Photo source: Visual China Fully implement the supervision of "long teeth with thorns", and some securities companies are supervised to issue warning letters!
The Blue Whale News reporter noticed that today, SDIC Securities Hebei Branch was taken administrative supervision measures by Hebei Securities Regulatory Bureau to issue a warning letter. Among them, there are problems such as failure to implement effective compliance management on employees' practice behavior, inadequate investor appropriateness management, implementation of special assessment and incentive policies on some public fund products during the subscription period, and incomplete information publicity.
Since this year, SDIC Securities has been notified by the Shanghai Stock Exchange due to violations of the recommendation business and weak internal control; Earlier, media reported that an employee of SDIC Securities was suspected of being subject to regulatory investigation due to "mouse position" trading. From this point of view, the compliance internal control management of SDIC Securities may need to be strengthened.
Inadequate management of investors
On May 21, Hebei Securities Regulatory Bureau issued a warning letter to SDIC Securities Hebei Branch.
Source: official website of Hebei Securities Regulatory Bureau Upon investigation, SDIC Securities Hebei Branch has the following problems: First, it failed to implement effective compliance management on employees' practice behavior. Individual employees entrust a third party to solicit investors in violation of regulations; Some employees sold financial products and provided investment advisory services without trace management; Some employees' actual mobile phone numbers are not included in the compliance monitoring system; The investment advisers provided investment advice to investors without reasonable basis and without review by the economic cooperation and regulatory personnel.
Second, investors' appropriateness management is not in place. Actively introduce medium and high risk fund products to ordinary investors with uncertain investment objectives, investment periods and risk levels; The sale process of some public fund products misled investors, and no risk warning was given.
The third is to implement special assessment and incentive policies for some public fund products during the subscription period.
Fourth, the content of information publicity is incomplete. The branch did not publicize the interest rate and rate of financed funds and bonds at its business premises.
From the above problems, it is easy to see that there are omissions in the behavior management of employees by SDIC Securities. Earlier, it was reported by the media that an employee of SDIC Securities was suspected of being subject to regulatory investigation due to "mouse position" trading. A person familiar with the matter said that the employee was affiliated to the information technology department of SDIC Securities, and was suspected of using his work convenience to obtain the position information of a fund company in SDIC Securities settlement trading products, and transacted in violation of regulations.
In response to this rumor, at that time, SDIC Securities responded that "Recently, regulators have come to our company for on-site work, and we have no specific information about the specific work content and relevant conclusions, which we do not know yet." The company attaches great importance to the protection of investors' rights and interests and internal control management, and strictly implements various national laws, regulations and industrial standards, Actively cooperate with the relevant work of the regulatory authority, strictly require employees to abide by various management regulations for securities practitioners, never condone any violation of laws and regulations and damage to the rights and interests of investors once verified, and strictly investigate and deal with them and firmly hold them accountable.
The "roll call" of Shanghai Stock Exchange due to poor performance of recommendation responsibilities
Since this year, SDIC Securities has been reported by the Shanghai Stock Exchange due to the violation of the recommendation business and weak internal control.
In January, SDIC Securities received the supervision letter from the Shanghai Stock Exchange due to the recommendation of Rongsheng Biological Project, and two types of recommendation responsibilities were not performed in place. Fu Youkai and Li Zeye, the sponsor representatives of SDIC Securities, were both criticized in a circular.
The decision on regulatory measures shows that, first, SDIC Securities failed to report and supervise the disclosure of major issues affecting the sustainable operation of Rongsheng Biology in a timely manner.
According to the application documents, varicella vaccine is the core product of Rongsheng Biology, and Rongsheng Biology has only one varicella vaccine production line. From July 2022 to January 2023, Rongsheng Biological's only varicella vaccine production line was shut down twice for maintenance, with a cumulative shutdown of up to three months, which had a significant adverse impact on its business performance and was a major event affecting Rongsheng Biological's sustainable operation.
In September 2022, SDIC Securities learned about the first shutdown of Rongsheng Biology, but did not report to the Shanghai Stock Exchange in time before the municipal party committee meeting was held, nor did it disclose in the prospectus and other application documents. In February 2023, SDIC Securities learned about the second shutdown, and still did not fulfill the reporting obligations.
Second, the due diligence procedures of SDIC Securities were not implemented in place, and there were weak links in internal control. In the early stage, Shanghai Stock Exchange carried out on-site supervision on the practice quality of SDIC Securities, and found that its verification of the income, capital flow and inventory of individual projects was not in place. The on-site supervision of practice quality also found that there were weak links in the internal control of the recommendation business of SDIC Securities, such as the investment bank's quality control, the core department's inadequate tracking and implementation of project opinions, insufficient attention to major anomalies in the project, and inadequate management of project draft acceptance and submission.
The change of senior executives and the self support business "step on the thunder"
In addition, recently, SDIC Securities has attracted market attention due to personnel "earthquake", poor performance and self operated business "thunder".
On the evening of April 8, this announcement of SDIC said that Yao Zhaoxin, Vice President, Secretary of the Board of Directors, General Counsel and Chief Compliance Officer of the company, applied to resign from the above positions due to work reasons. Yao Zhaoxin is also one of the three supervisors of SDIC Securities. On the same day, at the internal meeting of SDIC Securities, it was reported that Wang Lianzhi, the general manager, was dismissed and Wang Suwang, the deputy general manager, temporarily acted on his behalf.
Some market analysts said that Wang Lianzhi's exemption was related to the continuous decline in the performance of SDIC Securities, as well as the accountability and accountability of the launch of the self operated "stepping on thunder" Huasoft New Power.
According to market news, at the end of last year, the old brand private placement of Huasoft New Power was involved in the "Hangzhou 3 billion quantitative escape" event, while SDIC Securities unfortunately "stepped on the thunder" because of its own investment of 600 million in Huasoft New Power. Although the amount of funds for trampling on thunder is not large for SDIC Securities, the risk loss caused by concentration cannot be underestimated.
In terms of performance, in the past two years, the profitability of SDIC Securities was not ideal, and the overall trend was downward. In 2022, SDIC Securities realized an operating income of RMB 14.358 billion, a year-on-year decrease of 3.16%; The net profit was 2.619 billion yuan, a year-on-year decrease of 38.3%. In 2023, SDIC Securities will achieve an operating revenue of 14.39 billion yuan, up 0.22% year on year; Net profit was 1.939 billion yuan, a year-on-year decrease of 25.96%.
In terms of business lines, in 2023, the net income of SDIC Securities brokerage business will be 4.189 billion yuan, a year-on-year decrease of 3.68%; The net income of investment banking business was 1.489 billion yuan, a year-on-year decrease of 10.77%; The net income from investment business was 199 million yuan, a positive growth year on year; The net income of asset management business was 325 million yuan, a year-on-year decrease of 21.90%; The net income from credit business was 1.353 billion yuan, a year-on-year decrease of 8.08%.
