Recently, local securities regulatory bureaus have successively stepped up supervision in the field of private placement, and private placement subsidiaries of securities companies have not been able to escape the “legal net”.
On May 20, the official website of Jiangsu Securities Regulatory Bureau showed that due to the non-standard investment of some products and the failure to complete the rectification within the specified period, Jiangsu securities regulatory bureau took the supervision and management measures of issuing a warning letter to Huatai Zijin, a Huatai Securities Co.Ltd(601688) subsidiary. Huatai Zijin is required to attach great importance to and actively and orderly promote the standardized rectification of relevant products.
Entering 2022, the most important thing for financial institutions is the formal implementation of the new asset management regulations. Previously, during the transition period, the regulatory authorities required all institutions to formulate their own rectification plans and orderly reduce the scale of asset management plans that did not meet the regulations. The institutions that have not completed all the rectification so far have naturally received special attention from regulators.
Huatai Zijin encounter warning letter
On May 20, the official website of Jiangsu Securities Regulatory Bureau posted the decision on Issuing warning letter to Huatai Zijin Investment Co., Ltd.
Jiangsu securities regulatory bureau pointed out that by the end of 2021, some products of Huatai Zijin had invested in other asset management products other than public funds, and the standardized rectification had not been completed within the specified time limit. This situation does not comply with the relevant provisions of the measures for the administration of private asset management business of securities and futures operating institutions.
Therefore, Jiangsu securities regulatory bureau decided to take the supervision and management measures of issuing a warning letter to Huatai Zijin. In addition, Jiangsu securities regulatory bureau also requires Huatai Zijin to attach great importance to actively and orderly promote the standardized rectification of relevant products.
Article 44 of the measures for the administration of private placement asset management business of securities and futures operating institutions: the asset management plan accepts the participation of other asset management products. The securities and futures operating institutions shall earnestly perform their active management responsibilities, and shall not re entrust or re invest in other asset management products other than public funds.
It is not difficult to see that the above provisions are based on the prohibitive provisions of the “new asset management regulations” on “multi-layer nesting”.
Before the introduction of the new regulations on asset management, various financial institutions did not have unified regulatory standards in terms of qualified investors, investment scope and leverage constraints when carrying out asset management business, resulting in asset management products often circumventing relevant regulatory requirements through multi-layer nesting and channel business, that is, the so-called “regulatory product structure design”.
Based on this, the new regulations on asset management require that financial institutions shall not provide channel services to circumvent the regulatory requirements such as investment scope and leverage constraints for the asset management products of other financial institutions. Asset management products can be invested in another layer of asset management products, but the invested asset management products shall not be invested in asset management products other than public securities investment funds.
Most of the private placement subsidiaries of securities companies that once served as channel providers have similar situations, so they are required to be rectified by various regulators. During the transition period, the supervision requires all institutions to formulate their own rectification plans and orderly reduce the scale of asset management plans that do not meet the regulations. However, even if it is extended again and again, the transition period of the new regulations on asset management will officially end at the end of 2021. Institutions that have not yet completed rectification naturally receive special attention from regulators.
ranked the top three in the industry in the first quarter
As a private placement subsidiary of head securities companies, Huatai Zijin has made rapid progress in business in recent years.
According to public information, Huatai Zijin was established in August 2008 with a registered capital of 6 billion yuan. It is a private placement subsidiary of Huatai Securities Co.Ltd(601688) company.
The main business includes: equity investment, debt investment and investment in other investment funds related to equity investment and debt investment; Investment consulting, investment management and financial consulting services for equity investment and debt investment. In short, it is mainly the investment and management of private equity funds.
By the end of 2021, Huatai Zijin had total assets of 16.227 billion yuan and net assets of 11.502 billion yuan. In terms of performance, Huatai Zijin achieved an operating revenue of 935 million yuan and a net profit of 633 million yuan in 2021. Among Huatai Securities Co.Ltd(601688) numerous subsidiaries, the net profit level of Huatai Zijin is inferior to that of Huatai asset management, Huatai international, Huatai innovation, Huatai United Securities, etc., slightly higher than that of Huatai futures.
according to the annual report of Huatai Securities Co.Ltd(601688) 2021, as of the end of the reporting period, Huatai Zijin investment and its secondary subsidiaries, as managers, had a total of 22 private equity investment funds registered and existing in the China Foundation Association, with a total subscribed scale of 50.845 billion yuan and a total paid in scale of 41.774 billion yuan. The private equity investment fund has implemented 36 investment projects with a total investment amount of 1.162 billion yuan, all of which are equity investment projects.
Among Qingke’s “top 100 private equity investment institutions in China in 2021”, Huatai Zijin ranked 39th and ranked among the “top 50 state-owned investment institutions in China in 2021”. In 2022, Huatai Zijin invested in important projects such as tuogong Siasun Robot&Automation Co.Ltd(300024) , baisaifei biology and so on.
In terms of focusing on industries, Huatai Zijin said that it adheres to the guidance of industry positioning, based on industry research, focuses on industries in line with national industrial policies and national economic development strategies, and focuses on enterprises with high growth, high scientific and technological content, and in line with new economy, new services, new agriculture, new materials, new energy and new business models.
According to the private equity fund scale data of the private equity subsidiary of securities companies calculated by China Foundation Association, as of the first quarter of 2022, the average monthly scale of private equity fund managed by Huatai Zijin reached 42.165 billion yuan, ranking third in the industry after CICC capital under China International Capital Corporation Limited(601995) and Jinshi investment under Citic Securities Company Limited(600030) bannerP align = “center” the top 20 monthly average private equity funds of private equity subsidiaries of securities companies p align = “center” (the first quarter of 2022)
