In 2021, the CSRC continued to release “strict supervision” to the market, involving securities companies, investment banking, brokerage and other business departments, forcing the practitioners of securities companies to improve their practice quality.
Recently, the China Securities Association issued the guidelines for the evaluation of the practice quality of securities companies engaged in M & a financial consulting business (Draft), and required to submit feedback before February 25.
China Securities Association said that the revised evaluation guidelines integrate the requirements of strengthening the supervision of investment banking business under the background of registration system reform, and the evaluation indicators have changed from scale oriented to quality oriented. In addition, it also expanded the scope of project evaluation and increased the deduction of compliance points.
This is the first time in eight years that the evaluation standard of the practice quality of financial advisers of securities companies has been revised on such a large scale.
termination and withdrawal of projects will affect the rating of securities companies
In terms of the project from scale oriented to quality oriented, in the revised evaluation guidelines, the full score of the project audit evaluation index and business scale index is 30, which are the two largest sub items.
China Securities Association said that the evaluation scope of the revised evaluation guidelines added administrative licensing M & A projects such as “registration system” and non administrative licensing major asset restructuring projects. At the same time, in order to reflect the regulatory concept of “reporting is responsible”, the calculation range of project quality indicators is subject to the projects with rating results issued by the CSRC or the exchange, and terminated projects such as whether or not to be withdrawn are added.
Specifically, the projects included in the calculation scope of project quality indicators are divided into two categories. Among them, administrative licensing M & A projects include those that have been registered (or approved) and terminated (including withdrawn), except those that have been accepted but withdrawn without inquiry; Non administrative licensing major asset restructuring projects include those that the general meeting of shareholders of a listed company has decided to adopt the restructuring plan, and those that the listed company has announced the termination of the restructuring.
The project quality score is the average value of each project score of the securities company in the previous year. 30 points will be given if the project’s professional quality is rated as a, 15 points will be given if it is rated as B, and 0 point will be given if it is rated as C.
six cases are directly rated as grade C
According to the evaluation guidelines, the following six cases are directly rated as grade C:
(I) if there are projects within the evaluation period but the evaluation materials are not submitted, the evaluation result is class C.
(2) during the evaluation period, if a securities company or its employees are suspected of committing a crime in the financial consulting business of mergers and acquisitions of listed companies and are placed on file for investigation or subject to criminal punishment by the judicial organ, the evaluation result is class C.
(3) during the evaluation period, if a securities company or its employees are subject to administrative punishment by the CSRC or other financial supervision departments for engaging in the financial consulting business of mergers and acquisitions of listed companies, the evaluation result is class C.
(4) during the evaluation period, if a securities company is subject to major regulatory measures such as restricting underwriting and recommendation business activities, ordering suspension of business for rectification, designating other institutions for custody, takeover or cancellation, the evaluation result is class C.
(5) during the evaluation period, the securities company or its employees were filed for investigation by the CSRC due to their financial consulting business in the merger and reorganization of listed companies, and the evaluation results were reduced by one file.
(6) after the end of the evaluation period and before the announcement of the evaluation results, if the securities company or its employees are under the circumstances listed in paragraphs (2) to (5) of this article, the evaluation results shall be reduced by one file.
(7) other matters that the association deems necessary to be adjusted.
In addition, securities companies with projects during the evaluation period are divided into three levels: A, B and C. In principle, the securities companies with the top 20% scores are class A, the securities companies with the bottom 20% scores are class C, and the rest are class B. Securities firms without projects in the evaluation period have no scores and are uniformly determined as category n.
Previously, the securities companies rated as class C had no projects approved by the CSRC during the evaluation period.
last year, only 14 securities companies received class a evaluation
On December 3, 2021, the China Securities Association (hereinafter referred to as the China Securities Association) released the professional evaluation results of the professional ability of securities companies to engage in the financial consulting business of mergers and acquisitions of Listed Companies in 2021. 14 securities companies received class a evaluation, 17 securities companies received class B evaluation, and the rest were class C evaluation.
Among them, Guotai Junan Securities Co.Ltd(601211) , Citic Securities Company Limited(600030) , China Securities Co.Ltd(601066) , Zhongtai Securities Co.Ltd(600918) , China Galaxy Securities Co.Ltd(601881) , China International Capital Corporation Limited(601995) and other 14 securities companies obtained class a evaluation in the professional evaluation of their professional ability to engage in the financial consulting business of mergers and acquisitions of Listed Companies in 2021.
17 securities companies including Northeast Securities Co.Ltd(000686) , Sinolink Securities Co.Ltd(600109) , Haitong Securities Company Limited(600837) and Minsheng securities received class B evaluation; Aijian securities, Anxin securities, Bohai Securities, Caida Securities Co.Ltd(600906) , Caitong Securities Co.Ltd(601108) and other 68 securities companies received class C evaluation.
It is worth noting that the securities companies rated as class C have no projects approved by the CSRC during the evaluation period.
