The pace of comprehensive registration system is getting closer and closer. Investment banks have also accumulated a lot of experience and practices in the pilot process of the registration system in the past two years, which has laid a good foundation for the spread of the comprehensive registration system.
Recently, the China Securities Association released the 2021 report on Investor Service and protection of securities companies (hereinafter referred to as the report). While mentioning investor protection, the report also introduces the situation of investment banks welcoming the comprehensive registration system.
Some investment banks are shaping a brand-new quality control system, promoting the transformation of the focus of investment banks’ work from service “acceptability” to service “marketability”, and promoting the formation of an industry ecology that encourages “quality competition” and restricts “quantity competition”.
The registration system puts forward higher requirements for the sales capacity of investment banks. Some investment banks have set up experienced sales teams and completed the coverage of key fund companies, insurance companies, securities companies, trust companies, finance companies, QFII and private fund managers.
Many investment banks realize that under the background of the registration system, securities companies can no longer achieve a leap by fighting alone in the investment bank line. Therefore, while taking into account the reasonable interests of issuers, investors and sponsors, we should carry out closer coordination and cooperation with other branches and subsidiaries.
The core of the registration system, in the final analysis, is to compact the responsibility of intermediaries. Some investment banks strengthened risk control and continued to improve the risk control system of “no dead corner” investment banking business.
from “marketability” to “marketability”
The comprehensive registration system for stock issuance is gradually approaching. Securities companies actively strengthen internal quality control, improve practice quality, cultivate ideas, organizations and abilities matching the registration system, and give full play to the role of “gatekeeper of capital market”.
With the continuous transformation of investment banks into value-based and professional investment banks Gf Securities Co.Ltd(000776) continue to strengthen the construction of investment banking team, forge professional service capabilities such as research, pricing and sales, strengthen process and compliance management, further enhance project reserves and steadily promote the development of investment banking business by giving full play to the group’s synergy and platform advantages.
According to business planning and development needs, Gf Securities Co.Ltd(000776) step by step recruit all kinds of investment banking talents to join. By the end of 2021, Guangfa investment bank had nearly 600 professionals, including more than 180 insurance agents. The investment bank has more than 60 internal control personnel, which effectively ensures the investment of executive talents and the quality of project implementation. At the same time, strengthen talent training. Specifically, it includes: Taking “improving employees’ core abilities such as pricing and contracting” as the main line, organizing and carrying out professional ability training such as “Valuation Modeling” and “business demonstration”.
Gf Securities Co.Ltd(000776) actively responded to the practical needs of the reform of the comprehensive registration system and strengthened the construction of systems and mechanisms. Last year, a total of 33 investment bank business system documents were added or modified, covering multiple investment bank business links such as quotation, due diligence, hiring a third party, issuance, follow-up management and compliance risk control assessment, so as to comprehensively improve the effectiveness and pertinence of system construction.
The comprehensive registration system focuses on information disclosure, improves the substantive requirements for the return and due diligence of intermediaries, and puts forward higher requirements for the due diligence and risk identification of securities companies. At present, Gf Securities Co.Ltd(000776) has launched a series of intelligent system tools that can effectively support the due diligence and continuous supervision of investment banking business.
Changjiang Securities Company Limited(000783) said that for the comprehensive registration system, the company mainly made preparations from many aspects. In terms of specialty, Changjiang sponsors actively summarized their experience in the issuance of projects registered on the science and innovation board and the gem, and wrote the issuance manual for internal reference; At the same time, the existing distribution system is optimized, and the system supplier has been actively discussing the further upgrading of the distribution system in the future.
Changjiang Securities Company Limited(000783) emphasizes the professional competence of practitioners and internal control personnel. On the one hand, the quality control department regularly carries out multi-level training. On the other hand, the quality control department has formed the working habit of summarizing the summary of audit experience. Each auditor records the key matters encountered in his work one by one and shares them with the Department personnel.
In terms of system preparation, since the reform of the registration system, with the continuous implementation of new regulations, Changjiang sponsor has done a good job in revising the issuance system at the first time, and timely updated and improved the issuance workflow in combination with the latest regulatory requirements.
In order to shape the quality control system of the new investment bank, promote the transformation of the focus of the investment bank’s work from service “acceptability” to service “marketability”, and promote the formation of an industry ecology that encourages “quality competition” and restricts “quantity competition”, Changjiang sponsor actively adjusted the relevant systems of the company’s sponsor quality around the latest system. Up to now, a number of system revisions have been completed and the system reserve of quality control line has been successfully completed.
In terms of talents, under the registration system, higher requirements are put forward for the underwriting ability, pricing ability and sales ability of investment banks. Therefore, Changjiang sponsor has built an experienced sales team. At present, the Changjiang sponsor has completed the coverage of key fund companies, insurance companies, securities companies, trust companies, finance companies, QFII and private fund managers. The company also made great efforts to strengthen the personnel strength of the quality control department. After several rounds of enrollment expansion, the company added 5 people, all of whom are experienced senior people in the industry.
investment banks can no longer fight alone
Under the background of registration system reform, securities companies focus on strengthening the synergy of various business modules, forming an organic whole, realizing the coordinated development of the whole business chain, and better providing comprehensive financial services for investors.
Gf Securities Co.Ltd(000776) said that under the traction of the registration system reform, as the “gatekeeper” of the capital market, securities companies have become the key to the development of the direct financing system, and the company will accelerate the transformation to providing comprehensive and coordinated comprehensive financial services.
First, build a high-quality investment banking team, strive for the balanced development of equity, bonds, ABS and domestic and foreign linkage business lines, and provide investors with a variety of investment choices. Secondly, give full play to the platform advantages of comprehensive financial services and build a business ecosystem Gf Securities Co.Ltd(000776) will make use of the advantages of Guangfa Qianhe, Xinde, R & D center, fund and other platforms to continuously improve the research and judgment ability, investment value discovery ability and capital operation ability of the investment banking industry, and continuously deliver high-quality enterprises to the capital market by strengthening internal and external cooperation.
Thirdly, grasp the logic of industrial upgrading under the new economic background, focus on industries in line with the national strategic layout, continue to improve the ability to serve the real economy, help high-quality enterprises develop in the whole life cycle, and improve the return on investment of investors.
Galaxy Securities has fully established the investment and financing business development model of “theme Fund + base service”. Work closely with local governments to determine 20-40 comprehensive investment and financing service bases in prefecture level cities or municipal districts, top 100 counties and cities, group strategic customer gathering areas and other areas with investment and financing exhibition foundation, so as to build galaxy’s “base area” and form a business foundation with high-quality and sustainable development.
Galaxy Securities said that through various types of subordinate investment channels, shareholder investment channels, external specialized investment channels and other ways, it allocated more than 20 billion yuan of funds to jointly set up a base service theme fund with relevant subjects of local governments to directly serve the investment and financing needs of the region and alleviate the capital market financing problems of local industrial planning and social development.
Founder Securities Co.Ltd(601901) said that from the perspective of the whole business structure of securities companies, under the background of registration system, securities companies can no longer achieve a leap by fighting alone through investment banking lines. In fact, this puts forward higher requirements for the coordination ability of various lines of securities companies. Therefore, on the premise of compliance, the company takes into account the reasonable interests of the issuer, investors and sponsors, and carries out closer coordination and cooperation with other branches and Founder Securities Co.Ltd(601901) subsidiaries.
Founder Securities Co.Ltd(601901) said to coordinate the resources of various lines and build a whole industry chain of investment banks with equity financing, debt financing, M & a consulting, asset securitization and venture capital as the core. Securities companies can assist enterprises in raising funds during the start-up period, provide sponsor and underwriting services before listing, and provide services such as M & a consultation, additional issuance, market making, market value management and wealth management after listing, so as to realize the full cycle coverage of enterprise development.
strictly control the entrance of capital market
Under the registration system, securities companies should always adhere to “business development, internal control first”, run through the bottom line thinking awareness and risk control compliance requirements in all work, strictly close the entrance of the capital market, and escort the full implementation of the stock issuance registration system by selecting high-quality investable projects, strengthening capital standard guidance, doing a good job in investor protection and risk prevention and resolution.
Guotai Junan Securities Co.Ltd(601211) said that the core of the registration system is the responsibility of intermediaries in the final analysis. To promote the high-quality development of investment banking business, the fundamental guarantee lies in strengthening risk control. The investment banking division of the company continues to improve the risk control system of “no dead corner” investment banking business, ensure that there are no major risk events such as financial fraud (customer fraud), systemic risks and personnel violation of integrity, and protect employees, the company and customers.
Firstly, the overall risk control mechanism of investment banks has been continuously improved by strengthening the risk control responsibilities at all levels, formulating the risk management system of new business, improving the authorization management system, establishing a risk oriented performance appraisal mechanism, strengthening the risk reporting mechanism and other measures. Secondly, formulate investment banking operation guidelines and standardized business models according to business types, check omissions and fill vacancies, and form a set of perfect systems and processes.
Thirdly, for key areas and weak links, explore a set of scientific and practical professional technology from the aspects of risk identification and measurement, evaluation and decision-making, monitoring and reporting, control and disposal, accountability and education. Fourth, strengthen the construction of digital and intelligent risk control management platform. Fifth, compact the main responsibility of the audit, clarify the responsibilities of the main auditor, and strive to build a professional team of risk control. Finally, strengthen the publicity of risk management and control culture, strengthen risk performance evaluation and risk accountability management, and create a good risk management and control culture.
At the level of stock issuance in the primary market, Huatai Securities Co.Ltd(601688) insists on improving the company’s internal control process in advance and establishing an integrated risk prevention and control system; During the process, the company insisted on Further Strengthening the project quality control of the company, formulating multi-directional practice standards and process guidelines, establishing a difficult problem discussion mechanism, and providing sufficient technical support for project implementation; Standardization of project due diligence to provide basis and guarantee for the overall practice quality level; The project implementation is fully online, and the whole process is marked, monitored and traceable; Introduce intelligent applications to improve work efficiency and risk control ability. Afterwards, adhere to the establishment of a perfect practice evaluation and assessment accountability mechanism.
