CFIC Introduction
According to incomplete statistics, since the release of the new "National Nine Articles", many securities regulatory bureaus have issued fines to 12 securities firms in less than a month.
On the last working day of April, the Beijing Securities Regulatory Bureau, the Guangdong Securities Regulatory Bureau, and the Xinjiang Securities Regulatory Bureau intensively disclosed 12 fines, involving 5 securities firms and 7 relevant responsible persons. Among them, China Securities Construction Investment was punished by the Beijing Securities Regulatory Bureau and the Guangdong Securities Regulatory Bureau at the same time, and Haitong Securities received fines from the Guangdong Securities Regulatory Bureau and the Xinjiang Securities Regulatory Bureau at the same time.
The reporter noted that in this round of fines, the supervision of various violations is relatively comprehensive, of which the four fines of the Guangdong Securities Regulatory Bureau point to all aspects of bond issuance management, including underwriting, fiduciary management and continuous supervision.
According to incomplete statistics, since the release of the new "National Nine Articles", many securities regulatory bureaus have issued fines to 12 securities firms in less than a month.
CICC, China Securities Construction Investment and Guodu Securities
"Named" by the Beijing Securities Regulatory Bureau
On April 30, the website of the Beijing Securities Regulatory Bureau disclosed seven fines at one time.
Among them, Guodu Securities and general manager Yang Jiangquan were taken administrative supervision measures. According to the fine, Guodu Securities has the following problems: the company's internal control system for integrity is not perfect, there are no internal regulations and limited standards for some business activities, post checks and balances and internal supervision are ineffective, and the responsible persons are not held accountable after the fact. As the general manager of the company, Yang Jiangquan is the first person responsible for the implementation of the responsibility of honest management, and bears the main responsibility for the relevant violations. As the general manager of the company's comprehensive management department at the time, Sun Guannan was responsible for the relevant violations.
CSC is not prudent in carrying out OTC options and proprietary business, does not manage employees in place, and has non-standard corporate governance, reflecting the company's failure to effectively implement compliance management. Risk management and internal control, ordered to seriously rectify the above issues, and within one year, every three months to carry out internal compliance inspections, according to the inspection situation to continuously improve the management system and internal control measures, strengthen business and personnel management, prevent and control risks, and submit a compliance inspection report to the CSRC within 10 working days after each inspection.
CICC has transactions between its own and investment advisory accounts, inadequate management of conflicts of interest, imprudent conduct of OTC options business, inadequate management of the business and investment behavior of its subsidiaries, and non-standard corporate governance, reflecting the Company's failure to effectively implement compliance management and imperfect internal control. It was also ordered to increase the number of compliance inspections and administrative supervision measures.
3. Brokerage firms violated the underwriting of multi-phase bonds of Gree Real Estate
According to the fines issued by the Guangdong Securities Regulatory Bureau, Zhongtai Securities, Haitong Securities, and China Securities Construction Investment were fined because of violations in the underwriting of Gree Real Estate-related bonds.
Zhongtai Securities, as the lead underwriter and trustee of Gree Real Estate Bonds "18 Grid 01", "18 Grid 02", "18 Grid 03" and "19 Grid 01", did not rigorously analyze and verify the absence of a decline in the price of inventory, failed to prepare working papers of consulting and auditing institutions, failed to disclose the interim trustee management affairs report to the issuer's major losses, and disclosed the interim trustee management affairs report on the issuer's investigation matters in a timely manner.
Haitong Securities, as the lead underwriter and trustee of Gree Real Estate Bonds "21 Grid 02" and "22 Grid Land 02", failed to prudently analyze and verify the situation that the opening price of individual properties around the inventory was lower than the floor price of the project. During the verification of subsequent events, the Company failed to pay continuous attention to and conduct due diligence on the assessment of the net realizable value of inventory, failed to prepare working papers of consulting and auditing institutions, failed to disclose the interim trustee management affairs report on the issuer's material losses, and failed to disclose the interim trustee management affairs report on the issuer's error correction matters in a timely manner.
As the lead underwriter and trustee of Gree Real Estate Bond "23 Gedi 01", China Securities did not leave enough traces in the working papers of the consulting and auditing institutions, did not make interview records with the management of the issuer, and failed to disclose the interim trustee management affairs report to the issuer's material losses.
On February 20, the Shanghai Stock Exchange issued a notice criticizing Lu Junsi, the then chairman of Gree Real Estate. After investigation, the company failed to accurately measure inventory, asset impairment and other accounting subjects, resulting in inaccurate financial data disclosed in bond issuance announcements, prospectuses, and multi-period periodic reports, which damaged investors' right to know. From June 2008 to June 2022, Lu Junsi served as the chairman of Gree Real Estate, responsible for the overall work of Gree Real Estate, and was primarily responsible for the authenticity, accuracy and completeness of Gree Real Estate's financial and accounting reports.
The supervision of "long teeth and thorns" promotes the return of securities companies to their responsibilities
Since the issuance of the new "National Nine Articles", the regulatory authorities have further consolidated the "gatekeeper" responsibilities of intermediaries, and under the strong regulatory situation, many securities regulatory bureaus have issued fines to 12 securities firms in less than a month.
In addition, a number of securities institutions have been investigated by the China Securities Regulatory Commission, including CITIC Securities, Haitong Securities, Soochow Securities, etc.
On April 12, CITIC Securities and Haitong Securities both disclosed that they were suspected of violating laws and regulations in the process of transferring CNNC titanium dioxide's non-public issuance of shares in 2023 in violation of restrictive regulations, and both securities firms were filed by the China Securities Regulatory Commission. On the same day, China Nuclear Titanium Dioxide also issued an announcement saying that Wang Zelong, the actual controller of the company, was filed by the China Securities Regulatory Commission on suspicion of violating restrictive provisions to transfer the company's 2023 private placement shares.
On the evening of April 30, the case was punished for "falling the hammer". China Nuclear Titanium Dioxide, CITIC Securities, and Haitong Securities issued announcements and received the "Administrative Penalty Decision" from the China Securities Regulatory Commission. The CSRC intends to impose a total fine of 235 million yuan on all participants. Among them, about 77.53 million yuan of illegal gains were confiscated and 157 million yuan was fined, which was about twice the amount of the confiscated illegal gains.
Judging from the recent regulatory developments, the penetrating strong supervision under the new "National Nine Articles" has regulated many fields, including issuance and listing, margin financing and securities lending. Industry insiders said that for the securities industry, the "gatekeeper" responsibility and "value discovery" ability will be continuously compacted, forcing the business logic, standardization and ability of securities companies to continue to optimize and improve.
Source of this article: Shanghai Securities News
Author: Xu Wei
WeChat editor: Wang Ziqing
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