Everbright Securities Company Limited(601788)
Internal control evaluation report in 2021
Everbright Securities Company Limited(601788) all shareholders:
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the enterprise internal control normative system), combined with the company’s (hereinafter referred to as the company’s) internal control system and evaluation methods, and on the basis of daily and special supervision of internal control, we evaluated the effectiveness of the company’s internal control on December 31, 2021 (the benchmark date of internal control evaluation report). I Important statement
It is the responsibility of the board of directors of the company to establish, improve and effectively implement internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report in accordance with the provisions of the enterprise’s internal control standard system. The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors. The management is responsible for organizing and leading the daily operation of the enterprise’s internal control. The board of directors, the board of supervisors and the directors, supervisors and senior managers of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this report, and bear individual and joint legal liabilities for the authenticity, accuracy and completeness of the contents of the report.
The objective of the company’s internal control is to reasonably ensure the legal compliance of operation and management, asset safety, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote the realization of development strategy. Due to the inherent limitations of internal control, it can only provide reasonable assurance for the realization of the above objectives. In addition, as changes in circumstances may lead to inappropriate internal control or reduced compliance with control policies and procedures, there is a certain risk to speculate the effectiveness of internal control in the future according to the internal control evaluation results. II Internal control evaluation conclusion 1 On the benchmark date of the internal control evaluation report, does the company have any major defects in the internal control of financial reporting
□ yes √ no
2. Evaluation conclusion of internal control over financial reporting
√ valid □ invalid
According to the identification of major defects in the company’s internal control over financial reporting, there are no major defects in the internal control over financial reporting on the benchmark date of the internal control evaluation report. The board of Directors believes that the company has maintained effective internal control over financial reporting in all major aspects in accordance with the requirements of the enterprise’s internal control standard system and relevant regulations. 3. Whether major defects in internal control over non-financial reporting are found
□ yes √ no
According to the identification of major defects in the company’s internal control over non-financial reports, the company found no major defects in the company’s internal control over non-financial reports on the benchmark date of the internal control evaluation report.
4. Factors affecting the evaluation conclusion of internal control effectiveness from the benchmark date of internal control evaluation report to the date of issuance of internal control evaluation report □ applicable √ not applicable
There are no factors affecting the evaluation conclusion of the effectiveness of internal control from the base date of the internal control evaluation report to the date of issuance of the internal control evaluation report. 5. Whether the evaluation on the effectiveness of the company’s internal control report is consistent with the audit conclusion
√ yes □ No 6 Whether the disclosure of major defects in internal control of non-financial reports in the internal control audit report is consistent with the disclosure of the company’s internal control evaluation report √ yes □ no III Internal control evaluation (I) Scope of internal control evaluation
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. 1. The main units included in the evaluation scope include: Everbright Securities Company Limited(601788) parent company, wholly-owned and holding subsidiaries, namely Everbright Securities Company Limited(601788) headquarters departments, subordinate branches, Shanghai Everbright Securities Company Limited(601788) Asset Management Co., Ltd., Everbright Futures Co., Ltd., Everbright Capital Investment Co., Ltd., Everbright fuzun Investment Co., Ltd., Everbright Development Investment Co., Ltd., Everbright Securities Company Limited(601788) Financial Holding Co., Ltd Everbright Prudential Fund Management Co., Ltd. and Everbright happiness International Leasing Co., Ltd. 2. Proportion of units included in the scope of evaluation:
Proportion of indicators (%)
The total assets of the units included in the evaluation scope account for 100% of the total assets in the company’s consolidated financial statements
The total operating income of the units included in the evaluation scope accounts for 100% of the total operating income in the company’s consolidated financial statements
3. The main operations and matters included in the scope of evaluation include:
(1) Internal control at the company level includes corporate governance, corporate culture, organizational structure, development strategy, social responsibility, human resource management, comprehensive budget management, financial management, operation management, information technology management, related party transactions, subsidiary management, information and communication, compliance management, risk management and internal control construction, internal audit, etc.
(2) Internal control at the business and process level, including investment banking, securities self operation, securities brokerage, credit business, wealth management, securities investment consulting, Internet finance, investment research, institutional trading, fund custody, securities asset management, futures, private equity investment and financing, financial leasing, overseas business, financial innovation business and other business control, as well as expense management, procurement management, contract management, tax management Seal management, file management and other process control. 4. Key areas of focus include:
In 2021, the company’s internal control self-evaluation work focused on the key points of supervision and inspection, as well as the areas in which peer institutions violated rules and were subject to regulatory penalties, on the basis of ensuring the coverage of main core business processes. The high-risk areas of focus mainly include: investment banking, securities self operation, asset management business, futures business, credit business, wealth management business, financial innovation business, overseas business, subsidiary management, information technology management, financial management, anti money laundering, etc.
(1) Construction of the company’s internal control system
During the evaluation period, the company thoroughly implemented the decision-making and deployment of the CPC Central Committee and the State Council, continued to improve the construction of internal control system and ensure the standardized operation of internal control mechanism closely around the goal of “strengthening internal control, preventing risks and promoting compliance”.
① Comprehensively sort out the internal control system and improve the implementation of the system. The company further focused on the weak links in the system construction, conducted in-depth inspection on the implementation of the system, and ensured that orders and prohibitions were implemented without discount. Timely translate the external supervision and internal control requirements into systems and regulations, sort out the weak points in the company’s key business areas and key business control links, timely fill loopholes and correct deviations, improve the integrity and operability of the system, and ensure the effectiveness and binding force of the system, so as to form a continuously improved and improved system operation mechanism and enhance the value of the company.
② Optimize and improve the authorization system and decision-making mechanism to improve the level of corporate governance. The company strictly implements the collective decision-making mechanism of “three important and one big” matters, strengthens the control of “three important and one big” matters of subsidiaries, and standardizes the implementation of corporate governance procedures. Strengthen the control of key businesses and important matters, clarify the authorization list at all levels and the authorization division of decision-making subjects, promote the effective implementation of authorization at all levels, and ensure that there are posts, responsibilities, powers and responsibilities, and dereliction of duty.
③ Strengthen internal control management in key areas and continuously improve the internal control mechanism. The company focuses on strengthening the internal control management in key areas such as strategy, risk, compliance, finance, human resources and financial technology, further optimizes the process defense line according to the aspects that need to be restricted in the operation of power and the distribution of risk points in the business process, and forms an internal control working mechanism with clear rights and responsibilities, effective checks and balances, complete processes and strong control.
④ Establish and improve a multi-level and three-dimensional supervision system and strengthen the joint force of supervision and inspection. The company strengthened the supervision, coordination and integration of relevant departments such as compliance inspection, patrol supervision, discipline supervision and audit supervision, effectively implemented the responsibility of internal control supervision, strengthened the supervision of problem rectification, seriously carried out internal control evaluation, continuously strengthened the accountability of discipline enforcement, and improved the effectiveness of internal control implementation.
(2) Main control measures for key businesses and high-risk areas
① Investment banking
The company continued to optimize the “three lines of defense” internal control structure system of investment banking business composed of investment banking business department, quality control headquarters, kernel office, legal compliance department, risk management and internal control department, and further tightened the internal control responsibility. The investment banking business department is the first line of defense of internal control and controls business risks from the source; The quality control headquarters is the second line of defense to find, stop and correct problems in the process of project implementation in time; The compliance, risk control and core departments are the third line of defense, controlling the key risk nodes by intervening in the main business links, so as to realize the overall management and control of investment banking business risks at the company level.
The company has established 115 systems related to internal control of investment banking business. In 2021, the company’s investment banking system comprehensively sorted out, supplemented and improved the internal control system, added and revised 87 systems and regulations such as the reporting procedures of Everbright Securities Company Limited(601788) investment banking business headquarters on risk matters and the management procedures of Everbright Securities Company Limited(601788) investment banking business headquarters on projects and personnel, abolished 4 systems, further standardized the reporting mechanism of risk matters, established a normalized inspection mechanism, and combed and improved the management of project team members The project implementation process and quality control points, and has taken a number of internal control measures, such as strengthening business publicity and staff training, improving business team assessment scheme, optimizing and adjusting organizational structure, strengthening system construction and improving project process control.
② Securities proprietary business
The company further refined the investment decision-making and authorization mechanism of proprietary business, and established a relatively centralized and unified three-level decision-making mechanism composed of the board of directors, the president’s office and its authorized professional committees and proprietary business departments. Within the scope of authorization of the company, their respective business departments strictly follow the relevant rules and regulations, limits and authorization of the company, carry out self operated investment business with the company’s own funds or funds raised according to law, and internally refine and monitor the authorization and risk indicators of the company according to the prevention and control requirements of different types of risks such as market risk and credit risk.
In 2021, according to the needs of business development and risk control, the company’s self operated business department further improved the construction of internal control of investment business. Revise and issue 31 systems, including the measures for the administration of equity directional investment, the measures for the risk management of the equity investment and trading department, the detailed rules for the implementation of fixed income investment business of the fixed income foreign exchange commodity department, and the detailed rules for the management of bond pools of the fixed income foreign exchange commodity department; Two systems, namely, the administrative measures of the Ministry of fixed income foreign exchange commodities on participating in the subscription of public infrastructure REITs and the detailed rules for the implementation of public infrastructure REITs investment business of the Ministry of fixed income foreign exchange commodities, were added to promote the internal control of self operated business to better adapt to the changes of business development. Fixed income self operated investment can effectively control credit risk by improving internal hierarchical authorization, strengthening the control of investment operation links, optimizing credit evaluation workflow and other measures; Equity proprietary investment further optimizes the internal control mechanism by enriching investment strategies, strengthening scale control, standardizing stop loss rules and implementing daily transaction risk monitoring, so as to improve market risk prevention and response ability.
③ Asset management business
The company conducts asset management business through its wholly-owned subsidiary Shanghai Everbright Securities Company Limited(601788) Asset Management Co., Ltd. According to the asset management business and its risk characteristics, the asset management company has established and continuously improved its internal control mechanism in investment research, investment decision-making, transaction execution, product establishment, transaction monitoring, business isolation and so on. Establish an information separation wall system and a conflict of interest prevention and management system, separate investment decisions from transaction execution, ensure that private asset management business is separated from other businesses in terms of venue, personnel, accounts, funds and information, and separate major non-public investment information such as asset management plan positions and transactions managed by different investment managers; Establish a relatively perfect investment decision-making system and investment management daily risk monitoring system, pay close attention to the development trend and policy dynamics of the asset management industry, constantly improve the product scheme design, demonstration and creation, and effectively carry out the product survival management.
④ Futures business
The company conducts futures business through its wholly-owned subsidiary Everbright Futures Co., Ltd. In 2021, the futures subsidiary will further improve its governance structure, strengthen the construction of compliance and risk management culture, and improve the level of corporate governance. Revise and improve the internal control system covering corporate governance, risk management, internal control, deposit custody, business management, customer management, anti money laundering and anti terrorist financing, information technology management, branch management, etc; Compliance and risk management have been fully integrated into and accepted the vertical management of the parent company, investigated and sorted out various business internal control processes as required, supplemented and improved control measures, and prevented and resolved various potential risks; Attach great importance to internal and external supervision and inspection and rectification supervision, and form an effective closed-loop management and operation mechanism of supervision and inspection.
⑤ Credit business
By improving the internal control mechanism of credit business, the company further strengthened the risk control of margin trading and stock pledge business. Implement internal control measures such as credit business scale limit management, guaranteed securities and underlying securities tracking management, customer access audit, credit line approval, risk indicator monitoring, risk customer early warning, business hierarchical approval, post checks and balances, and further optimize the monitoring and management of market value concentration of collateral in 2021 according to the new risk characteristics of two financial services, Tighten the control indicators of the concentration of guarantee bonds and the concentration of customer credit account positions, strengthen the risk research, judgment and transfer out of collateral, and strengthen the risk control of the whole business chain of margin trading.
⑥ Wealth management business
In view of the risk characteristics in the process of wealth management business transformation, the company supplemented and revised the measures for the management of Everbright Securities Company Limited(601788) business department’s organizational structure and preparation, the measures for the management of agency sales of financial products, the detailed rules for the review of agency sales of private financial products and managers, the detailed rules for the management of the appropriateness of agency sales of private financial products, and the detailed rules for the implementation of customer return visit of agency sales of private financial products in 2021 Internal controls such as the procedures for handling risk events of private placement products sold on a commission basis and the measures for the management of investment consulting business (for Trial Implementation) to consolidate the foundation of risk management; Strengthen the construction of the organizational structure and post system of the business department suitable for the wealth management business, and promote the optimization of the talent structure of the business department; Establish a three-level training system of “headquarters branch business department”, organize publicity and education such as pre job, product and various business training, and regularly carry out self inspection and self correction of the implementation of marketing personnel management; Strengthen the audit and supervision of investment consulting products on the shelves, timely find and stop illegal practices, properly handle customer disputes, and continuously improve the internal control mechanism of wealth management business from the aspects of organizational structure, business operation, marketing management and customer service.
⑦ Financial innovation business
The company actively carries out the pilot of public fund investment consulting business, securities trading of Beijing stock exchange and other financial innovation businesses. In 2021, the company strengthened the internal control construction of innovation business from the aspects of risk assessment, compliance management, system construction and system construction, incorporated all kinds of innovation business into the comprehensive risk management system, promoted the continuous optimization of system processes, carefully assessed compliance risks, and strictly incorporated the construction of innovation business system into the company’s information system management system, which was unified by the company’s information technology department
