On the evening of April 18, the Jiangsu Securities Regulatory Bureau issued three fines in a row, and Donghai Securities was ordered to correct by the Jiangsu Securities Regulatory Bureau because of violations in many businesses such as self-operated and investment banking. At the same time, Yang Ming, the president of the company, was also issued a warning letter by the regulator.
Multiple business violations
The Jiangsu Securities Regulatory Bureau said that after investigation, Donghai Securities did not establish a multi-level, interconnected, and effective risk management operation mechanism in terms of comprehensive risk management. The organizational structure of risk control of self-operated business is unreasonable, risk management is not in place, the management of internal risk limits in equity business is not effectively implemented, and the operation of some fixed income business is not subject to effective checks and balances and supervision.
At the same time, from October 2020 to March 2021, the appointment and removal of supervisors of its subsidiary, Donghai Investment Co., Ltd., was not completed in a timely manner.
In addition, in some investment banking projects of Donghai Securities, a sound underwriting risk assessment and handling mechanism was not established, the pricing basis of offline investors was not strictly reviewed, bookbuilding and video recording were not carried out as required, and the writing of some investment value research reports was not prudent and objective.
According to the Jiangsu Securities Regulatory Bureau, the above behavior violates the first paragraph of Article 27 of the Regulations on the Supervision and Administration of Securities Companies (Decree No. 653 of the State Council), the first paragraph of Article 6 of the Administrative Measures for Risk Control Indicators of Securities Companies (Decree No. 166 of the CSRC), and the provisions of Article 3 and Article 5, Paragraph 2 of the Administrative Measures for the Issuance and Underwriting of Securities Issuance (Decree No. 144 of the CSRC), reflecting the imperfect internal control of your company and the lack of comprehensive risk management.
In accordance with the provisions of Article 70 of the Regulations on the Supervision and Administration of Securities Companies, the Jiangsu Securities Regulatory Bureau decided to take administrative supervision and management measures against the company to order corrections.
Two responsible persons received fines
At the same time that the company was ordered to make corrections, the president of Donghai Securities and other responsible persons also received fines.
The Jiangsu Securities Regulatory Bureau said that Donghai Securities has not established a multi-level, interconnected, and effective risk management operation mechanism in terms of comprehensive risk management. The organizational structure of risk control of self-operated business is unreasonable, risk management is not in place, the management of internal risk limits in equity business is not effectively implemented, and the operation of some fixed income business is not subject to effective checks and balances and supervision.
Yang Ming, as the director (president) of the executive committee of Donghai Securities, failed to effectively implement the company's compliance management objectives and was responsible for the management of the above issues. Therefore, the Jiangsu Securities Regulatory Bureau decided to take administrative supervision measures against Yang Ming by issuing a warning letter, and recorded it in the integrity file of the securities and futures market.
Yang Ming is one of the most important recruits of Donghai Securities in the past two years. At the end of 2022, Donghai Securities introduced Yang Ming as the director (president) of the executive committee. Yang Ming was born in October 1981 and is a master's student. He used to be the senior investment manager of the securities investment and financial derivatives headquarters of Shenyin & Wanguo Securities Co., Ltd., the investment director and fund manager of Dacheng International Asset Management Co., Ltd., the head of the institutional investment department and investment manager of Huabao Industrial Fund Management Co., Ltd., and the senior vice president of the asset management department of Taiping Asset Management Co., Ltd.
In June 2016, Yang Ming joined Guolian Securities as Vice President of Guolian Securities Co., Ltd., Chairman and General Manager of Guolian Lianbao Capital Investment Co., Ltd., and Acting President of Guolian Securities from June 2019 to October 2019.
At the same time, the Jiangsu Securities Regulatory Bureau also stated that during his tenure as the investment manager of Donghai Securities from 2021 to 2023, Lin Xianfeng failed to comply with the laws, regulations and guidelines related to professional behavior, actively identified and controlled the compliance risks of professional behavior, and violated relevant regulations, so it decided to take administrative supervision measures such as issuing a warning letter to him, and recorded it in the integrity file of the securities and futures market.
Editor-in-charge: Lin Gen
Proofreader: Wang Jincheng