Brokerage fund early participation | The latest rating of the financial advisory business of securities firms: 5 companies rated A, 3 fewer than the previous year, and Compass spent 110 million yuan to bid for 34% equity of Pioneer Fund

Every reporter: Peng Shuiping Every editor: Peng Shuiping

Tuesday, December 26, 2023 |

NO.1 The latest rating of the financial advisory business of brokerages: 5 A, 3 fewer than the previous year

On December 25, the annual financial advisory business rating of securities companies was officially released. According to the China Securities Association, in 2023, a total of 41 securities firms will be rated as financial advisors, including 5 in Class A, 28 in Class B, and 8 in Class C. The overall number of participants increased by 2 compared with 39 in 2022, but the number of Class A decreased by 3, the number of Class B brokerages increased, and the number of Class C remained unchanged. Guotai Junan, CICC, Zhongtai Securities, China Securities Construction Investment and CITIC Securities were awarded Class A. The ratings of 4 brokerages have been downgraded, Dongxing Securities, Guojin Securities, and Zhongde Securities have been adjusted from Class A to Class B, and Tianfeng Securities has been adjusted from Class B to Class C. In addition, the evaluation of 4 brokerages has improved. Hualong Securities, China Merchants Securities, Zhongtai Securities, and Bank of China Securities have all achieved rating upgrades, Zhongtai Securities has been upgraded from Class B to Class A, and the other three brokerages have been upgraded from Class C to Class B.

Comments: The latest rating results of the financial advisory business of securities firms reflect the adaptation and changes of securities firms to the corresponding new rating regulations, especially the degree of deduction points in compliance. This requires securities firms to continuously improve their internal control and risk control mechanisms when carrying out financial advisory business. The excellent performance of Class A brokers shows their high level and professional ability in terms of project quality, business scale, business management, etc., while on the other hand, Class C brokerages may have certain problems and risks in terms of compliance and integrity.

NO.2 Compass spent 110 million yuan to bid for 34.2076% equity of Pioneer Fund

On the evening of December 25, Compass announced that on the morning of the same day, the company bid for 34.2076% of the equity of the Pioneer Fund held by United Venture Group Co., Ltd. for 110.2116 million yuan through the Taobao judicial auction network platform of the Intermediate People's Court of Taizhou City, Jiangsu Province. Before participating in the judicial auction, Compass had acquired 4.99% of the equity of Pioneer Fund held by Fuhai (Xiamen) Enterprise Management Co., Ltd., and had completed the industrial and commercial change registration of the equity. Therefore, after the successful bidding, Compass intends to become the single largest shareholder of Vanguard Fund. However, Compass also pointed out in the announcement that the equity change still needs to be approved by the China Securities Regulatory Commission, and there is a certain degree of uncertainty.

Comments: This event shows the activity and competitiveness of Compass in the capital market. By participating in the judicial auction and acquiring a 34.2076% stake in Vanguard Fund, Compass not only strengthened its capital strength and influence, but also opened up a new investment area for itself - private equity investment. This will help Compass expand its reach and increase its revenue streams.

NO.3 The first Dow Jones ETF was launched, and the scale of cross-border ETFs has increased by 80% year-on-year during the year.

Cross-border ETFs are welcome again. On December 25, Penghua Dow Jones Industrial Average ETF was officially launched, becoming the first ETF in China to track the Dow Jones Industrial Average. In addition to the Dow Jones ETF, the cross-border ETF market was hot during the year. According to the data, as of December 25, there were 107 cross-border ETFs in the whole market, of which 28 products were new products established since 2023, and as of the end of the third quarter, the scale of cross-border ETFs increased by more than 80% year-on-year. Some industry insiders said that the launch of the Dow Jones ETF provides investors with a new channel to invest in the U.S. stock market, and the issuance of such products will also help promote the opening up of the domestic capital market and promote the development of cross-border investment. (Beijing Business Daily)

Comments: The launch of the first Dow Jones ETF shows that the domestic cross-border ETF market is developing rapidly and innovating. The Dow Jones Industrial Average is one of the most important stock indices in the United States, reflecting the overall performance and industry distribution of the U.S. economy. ETFs that track the index can make it easier for investors to participate in the volatility and opportunities of the U.S. stock market. At the same time, this also reflects the determination and ability of the domestic capital market to open up to the outside world and independent innovation.

NO.4 APP mandatory, frequent, excessive request for permissions, Jianghai Securities was warned

On December 25, the Heilongjiang Securities Regulatory Bureau took regulatory measures against Jianghai Securities with a warning letter. According to the Heilongjiang Securities Regulatory Bureau, Jianghai Securities has two major problems: one is that the internal decision-making and implementation mechanism of IT governance and network security management are not sound, and the other is that the company's APP personal information protection compliance detection is insufficient, and there are problems of mandatory, frequent and excessive request for permissions by APP. On November 30, the Ministry of Industry and Information Technology announced on the website of the Ministry of Industry and Information Technology the "APP (SDK) Notice on Infringement of User Rights and Interests (8th Batch in 2023, 34th Batch in Total)" shows that a total of 22 APPs and SDKs were found to infringe on the rights and interests of users, including Jianghai Securities APP "Jianghai Jinlong Comprehensive Version", the application source is Baidu Mobile Assistant, version V9.00.44, and the problems involved are APP mandatory, frequent, and excessive requests for permissions.

Comments: This regulatory notification incident has exposed the vulnerabilities and risks of Jianghai Securities in IT governance and network security. As a company providing financial services, it should strictly comply with relevant laws, regulations and standards when handling users' personal information, and detect and repair possible vulnerabilities and risks in a timely manner. Otherwise, it will not only damage the legitimate rights and interests and trust of users, but also affect the company's own reputation and image.

NO.5 GAC Group, Bank of China Asset Management and other private equity funds were established, with a capital contribution of 10 billion

Recently, Guangzhou Xinqi Zhilian Equity Investment Fund Partnership (Limited Partnership) was established, with the executive partners of Bank of China Asset Fund Management Co., Ltd. and Guangzhou Yingpeng Private Equity Fund Management Co., Ltd., with a capital contribution of 10 billion yuan, and its business scope is to engage in equity investment, investment management, asset management and other activities with private equity funds. The equity panorama penetration chart shows that the company is jointly funded by Guangzhou Automobile Group and its subsidiary Guangzhou Yingpeng Private Equity Fund Management Co., Ltd., Guangzhou Industrial Investment New Energy Special Fund of Funds Partnership (Limited Partnership), Bank of China Financial Assets Investment Co., Ltd., and Bank of China Asset Fund Management Co., Ltd.

Comments: The establishment of a private equity fund in partnership with Bank of China Asset Management reflects GAC Group's strategic layout and investment in the field of intelligent networked new energy vehicles. The private equity fund contributed as much as 10 billion yuan, which also shows the strong background strength of the shareholders, as well as the rich and professional fundraising and fund management capabilities of fund managers such as Bank of China Asset Management. It is hoped that the fund can help GAC Group achieve its long-term strategic goals and create more value and income.

National Business Daily