Wu Qing, the "butcher of the brokerage", returned to the China Securities Regulatory Commission, and China Merchants Securities 63 "internal ghosts" were fined
The new official took office with "three fires".
Author | Gao Yan
Editor丨Gao Yuanshan
Source | Bronco Finance
Wu Qing, who was once praised by the media as the "butcher of the brokerage", succeeded Yi Huiman and became the chairman of the China Securities Regulatory Commission.
Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission
Wu Qing's "new official" took office, and the "head fire" burned to the brokerage
On February 8, the second day after taking office, he attacked two brokerages that violated bond regulations. Shenwan Hongyuan Securities Co., Ltd. (hereinafter referred to as "Shenwan Hongyuan") and Ping An Securities Co., Ltd. (hereinafter referred to as "Ping An Securities") were one ordered to make corrections, and the other received a warning letter.
Unexpectedly, the fines of Shenwan Hongyuan Securities and Ping An Securities were just "appetizers", and on the third day of Wu Qing's tenure, on February 9, he issued a fine to the "ghosts" of China Merchants Securities. The China Securities Regulatory Commission (CSRC) concentrated on the illegal trading of stocks by a number of relevant personnel of China Merchants Securities, and imposed administrative penalties on 63 people, with a total fine of 81.73 million yuan.
Among them, 1 person was transferred to the judicial authorities on suspicion of insider trading, 1 person was banned from the stock market for life, 46 people were placed under administrative supervision, of which 3 people were to be identified as unsuitable persons, 5 people were given regulatory talks, and 38 people were issued warning letters; in addition, administrative supervision measures were taken against Huo Da, chairman of the company, and 2 then compliance directors Zhao Bin and Hu Yu were given administrative supervision measures; and China Merchants Securities, which was responsible for the management of employees, was ordered to increase the number of compliance inspections. It also urged China Merchants Securities to initiate internal accountability, interview relevant violators, and implement full coverage of accountability. The China Securities Regulatory Commission emphasized that it is necessary to rely on criminal accountability, administrative punishment, administrative supervision measures, and internal accountability to carry out three-dimensional punishment on China Merchants Securities.
Source: Screenshot of the announcement of the Securities Regulatory Commission
On the same day, the Shenzhen Securities Regulatory Bureau also issued the "Decision on Administrative Supervision Measures" and "Decision on Ordering China Merchants Securities to Increase the Number of Internal Compliance Inspections" for China Merchants Securities, mentioning that: after investigation, (mainly before 2021) many employees of China Merchants Securities had borrowed other people's securities accounts to trade stocks for a long time, privately accepted customer entrustment to trade stocks, and entrusted others to speculate in stocks.
The Shenzhen Securities Regulatory Bureau clearly determined that Huo Da, as the chairman of China Merchants Securities, was responsible for the management of the above issues, Zhao Bin, as the then compliance director of China Merchants Securities, and Hu Yu, as the current compliance director, were responsible for the relevant violations.
The regulator mentioned that China Merchants Securities mainly has the following problems in the management of employees' behaviors: (1) insufficient attention and accountability to employees' stock trading behaviors; (2) insufficient monitoring and management of employees' behavior; and (3) insufficient construction of supporting information technology systems. Reflecting the inadequate compliance and internal control management of China Merchants Securities, the Shenzhen Securities Regulatory Bureau has decided to conduct an internal compliance inspection of China Merchants Securities on a quarterly basis from January 2024 to December 2024 and submit a compliance inspection report to the Shenzhen Securities Regulatory Bureau.
China Merchants Securities issued an announcement on February 9 in response, saying that the personal investment behavior of the relevant employees not only violated the provisions of the Securities Law that employees are not allowed to buy and sell stocks in violation of regulations, but also broke through the bottom line of the company's management system for employees' personal investment behavior. China Merchants Securities actively cooperated with the regulatory authorities during the investigation, expressed firm support for the above-mentioned penalty decision, and will seriously hold the employees involved accountable.
Source: Canned Gallery
In the past two years since the occurrence of violations of laws and regulations, China Merchants Securities stated that it has adopted a series of strict management measures with a "zero tolerance" attitude to address the "stubborn disease" of employees' illegal stock trading:
First, the alarm bell rings for a long time. At the annual meeting of the company and other internal meetings, the illegal trading of stocks is taken as the focus of warning, the study of the company's directors, supervisors and senior executives is organized, the propaganda and education of key departments and posts are intensified, and the observance of rules and disciplines is regarded as a mandatory part of the pre-appointment talks of newly promoted cadres.
The second is to improve the system. The "China Merchants Securities Practitioners Securities Investment Behavior Management System" has been revised to refine the illegal securities trading behaviors so that employees can better understand the boundaries and red lines of laws and regulations, clarify the responsibilities of employees, the supervision responsibilities of the internal control department, and the management responsibilities of their departments, and transmit pressure at all levels, and refine the five types of accountability situations, and terminate the labor contracts of employees who engage in securities transactions in violation of regulations in principle, demonstrating the determination of "zero tolerance".
The third is technical prevention and control. Achieve full coverage of dynamic monitoring of employees' mobile phone login to securities accounts and employees' securities trading behaviors, and focus on strengthening the control of staff in key sensitive positions.
Fourth, supervision and auditing. In 2022 and 2023, special rectification of employees' illegal securities trading will be carried out for two consecutive years.
China Merchants Securities said that it will continue to adhere to the principle of "zero tolerance", take the case as a warning, ring the alarm bell for a long time, strengthen the ideological education of employees, establish a cultural concept of honesty and trustworthiness, and compliance with laws and regulations, build a solid internal control system that integrates before, during, and after the event, and resolutely curb the occurrence of illegal stock trading by employees.
The China Securities Regulatory Commission emphasized that in order to thoroughly implement the spirit of the Central Financial Work Conference, comprehensively strengthen financial supervision, and adhere to the supervision of "long teeth and thorns". It is a basic requirement of the Securities Law that securities practitioners are not allowed to buy or sell stocks. From 2019 to 2023, the China Securities Regulatory Commission (CSRC) investigated and handled a total of 67 cases of illegal stock speculation by practitioners, and imposed administrative penalties on 139 people, focusing on building a long-term mechanism for "not daring, can't, and not wanting to" illegal stock trading.
In the next step, the China Securities Regulatory Commission will cooperate with industry associations to continue to carry out the following work: First, improve the system and mechanism. Formulate a special rectification work plan to strictly crack down on illegal stock speculation by securities practitioners in accordance with the law, consolidate the main responsibility of institutions, urge securities companies to strengthen internal monitoring, self-examination and self-correction and accountability mechanisms, and all securities regulatory bureaus will carry out special on-site inspections. Improve rules for the management of employees' investment conduct, urging institutions to improve internal control systems such as investment declarations, reviews, monitoring, and punishments. The second is to strengthen supervision and law enforcement. "Crack down on violations" when they appear, strictly hold institutions with ineffective control accountable, build a punishment mechanism of "one violation, restrictions everywhere", and carry out special governance actions. The third is to continue to purify the industry ecology. Carry out in-depth comprehensive governance of industry culture construction, establish and improve the system of classified lists of practitioners and the management mechanism of professional reputation.
In addition to China Merchants Securities, the brokerages that have recently been "cleaned up" by the China Securities Regulatory Commission include Shenwan Hongyuan Securities and Ping An Securities.
Source: Canned Gallery
Shenwan Hongyuan Securities' violations were: first, the underwriting due diligence was not standardized, and some projects did not pay sufficient attention to and verify the matters that may affect the issuer's solvency; second, the entrusted management failed to perform its duties and responsibilities, and individual projects failed to track and analyze the impact of the matters affecting the issuer's solvency during the duration of the project. The above acts violated the relevant regulations of the Administrative Measures for the Issuance and Trading of Corporate Bonds and the Administrative Provisions on the Asset Securitization Business of Securities Companies and Subsidiaries of Fund Management Companies. The China Securities Regulatory Commission (CSRC) took administrative supervision measures against Shenwan Hongyuan to order corrections.
Source: Screenshot of the announcement of the Securities Regulatory Commission
Ping An Securities' violations were: first, there were violations of fair competition in the process of bond issuance and pricing, and the interest rate of individual bond issuance was linked to the underwriting fee; second, the due diligence of individual bond projects was incomplete and the key elements were not sufficiently obtained. The above behavior violated the Administrative Measures for the Issuance and Trading of Corporate Bonds, and the China Securities Regulatory Commission took administrative supervision measures against Ping An Securities by issuing a warning letter.
Source: Screenshot of the announcement of the Securities Regulatory Commission
However, it is worth noting that whether it is the punishment of Shenwan Hongyuan Securities, Ping An Securities, or China Merchants Securities, the detailed investigation was carried out during the period of Yi Huiman, the former chairman of the China Securities Regulatory Commission, and the results of the investigation were announced and disclosed after Wu Qing took office.
The "brokerage butcher" deserves its name
Wu Qing was appointed as the new party secretary and chairman of the China Securities Regulatory Commission on February 7, two days before the Spring Festival, replacing Yi Huiman.
It is worth noting that the high-level personnel changes of the Securities Commission coincided with the fall of thousands of shares in the A-share market and the Shanghai Composite Index fell to a new low of 2,635 points. Concerns about financial systemic risk are on the rise again.
The China Securities Regulatory Commission was established in 1992 and has been chaired by Liu Hongru, Zhou Daojiong, Zhou Zhengqing, Zhou Xiaochuan, Shang Fulin, Guo Shuqing, Xiao Gang, Liu Shiyu and Yi Huiman. Wu Qing is the 10th chairman of the SFC.
The position of chairman of the China Securities Regulatory Commission is known as the "crater" by the outside world. The most well-known metaphor of "crater" comes from Liu Hongru. At the beginning, when Zhu Rongji, then premier of the State Council, asked Liu Hongru to become China's first chairman of the China Securities Regulatory Commission, Liu Hongru was reluctant and said: "This work is a crater, and I really want to do it, and it can't take long." Later, after media reports, every chairman of the China Securities Regulatory Commission took office since then, and was dubbed a "crater" by the outside world.
As for Wu Qing's new appointment, Caijing magazine published an article titled "Wu Qing Takes Over as Chairman of the China Securities Regulatory Commission, A-share New Year?", which also represents the expectations of all sectors of society for the recovery of the market.
Source: Caijing magazine article screenshot
According to the "Science and Technology Innovation Board Daily", on the afternoon of February 7, Wu Qing had arrived at the China Securities Regulatory Commission (i.e., Beijing Fukai Building) for office. The report also mentioned that the CSRC staff recently left work a little later than usual, but not overnight.
Compared with the previous chairmen of the CSRC, Wu Qingben is the first chairman of the CSRC from the securities regulatory system. This transfer is also the third time he has entered the securities regulatory system to hold an important position. Wu Qing's resume shows that he was born in April 1965, Han nationality, graduated from Chinese Renmin University in 1991 with a master's degree in finance, and graduated from Chinese University in 2002 with a doctorate degree in finance.
After graduation, Wu Qing successively served as Deputy Director of the Institutional Department, Director of the General Division, Deputy Director (Director level), Deputy Director (Deputy Department Level) and Director of the Institutional Supervision Department of the China Securities Regulatory Commission, Director of the Risk Management Office of Securities Companies, and Director of the Fund Supervision Department.
During his tenure as deputy director of the Institutional Supervision Department and director of the Risk Disposal Office of the China Securities Regulatory Commission, Wu Qing was called a "butcher of securities firms" by the media for promoting the disposal of 31 illegal securities companies such as Delong Securities, Southern Securities, and Minfa Securities, and finally promoting 26 companies to enter judicial bankruptcy procedures.
Subsequently, in 2009, Wu Qing was transferred to the director of the fund supervision department, and the fund industry also launched a vigorous "rat warehouse" supervision, from the "Zhang Ye case" of the Rongtong Fund to the "Liu Hai case" and "Tu Qiang case", which shook the market. Wu Qing served as the director of the fund supervision department for one and a half years, improved the product declaration procedures, new regulations on fund sales, and promoted the reform of the fund issuance system. Wu Qing's iron-fisted image was also established.
In May 2016, Wu Qing served as the chairman and secretary of the party committee of the Shanghai Stock Exchange. During his tenure, Wu Qing once emphasized that front-line supervision is the duty of the exchange, and it is necessary to break the casserole and ask the question. Identify the "big flicker" and "small flicker", and promote the realization of fairness and justice through openness and transparency.
As early as 2009, Wu Qing wrote an article on the Wall Street financial crisis in China Securities magazine, in which he wrote: The Wall Street crisis has brought us many experiences and lessons, one of which is that financial regulation must pay attention to compliance and prudence at the same time, and always prevent and deal with systemic risks.
Wu Qing pointed out that the failure of Wall Street is by no means just the failure of investment banks, it is caused by a series of problems in the financial system, the economy, and even politics, which are and will be shared by these parties.
Source: Canned Gallery
Similarly, when we are faced with the stock market, the housing market or the financial crisis, what needs to be saved is by no means or not just a certain institution or even a certain market, but we must focus on solving the underlying economic problems, mechanisms and institutional problems.
Wu Qing also mentioned his own ideas on securities regulation in the article, he wrote: "The basic goal of financial supervision is undoubtedly to protect the legitimate rights and interests of customers and maintain the security of the financial system, but there are no rules on the way to effectively achieve the goal, and sometimes they find it and give it up." The willingness of financial institutions to self-regulate and supervise is often unreliable, so there can be no gaps in financial supervision. ”
According to the Financial Associated Press, after Wu Qing took office, the 2024 system work conference of the China Securities Regulatory Commission was held, and Wu Qing emphasized that it is necessary to promote the work from three aspects:
1. Highlight the investor-oriented concept. Starting from maintaining market fairness, we will systematically sort out and evaluate the key institutional arrangements of the capital market, focus on improving regulatory rules such as issuance and pricing, quantitative trading, and securities lending and lending, and clearly reflect the priority of protecting the legitimate rights and interests of investors, especially small and medium-sized investors.
Second, it is necessary to coordinate "stability" and "progress". Efforts should be made to enhance the internal stability of the capital market, improve the effective mechanism for maintaining the smooth operation of the capital market, strengthen the coordination of all parties, strengthen communication with the market, and stabilize the market and confidence with more effective measures. Adhere to the principle of promoting stability through progress, establishing first and then breaking down, further deepen the reform of the capital market in an all-round way, and improve the basic system of the capital market.
Third, it is necessary to highlight the integration of strong supervision, risk prevention and development. Adhere to the strengthening of supervision and risk prevention as an important guarantee for high-quality development, adhere to the main responsibility and main business of supervision, comprehensively strengthen institutional supervision, behavioral supervision, functional supervision, penetrating supervision, and continuous supervision, and put supervision in place.
What do you think of Wu Qing's punishment of Shenwan Hongyuan Securities, Ping An Securities, and China Merchants Securities in less than a week after taking office? Do you think the stock market is about to pick up? Welcome to leave a message in the comment area to discuss.