The China Securities Regulatory Commission has stated that the next step will be to conduct in-depth research on the relevant regulations on stock trading for securities practitioners.
Securities Times reporter Hu Feijun and Sun Xiangfeng
Strong supervision has never been "dropped", but employees of securities companies are still prohibited from trading stocks illegally.
Recently, a person familiar with the matter broke the news that at least 5 employees of Donghai Securities, Henan Yanshi Shangdu Road Securities Business Department have violated the rules of financial management and stock speculation.
After receiving the anonymous report, Donghai Securities Brokerage Business Headquarters and other departments conducted an investigation and verification, and imposed penalties on the above-mentioned five employees, as well as the person in charge of the business department and the compliance personnel of the business department, with a fine ranging from 2,000 to 5,000 yuan. etc., and fired 1 temp.
"After investigation, the daily compliance management of the business department is relatively sound, there is no organized violation of discipline and regulations, and only individual employees' mobile phones have transaction records. According to the investigation results and the company's accountability system, the company has imposed accountability and punishment on relevant personnel. ." Facing the interview of the Securities Times reporter, Donghai Securities also responded.
It is a commonplace for securities practitioners to speculate in stocks illegally.
On the eve of the National People's Congress and the National People's Congress, there have also been discussions in the market on whether securities practitioners should be allowed to buy and sell stocks.
On February 18, the China Securities Regulatory Commission said in response to the proposal of the relevant National Committee of the Chinese People's Political Consultative Conference that the next step would be to in-depth study of the relevant regulations on the stock trading of securities practitioners, to further strengthen the refined management of securities practitioners, and to strengthen the internal management and external restraint mechanisms of securities companies. , on the basis of gradually consolidating the industry culture of "compliance, integrity, professionalism and stability", research and promote relevant work.
1 fired, 6 fined
"It can be said that many employees of Donghai Securities Yanshi Shangdu Road Securities Business Department have been trading stocks illegally for a certain period of time. After they were finally reported to the headquarters compliance department, the headquarters went to the business department for joint investigation." A person familiar with the matter told the Securities Times reporter Say.
According to the information provided by the person familiar with the matter, in June 2021, Donghai Securities Brokerage Business Headquarters issued a decision to deal with 7 people including Chen Moumou, an employee of the securities business department of Yanshi Shangdu Road, and listed the relevant penalties in detail.
The punishment decision shows that from May 24 to 26, 2021, Donghai Securities Brokerage Business Headquarters jointly dispatched the Disciplinary Inspection Team and the Compliance Management Department to set up a special investigation team to conduct on-site investigations on the Yanshi Shangdu Road Securities Branch.
According to the investigation results and the relevant provisions of the "Implementation Rules for Compliance Management of Donghai Securities Brokerage Branches", the relevant personnel of the business department are to be dealt with as follows:
1. Chen Moumou acted in financial management on behalf of customers, and conducted stock trading operations for most of the customers under his name. The facts are clear, the evidence is indeed sufficient, and the nature of the violation is serious, so it is decided to terminate the labor contract with Chen Moumou;
2. Wu Moumou, Cui Moumou, Wang Moumou mobile phones have customer transaction entrustment records, and some have stock transaction entrustment records, and I cannot provide relevant proofs, completely ruling out the suspicion of valet operation, so Wu Moumou and Cui Moumou respectively deducted and fined. XX and Wang have salaries of 5,000 yuan, 4,000 yuan, and 4,000 yuan;
3. Duan Moumou logged in on-site for a TradeStation client and started the automated trading program, so Duan Moumou’s salary was deducted by 4,000 yuan;
4. Gao Moumou, the head of the sales department, as the team leader during the period of employee violations, bears direct responsibility for the management of employee behavior, so Gao Moumou’s salary is deducted and fined 5,000 yuan;
5. Wang Moumou, a compliance manager of the business department, failed to perform his daily supervision and inspection duties, so Wang Moumou’s salary was deducted and fined 2,000 yuan.
At the same time, Donghai Securities Brokerage Business Headquarters stated in the handling decision that all branches should take a warning, strengthen the standardized management of the practice behavior of branch personnel, establish the concept of compliance practice for all employees, and comprehensively improve the branch's awareness of compliance and risk control. , earnestly study the cases of violations of the code of conduct of employees, earnestly implement the work of self-inspection and self-correction of the code of conduct of employees, and resolutely prevent and eliminate the occurrence of violations of laws and regulations such as wealth management on behalf of customers and employee stock speculation.
"Donghai Securities Yanshi Shangdu Road Securities Sales Department has a lot of stocks, and finally dealt with one temporary worker, and the rest of the staff were fined internally and covered with a 'pot cover'." The above-mentioned insider believes that such a treatment is unreasonable.
The Securities Times reporter noticed that according to the information of practitioners published on the official website of the Securities Association of China (hereinafter referred to as "China Securities Association"), among the above-mentioned punished employees, Chen Moumou, the first punished, did not have relevant public information, that is, he belonged to the company. The "temporary workers" described by people familiar with the matter, and the employment information of other punished personnel are published on the official website of the China Securities Association.
There are no organizational violations
According to the 2020 annual report of Donghai Securities, as of the end of 2020, the company had a total of 70 securities branches, located in 20 provinces across the country.
According to the organizational structure, the company's brokerage business headquarters is an important department at the same level as the research institute and institutional business department, while the Yanshi Shangdu Road Securities Business Department belongs to the brokerage business headquarters.
Does Donghai Securities Yanshi Shangdu Road Securities Branch conduct collective stock speculation by employees, and whether to punish and report to the regulatory authorities in accordance with compliance requirements after violations?
Donghai Securities responded to the Securities Times reporter.
After receiving an anonymous report in 2021, the company's leaders attached great importance to it. After research, the brokerage business headquarters jointly dispatched the discipline inspection and supervision team and the compliance management department to set up a special investigation team to conduct on-site investigations.
After investigation, the daily compliance management of the Yanshi Shangdu Road Securities Branch was relatively sound, and there was no organized violation of discipline and regulations. Only the mobile phones of individual employees were found to have transaction records.
According to the investigation results and the company's accountability system, relevant personnel have been punished.
The team of lawyers Liu Xiaoan and Wang Xuemei of Beijing Yingke (Shenzhen) Law Firm told the Securities Times reporter that, according to Article 136 of the Securities Law, “Practices of securities companies shall not accept the entrustment of clients to buy or sell securities in private”, and business The behavior of the employees of the Ministry of Finance on behalf of customers violates the above provisions.
Article 40 of the "Securities Law" stipulates that "employees of securities trading venues, securities companies and securities registration and clearing institutions, etc., shall not directly or under a pseudonym or in the name of others hold, buy or sell stocks or other securities during their term of office or within the statutory period. Securities of the nature of equity shall not be accepted as gifts from others or other securities of the nature of equity. When anyone becomes a person listed in the preceding paragraph, the stocks or other securities of the nature of equity that they already hold must be transferred in accordance with the law ." The employees of the sales department obviously violated the above-mentioned regulations by doing financial management on behalf of customers and investing in stocks by themselves.
At the same time, Donghai Securities Brokerage Business Headquarters has imposed internal fines and penalties after verifying that its business department has violated the rules of stock trading. Is it compliant and should it be reported to the regulatory authorities?
Article 15 of the "Measures for the Compliance Management of Securities Companies and Securities Investment Fund Management Companies" stipulates that "If the person in charge of compliance discovers that a securities fund operating institution has any violation of laws and regulations or potential compliance risks, he shall promptly report to the board of directors, the board of directors, The person in charge of operation and management shall report, put forward handling opinions, and supervise rectification. The person in charge of compliance shall also urge the company to report to the relevant CSRC office in a timely manner; if the company fails to report in time, it shall report directly to the relevant CSRC office; Relevant behaviors that violate industry norms and self-discipline rules should also be reported to relevant self-discipline organizations.”
Based on this, the team of lawyers Liu Xiaoan and Wang Xuemei believe that it is illegal for the employees of the above-mentioned business departments to pay only internal fines. The department makes administrative supervision measures.
Securities Times reporters browsed the official website of the Jiangsu Securities Regulatory Bureau and the official website of the Henan Securities Regulatory Bureau, where the Yanshi Shangdu Road Securities Business Department is located, and did not see that the regulatory authorities have issued relevant punishment information to Donghai Securities and the business department about employees' illegal stock speculation.
In addition, the above-mentioned lawyers also stated that, according to the relevant provisions of the "Securities Law", whoever directly or under a pseudonym or in the name of others holds, buys and sells stocks or other securities of the nature of equity, shall be ordered to deal with the illegally held stocks and other securities of the nature of equity. If the securities are purchased, the illegal gains will be confiscated, and a fine of less than the equivalent value of the securities will be imposed.
It is obviously inappropriate for Donghai Securities to impose an internal fine of 2,000 to 5,000 yuan on the illegal employees of the Yanshi Shangdu Road Securities Sales Department.
According to the above provisions, the supervisory authority may confiscate the illegal income of the illegal employees of the business department and impose a fine of less than the equivalent of the securities sold.
What is the reason for the repeated prohibitions
The predecessor of Donghai Securities was Changzhou Securities established in 1993.
In May 2003, when the industry tide turned, Changzhou Securities changed its name to "Donghai Securities Co., Ltd.", and in July 2013, it was restructured to "Donghai Securities Co., Ltd.".
In July 2015, Donghai Securities landed on the New Third Board and ranked first in net profit that year, becoming the leader of the New Third Board.
Regarding the prevention of violation risks of securities companies' branches, Donghai Securities told the Securities Times reporter, "The company has always attached great importance to compliance management, especially the compliance management of front-line employees in branches, and has always regarded compliance risk management as the lifeline of the company's development. In recent years, the company has strengthened the management of employees' behavioral norms by improving the system and mechanism; strengthening special training to strengthen employees' awareness of norms; regularly organizing self-inspection and self-correction from point to surface to find weak links in management; regular compliance inspections and unannounced inspections , to detect problems in a timely manner and handle rectification to ensure the stable and compliant development of various businesses.”
In fact, the securities industry practitioners illegally speculating in stocks has not disappeared.
On January 11 this year, Anhui Securities Regulatory Bureau issued a ticket No. 1 of 2022. Cinda Securities Huaihe Road Branch in Bengbu was held accountable for violations 8 years ago: first, selling multiple financial products in violation of regulations, and second, practicing against employees Behavior lacks effective restraint.
As early as half a year ago, the Anhui Securities Regulatory Bureau issued a ticket to the employees of the brokerage business department for illegal stock trading.
In June 2021, Zhou Mou, an employee of Cinda Securities, was fined 200,000 yuan for illegally buying and selling stocks by borrowing someone else's account.
It is worth mentioning that the employee borrowed as many as 15 accounts and lost more than 6.42 million yuan in stocks.
In December 2021, an administrative penalty notice disclosed by the Guangdong Securities Regulatory Bureau showed that Luo, a former employee of CIC Securities, and his ex-husband illegally borrowed other people’s accounts to speculate in stocks during his career, with a total turnover of 684 million yuan and an overall transaction loss, and was eventually fined 35 million.
In September 2021, the Hunan Securities Regulatory Bureau issued an announcement on administrative supervision measures. Xu Mouye, the head and general manager of the securities business department of Fangzheng Securities Jishou Renmin Road, was held by the Hunan Securities Regulatory Bureau for a regulatory conversation due to the behavior of borrowing others' names to buy and sell stocks.
In May 2021, the Qingdao Securities Regulatory Bureau issued an administrative penalty decision and decided to file a case for investigation into Yang Moujun's alleged illegal trading of stocks and illegal securities subscription and trading for clients.
From November 13, 2015 to March 15, 2019, Yang Moujun was a securities practitioner and served as the broker of Shenwan Hongyuan Qingdao Minjiang Road Securities Branch, Century Securities Qingdao Hong Kong East Road Securities Branch Financial Consultant, etc. Borrowing other people's accounts to speculate in stocks.
"Lawyers deal with cases every year in which securities practitioners are subject to regulatory penalties or assume compensation liability for illegal stock trading." The team of lawyers Liu Xiaoan and Wang Xuemei told the Securities Times reporter that the reason for the frequent occurrence of such illegal stock trading lies in the lack of compliance of securities company practitioners Consciousness, there is a fluke mentality, and there is a lack of clear understanding of the legal consequences.
The above-mentioned lawyers stated that illegal stock trading on behalf of customers will also result in regulatory penalties for the relevant responsible personnel and the securities company where they work. If the customer loses, it will also cause disputes between the customer and the securities company, triggering lawsuits, and the practitioners or securities companies will have to bear the corresponding responsibility. liability for compensation.
Therefore, securities companies should strengthen the management of employees, improve employees' awareness of compliance, resolutely eliminate all kinds of violations of laws and regulations, increase investor education efforts, and help investors establish a healthy and rational investment philosophy.
Regulation is under study
Employee stock speculation
According to the current regulations, securities practitioners who speculate in stocks illegally will inevitably be punished if they are caught.
Will the situation change in the future?
On the eve of the opening of the National Two Sessions this year, the China Securities Regulatory Commission disclosed its replies to the relevant motions and proposals of the representatives and members of the Two Sessions, which focused on the in-depth study of the relevant regulations on the stock trading of securities practitioners in the next step.
On February 18, in the Proposal No. 1820 (No. 198 of Finance, Taxation and Finance) of the Fourth Session of the Thirteenth National Committee of the Chinese People's Political Consultative Conference, a member of the Chinese People's Political Consultative Conference submitted the "Proposal on Improving the Stock Trading Supervision System for Securities Practitioners", which proposed It is necessary to further improve the three aspects, namely: the regulations for practitioners to buy and sell stocks, the definition of insiders of inside information, and the strengthening of penalties for violations of laws and regulations.
Securities Times reporters have learned from many sources that the committee member who put forward the "Proposal on Improving the Stock Trading Supervision System for Securities Practitioners" is a senior executive of securities practitioners - member of the National Committee of the Chinese People's Political Consultative Conference and director of Zhongtai Securities Feng Yidong.
Feng Yidong said that the original intention of prohibiting securities practitioners from buying and selling stocks was to prevent practitioners from taking advantage of information to seek illegitimate benefits, and to avoid insider trading and conflict of interest transactions that would damage the rights and interests of ordinary investors.
However, there are very few securities practitioners who have the opportunity to access inside information, and the "one-size-fits-all" prohibition that does not distinguish the specific business of the practitioner does not conform to the principle of appropriate supervision.
In response to the above problems, the China Securities Regulatory Commission reviewed and responded to some existing regulatory regulations and measures taken by the regulators, and stated that the next step would be to conduct in-depth research on the relevant regulations on the stock trading of securities practitioners, further strengthen the refined management of securities practitioners, and strengthen the internal management of securities companies. Management and external restraint mechanism, on the basis of gradually consolidating the industry culture of "compliance, integrity, professionalism and stability", research and promote relevant work.
Relevant lawyers believe that securities companies still need to prevent the company’s compliance and reputation risks caused by employees’ illegal stock trading in many ways: on the one hand, it is necessary to strengthen the management of practitioners’ practice behavior, and to inform them in writing of their code of conduct; On the other hand, when concluding securities trading entrustment contracts with customers, risk warnings should be prepared. The content of risk warnings should cover that customers should not be privately accepted or acted on their behalf. At the same time, transaction statements are regularly sent to customers, and customers are requested to confirm and sign the relevant transactions on the statement.
In addition, securities companies should strengthen the monitoring of abnormal transactions, check in a timely manner when abnormal transactions are found, and do a good job in returning customers.
By monitoring the IP and MAC addresses of the customer's entrusted order, the abnormal transaction behavior of employees who violate the regulations and act on behalf of customers can be detected in a timely manner.
Once discovered, it is necessary to take effective measures to investigate and deal with it in a timely manner.