China Thailand asset management recently received a regulatory ticket. Since last year, it has been common for asset management of securities companies to be punished, and China Thailand asset management has been punished for similar problems.
The Shanghai Securities Regulatory Bureau mentioned two violations in the ticket. One is that individual asset management plans of the company still use the historical closing price valuation for a long time when the bidding trading of the invested bonds has stopped, and the valuation method is unreasonable; Second, the related party transaction system is not perfect, and the pricing method of related party transactions is not standardized in the system.
Shanghai Securities Regulatory Bureau took administrative supervision measures against China Thailand asset management company: issued a warning letter to Xu Jiandong, general manager and member of the company’s Valuation Committee, and Wang Hongyi, chief compliance officer and member of the company’s Valuation Committee.
The above violations of China Thailand asset management do not comply with Item 2 of Article 2 of the guiding opinions of China Securities Regulatory Commission on the valuation business of securities investment funds, and violate the provisions of Article 43 of the measures for the administration of private asset management business of securities and futures operating institutions, “Securities and futures operating institutions shall implement net value management of asset management plans, determine reasonable valuation methods and scientific valuation procedures, and calculate the net value of asset management plans truly and fairly.”.
The above-mentioned acts of China Thailand asset management also violate the provisions of paragraph 1 of Article 66 of the measures for private placement asset management,
Securities and futures operating institutions shall establish and improve the management system of related party transactions, standardize the identification standards, transaction pricing methods and transaction approval procedures of related party transactions, and shall not use the assets of the asset management plan to conduct improper transactions, transfer of interests, insider trading and manipulate the market with related parties.
In this regard, the Shanghai Securities Regulatory Bureau decided to take administrative regulatory measures to issue a warning letter to China Thailand asset management. The company shall make corrections and submit a written report before April 21, 2022.
several securities companies receive fines intensively for asset management
The regulatory authorities attach great importance to the compliance operation of private asset management business. Before that, 15 securities companies have been punished by the CSRC for non-compliance of asset management business.
On February 1, 2021, Sichuan Securities Regulatory Bureau took regulatory measures to restrict business activities and order punishment of relevant personnel due to “the purchased bonds were not included in the white list of corporate bond pool in the transaction of investment bonds of asset management products”. The “operation and management of bond trading department was chaotic” and “personnel management was not in place”.
On March 24, 2021, Haitong Securities Company Limited(600837) , Haitong asset management were punished by Shanghai Securities Regulatory Bureau for “failing to operate prudently in the process of carrying out investment consulting and private asset management business”, “failing to effectively control and prevent risks” and “lack of compliance risk control management”. Haitong asset management shall be ordered to suspend the provision of investment consulting services for private asset management products of securities and futures operating institutions for 12 months, suspend the filing of new private asset management products for 6 months, and take regulatory measures such as identifying multiple persons directly responsible and personnel with management responsibility as inappropriate candidates for 2 years.
On May 7, 2021, China postage Management Co., Ltd. failed to comprehensively sort out the risk points of incorruptible employment of the asset management branch, did not include the risk points such as “transferring the actual investment decision-making authority of the asset management account” and corresponding risk control measures, and did not timely update the directory of incorruptible employment risk prevention and control in combination with the adjustment of Posts and personnel. ” “The implementation of income deferred payment system for main business personnel and relevant managers of asset management business is not standardized” and “the valuation of financial instruments held in some asset management plans is unreasonable” were taken regulatory measures ordered to correct by Shaanxi securities regulatory bureau.
On November 5, 2021 China International Capital Corporation Limited(601995) received the decision of Beijing Securities Regulatory Bureau to take corrective measures due to “using the cost method to value some assets in the private asset management plan” and “there are inconsistencies in the valuation technology adopted for the same investment variety with the same characteristics”.
On November 2021, the CSRC ordered the investment object not to be subject to the “due diligence” and “due diligence” measures, and the investment management products were not subject to the “due diligence” and “due diligence” measures.
On November 11, 2021, Huaan Securities Co.Ltd(600909) received administrative supervision measures from Anhui Securities Regulatory Bureau due to “illegal transactions between different asset management plan accounts”, “imperfect control of bond investment risk”, “failure to establish a deferred payment mechanism for the main business personnel and relevant managers of private asset management business”.
On November 24, 2021, Shenwan Hongyuan Group Co.Ltd(000166) was issued a warning letter by Shanghai Securities Regulatory Bureau because of the problems of “unlicensed investment in bonds underwritten by related parties”, “ineffective isolation from other businesses” and “unreasonable valuation method”.
On December 7, 2021, Zheshang asset management failed to disclose information to investors due to “inconsistent valuation techniques adopted for the same investment variety”, “unreasonable valuation of default assets held by products, continuous development, purchase and redemption of some collective products”, “lack of investment transaction management” and “imperfect investor suitability management system” “No full-time compliance personnel for bond trading and no compliance personnel stationed in non local bond trading departments” and other issues were suspended by Zhejiang securities regulatory bureau for six months. And this is also the heaviest punishment in this round.
It can be seen from several penalties that the unreasonable valuation method has become the hardest hit area of compliance. In the case of lessons learned, China Thailand asset management failed to make timely comparison and correction. This time, three penalties were received for the same problem.
asset management business net income has been in the top 20 range for many years
Zhongtai Securities Co.Ltd(600918) mainly carries out asset management business by holding LUZHENG futures, Zhongtai capital, Zhongtai financial international, Zhongtai asset management, Zhongtai venture capital, participating in Wanjia fund, Qilu equity trading center, etc.
Asset management business has always been a Zhongtai Securities Co.Ltd(600918) advantageous business. According to the statistical data of China Securities Association, in 2020 and 2021, Zhongtai Securities Co.Ltd(600918) asset management business achieved net income of 185.2 million yuan and 214.45 million yuan respectively, ranking 17th and 19th respectively.
With the continuous growth of residents’ investable assets, the optimization of asset structure and the improvement of residents’ trust in professional investment institutions, China’s asset management has broad prospects for development. But the following regulatory problems are common.
In the context of the transformation to wealth management, securities companies have optimized the asset management business structure, fully grasped the opportunities and made active management. According to statistics, the scale of the top 20 has exceeded 5.2 trillion yuan. On February 23, the China Foundation Association released the average monthly scale of asset management (update), which showed that the asset management scale of the top 20 securities companies totaled 6.15 trillion yuan in the fourth quarter of 2021. Among them, Citic Securities Company Limited(600030) is far ahead of China International Capital Corporation Limited(601995) nearly 300 billion yuan, with an average monthly asset management scale of 1.17 trillion yuan Boc International (China) Co.Ltd(601696) surpassed the investment management with a scale of 597738 billion yuan, ranking third The average monthly asset management scale of Boc International (China) Co.Ltd(601696) , Citic Securities Company Limited(600030) increased by more than 100 billion yuan compared with the third quarter of last year, an increase of 124.56 billion yuan and 122589 billion yuan respectively.
The asset management scale advantage of head securities companies is still obvious, and most securities companies vigorously develop asset management business. Asset management strength is one of the important manifestations of the wealth management ability of securities companies, but the attendant regulatory penalties have sounded an alarm to all companies.
strictly supervise the valuation method of asset management plan, which brings a warning to the industry
The financial Associated Press reporter interviewed relevant industry personnel on valuation methods and other issues. The industry generally believes that asset management institutions should continue to scientifically improve valuation technology, maintain the consistency and rationality of the valuation system, and try to fit with the market to reflect the fair value of assets.
After the new regulations on asset management, the valuation of asset management products is equally important, in addition to the standardization of the identification and information disclosure of creditor’s rights assets. The overall regulatory requirements for valuation methods favor “fair value” (including market price) and “visualization”. Because the cost valuation method may cause the net value to deviate from the fair value seriously, cause the disclosure information to deviate from the actual situation, and mislead investors, which is not in line with the current trend of sunshine and transparency in financial development.
For the asset management of securities companies, compliance with regulatory requirements is the top priority in the development of various businesses. Improve internal management, standardize the operation process of asset management products, sort out risks and strengthen regular reports. If there are non-standard behaviors, a practical and feasible rectification plan shall be formulated to adhere to the bottom line of compliance and prudent operation.
