China Fund News Sunrise
"One case double investigation", "one case deep investigation", the dealer association has shot again!
On June 5, information on the official website of the Association of Dealers showed that due to multiple problems in the issuance of debt financing tools related to Siping City Investment, the lead underwriter Everbright Securities was given a serious warning and ordered to make corrections. Two investors, Bank of Jilin and Yealink Bank, were also notified of criticism and ordered to make corrections.
From the perspective of the above, it was mainly due to the fact that the two investors collected large amounts of financial assistance from Siping City Investment and charged other fees in addition to the coupon rate, which interfered with the issuance interest rate of debt financing instruments and violated the principles of fairness, justice and openness in issuance. As the lead underwriter, Everbright Securities was clearly aware of the above conduct, and there were problems such as the issuance pricing did not follow the principle of fairness and the disclosure of underwriting methods was inaccurate.
Prior to this, Siping City Investment and the chairman of the company had been investigated by the dealer association and notified and criticized. In line with the principle of "one case and two investigations" and "one case of in-depth investigation", at the end of March this year, the Association of Dealers launched a self-discipline investigation into the above-mentioned financial institutions involved in violations in the issuance process.
Let's see the details——
Illegally collecting issuer funds to achieve expected investment returnsFirst of all, the problems existing in the two investors of Bank of Jilin and Yealink Bank are mainly due to illegal receipt of large financial assistance from issuers to achieve expected investment returns.
The Association of Dealers pointed out that Yealink Bank, as an investor in the relevant debt financing instruments of Siping Urban Development Investment Holdings Co., Ltd., received a supplementary payment from Siping City Investment in addition to the coupon rate of the debt financing instruments to achieve the expected investment returns.
Similarly, Bank of Jilin charges other fees provided by Siping City Investment in the name of "fund supervision account fee" in addition to the coupon rate of debt financing instruments to achieve the expected investment income.
The Association of Dealers pointed out that the above-mentioned related acts interfered with the interest rate of the issuance of debt financing instruments and violated the principles of fairness, impartiality and openness of the issuance.
According to the relevant self-discipline regulations of the inter-bank bond market, after deliberation at the self-regulatory sanctions meeting, the Association of Dealers notified and criticized Bank of Jilin and Yealink Bank, and ordered them to carry out comprehensive and in-depth rectification of the problems exposed in this incident.
Everbright Securities was seriously warned for the issuance and underwriting of a number of violations, and then look at the lead underwriter, Everbright Securities, which obviously has more serious problems than the two investors.
The Association of Institutional Investors pointed out that Everbright Securities, as the lead underwriter of the relevant debt financing instruments of Siping City Development Investment Holdings Co., Ltd., violated the following self-regulatory rules related to the inter-bank bond market:
First, it clearly knew and specifically participated in the operation of the two investors collecting large amounts of financial assistance from Siping City Investment, promoted the illegal issuance of relevant debt financing instruments, interfered with the issuance interest rate of debt financing instruments, and violated the principles of fairness, impartiality and openness of issuance.
Second, the information provided in the self-discipline inquiry stage is untrue, inaccurate and incomplete.
Third, the issuance pricing work did not follow the principle of fairness, and the confirmation of the bookkeeping interest rate range was not signed with the issuer.
Fourth, the disclosure of underwriting methods in the issuance plan is inaccurate.
According to the relevant self-discipline regulations of the inter-bank bond market, after deliberation by the self-regulatory action meeting, the Association of Dealers issued a serious warning to Everbright Securities and ordered it to carry out comprehensive and in-depth rectification of the problems exposed in this incident.
The issuer has been investigated first, the company + the chairman is criticized and warned
Before the lead underwriter and investor, the dealer association has first imposed self-regulatory sanctions on the issuer Siping City Investment.
Wind information shows that Siping Urban Development Investment Holdings Co., Ltd. issued two non-public directional debt financing instruments "20 Siping City Investment PPN001" and "20 Siping City Investment PPN002" in 2020, with an issuance scale of 350 million yuan and 450 million yuan respectively, a coupon rate of 7.48%, and a term of 3 years; The lead underwriters are Everbright Securities and China CITIC Bank, and the ratio of the main commitment amount between the two is 3:2.
In March this year, the Association of Dealers released information on self-regulatory sanctions, showing that Siping City Investment, as an issuer of debt financing instruments, violated three self-regulatory rules related to the inter-bank bond market:
First, for the issuance of "20 Siping City Investment PPN001" and "20 Siping City Investment PPN002", financial assistance was provided to investors, and the issuance interest rates of the two debt financing instruments did not objectively reflect their actual interest rate levels.
Second, a large proportion of the raised funds were not used according to the agreed purpose, and the announcement of the change of the purpose of the raised funds was not disclosed in advance.
Third, the information disclosure on the use of raised funds in the 2020 and 2021 annual reports is inaccurate.
Based on this, the Association of Dealers warned Siping City Investment and criticized Xu Xuefeng, its chairman, legal representative and the first person responsible for information disclosure at the time.
In line with the principle of "one case, two investigations" and "one in-depth investigation", at the end of March, the Association of Dealers launched a self-discipline investigation into four financial institutions involved in violations in the issuance process. Except for the issue of Wells Fargo Asset Management (Shanghai) Co., Ltd.'s assistance to relevant issuers to directly or indirectly subscribe for bonds issued by itself, the investigation has not yet been announced, and the lead underwriters and investors related to Siping City Investment have completed the investigation.
During the year, the Traders' Association made frequent moves
The Siping Chengtou case is just the beginning. Since entering the second quarter, the Association of Dealers has continuously launched self-discipline investigations on a number of financial institutions, including large state-owned banks and joint-stock banks, as well as small and medium-sized banks, securities firms, asset managers, etc.
On April 4, the Association of Dealers launched a self-regulatory investigation into ICBC. In its daily monitoring work, the Association of Dealers found that the issuance and pricing of multi-tranche debt financing instruments underwritten by ICBC seriously deviated from the reasonable level of the market, interfered with market order, and was suspected of violating the relevant regulations on self-discipline management of the inter-bank bond market.
On May 9, the Association of Dealers launched a self-discipline investigation into alleged irregularities in the issuance of financial bonds by the Export-Import Bank of China and suspected violations in the underwriting business of China Minsheng Bank Co., Ltd.
On May 11, the Association of Dealers launched a self-regulatory investigation into CCB. What is more special is that the self-discipline investigation is based on feedback from the regulatory authorities, and the dealer association launched a self-discipline investigation into the suspected violations of the underwriting business of debt financing instruments of CCB.
On May 31, the official website of the Association of Dealers announced that the Association of Dealers launched a self-discipline investigation on seven institutions, including Great Wall Guorui Securities, Bohai Securities, Guolian Securities, Guorong Securities and many other brokerages.
From the perspective of the reasons for violations, the Association of Dealers mainly investigates and deals with the recent violations of bond holding, bond "self-financing", and issuance pricing deviations from the market level. In the next step, the Association of Dealers will continue to strengthen the self-discipline management of transactions in the interbank market, formulate and improve relevant self-discipline rules, increase the investigation and punishment of illegal transactions, continuously purify the market environment, and maintain the normal operation order of the market.
Editor: Captain
Review: Xu Wen