Xinhua News Agency, Beijing, March 24 The China Securities Regulatory Commission (CSRC) announced on Thursday that it has issued a notice of administrative regulatory measures against Haitong Securities and Haitong Asset Management for failing to conduct prudent business operations, failing to effectively control and prevent risks, and failing to control and manage compliance risks during the investment advisory and private asset management business.
China Securities Regulatory Commission (CSRC) plans to take regulatory measures against Haitong Securities, including ordering Haitong Securities to suspend its bond investment advisory business for institutional investors for 12 months, increasing the number of internal compliance inspections and submitting compliance inspection reports. Haitong Asset Management was ordered to suspend the provision of investment advisory services for private equity management products of securities and futures operating institutions for 12 months, and to suspend the filing of new private equity management products for 6 months. A number of directly responsible persons and personnel with management responsibilities were identified as inappropriate candidates for 2 years and other regulatory measures were taken.
According to the investigation, Haitong Securities, Haitong Asset Management and relevant personnel failed to effectively control and prevent risks in accordance with the principle of prudent operation in the process of carrying out the business of investment advisory and private equity management, causing serious negative impact on the market. In December 2019, after the CSRC guided the Shanghai and Shenzhen Stock Exchanges to issue the Notice on Regulating Matters Related to Corporate Bond Issuance, Haitong Securities and Haitong Asset Management were still lucky enough to continue to engage in relevant violations in other trading markets.
At the same time, Haitong Securities and Haitong Asset Management did not include relevant business behaviors into the comprehensive compliance risk control system, there were loopholes in business isolation, conflict of interest prevention, bond trading management and other aspects, and the compliance risk control mechanism of the company was lacking. According to the facts of violations and relevant regulations, the CSRC intends to take the aforementioned regulatory measures against Haitong Securities and Haitong Asset Management, and severely punish the relevant responsible personnel.