Got fined twice in a month! Huatai Securities received another regulatory warning due to compliance issues

For stock trading, please read Jin Qilin analyst research reports. They are authoritative, professional, timely and comprehensive, helping you to tap potential theme opportunities! On April 25, the Shenzhen Securities Regulatory Bureau disclosed an announcement on the decision to issue a warning letter to the Shenzhen Shennan Avenue Securities Business Department of Huatai Securities Co., Ltd.

According to the announcement, Huatai Securities Shenzhen Shennan Avenue Securities Sales Department cooperated with external organizations to hold customer training exchange meetings in 2019, which involved explaining securities market trends and other related content. However, the sales department did not carry out the activities, agenda, content, lecturer qualifications, etc. Compliance audit.

The Shenzhen Securities Regulatory Bureau stated that the above behavior violated the provisions of Article 3 of the \”Compliance Management Measures for Securities Companies and Securities Investment Fund Management Companies\” (CSRC Order No. 133).

In accordance with the provisions of Article 32, Paragraph 1, of the \”Compliance Management Measures for Securities Companies and Securities Investment Fund Management Companies\” (CSRC Order No. 133), it was decided to take administrative supervision measures by issuing a warning letter to the business department.

Public information shows that this is the second time Huatai Securities has been \”named\” by supervision within a month.

On April 19, the Jiangsu Securities Regulatory Bureau announced that it would take regulatory measures to order Huatai Securities to make corrections.

According to the fine issued by the Jiangsu Securities Regulatory Bureau, the bureau recently conducted an on-site inspection of Huatai Securities. The company was found to have the following problems: First, the compliance risk control of some self-operated businesses was not in place.

The lax control over related-party transactions in the bond market-making business and the lack of effective control over the risk hedging of bond investments resulted in expanded losses.

Second, the suitability management and supervision obligations of some customers were not fulfilled properly.

Issue non-capital-guaranteed floating income certificates linked to individual stock prices to companies without hedging and other risk management needs; issue non-capital-guaranteed floating income certificates to private equity funds that reach the required investment threshold through multiple layers of nesting; fail to fully supervise listed companies Shareholders truthfully disclose information on shareholding reductions.

Third, the qualification management of employees is not in place.

After investigation, it was found that some of the employees at Huatai Securities who should have fund practitioner qualifications failed to pass the fund practitioner qualification examination.

Fourth, the internal control of the co-investment business is imperfect.

The employee follow-up investment platform of Huatai Securities\’ subsidiary did not follow-up investment in all investment projects, which was not in compliance with the company\’s subsidiary\’s internal follow-up investment regulations. The above behavior reflects the imperfection of the company\’s internal control.

The Jiangsu Securities Regulatory Bureau stated that according to Article 32 of the \”Compliance Management Measures for Securities Companies and Securities Investment Fund Management Companies\”, Article 53 of the \”Supervision and Management Measures for Publicly Offered Securities Investment Fund Sales Agencies\”, and the \”Regulations on the Supervision and Management of Securities Companies\” 》Relevant provisions of Article 70, it was decided to take regulatory measures to order corrections against Huatai Securities.

According to the 2023 annual report disclosed by Huatai Securities, the company achieved operating income of 36.578 billion yuan, a year-on-year increase of 14.19%; net profit attributable to the parent company was 12.751 billion yuan, a year-on-year increase of 15.35%.

Although Huatai Securities’ net revenue and profit performance is outstanding among securities companies, its investment banking business has clearly “fallen behind.”

Public information shows that Huatai Securities’ IPO underwriting amount last year was 17.021 billion yuan, which has dropped to seventh in the industry.

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