is: the administrator issues an instruction that is inconsistent with the content of the contract or is illegal, and if the transaction has not yet taken effect, the custodian suspends the execution of the instruction and notifies you that the manager will proofread and correct it in a timely manner;
The third is: the manager issues an instruction that is inconsistent with the content of the contract or is illegal, and the transaction has been effectively executed, the custodian notifies the manager to correct it within 10 working days, and the custodian also has to report to the regulatory authority, which is actually the custodian reporting to the local securities regulatory bureau that your manager has violated the law. Moreover, because the manager's responsibility for the loss caused to the entrusted assets in violation of the contract also needs to be borne by the manager.
After reading all three possibilities, if you are a formal financial license manager, how do you say you will choose?
According to the content of the contract, the product is lost, anyway, according to the content of the contract, the needs of investors to buy the agreed assets, and it is a net worth type, this loss everyone has nothing to say, the management fee is collected, the manager has no risk and no responsibility.
If it is not done according to the content of the contract, there are two endings.
One is that the product makes money, reaching or even exceeding the benchmark performance. The custodian reports your violation directly to the local securities regulatory bureau, eats the ticket himself, and loses his credit.
The other is that the product is in a complete loss and cannot reach the benchmark performance, at this time, not only the custodian reports his violations to the SECURITIES Regulatory Bureau, eats fines, and hurts the credit, but also the manager also has to bear the losses caused by the product because of the failure to do things according to the contract.
If you are a manager with a formal financial license, do you say that you will choose whether to do things according to the content of the contract or not to do things according to the contract?
People and institutions are all interested in avoiding harm, so in history, it is almost rare to hear standardized products made by formal financial license-holding institutions, and cases of moral hazard, even if there are, are estimated to be rare.
The main reason for the problem of online loans in the past is that there is no way to find a bank to do fund custody, because the loan project is too small, and the cost of the custodian to review the authenticity of the project and the use of funds is too high, so it can only be a fund depository, and the bank fund depository can only play the role of isolating funds, and cannot play a role in reviewing the authenticity, qualification and use of funds of the loan project. The custody of funds in the standard bond asset management is not the same, because the manager can only buy the listed urban investment bonds on the Shanghai Stock Exchange, and the authenticity, project qualification and use of funds of the urban investment bonds have been reviewed countless times by the Shanghai Stock Exchange, rating parties, securities underwriters and other parties before it is listed, and then it can be listed and traded.
They all do things according to the agreed content, earn money and share it together, and bear the risks they should bear together when they lose, which is called investment.
The cost of defaulting on bonds is high, and the cost of defaulting is also very high.
I am Big Buddha, a licensed financial planner, with a fund qualification certificate, securities qualification, the author of the book "Investment and Wealth Management: Financial Thinking and Asset Portfolio Allocation Strategy", a financial columnist.