According to the administrative penalty information published on the website of the China Banking and Insurance Regulatory Commission on June 2, Bank of China, China Everbright Bank, Bank of China Wealth Management, and Everbright Wealth Management were fined a total of 14.9 million yuan, of which two wealth management companies were fined a total of 8.9 million yuan.
It is worth noting that this is also the first time that the wealth management company has received a fine since its establishment.
Wealth management business has violations of laws and regulations
According to the fine, Bank of China was fined 2 million yuan, and the cause of the case was that there were violations of laws and regulations in the wealth management business of Bank of China, and the scale of old products rebounded at some points in time.
Bank of China Wealth Management was fined 4.6 million yuan. The reasons involved include: the market value of a single security held by a public wealth management product exceeds 10% of the net assets of the product; the market value of a single security held by all public wealth management products exceeds 30% of the market value of the security; The leverage level of open-ended public offering wealth management products exceeds the standard; the transactions involving the same counterparty and the same underlying assets under the same contract are unfair; the investment assets of wealth management products are valued by the amortized cost method in violation of regulations; the identification of related legal persons by wealth management companies is inconsistent regulatory requirements.
Everbright Bank was fined 4 million yuan. The reasons involved include: the scale of old products rebounded at some points in time, the custodian institution failed to detect the concentration of wealth management products exceeding the standard in time, and the custody business violated the requirements of asset independence.
Everbright Wealth Management was fined 4.3 million yuan. The cases involved include: the market value of a single public securities investment fund held by a public wealth management product exceeds 10% of the net assets of the product; the market value of a single securities held by all public wealth management products exceeds the market value of the security. 30%; the proportion of high-liquidity assets held by open-ended public wealth management products does not meet the standard; the use of third-party mobile office platforms has hidden risks, and the effectiveness of information system management and control is insufficient; the publicity of wealth management products is inconsistent and inaccurate.
Everbright Financial Services responded:
Implement rectification in strict accordance with regulatory requirements
On June 2, Everbright Financial Management responded to the regulatory penalty, saying that Everbright Financial Management attaches great importance to the opinions and criticisms raised by regulatory agencies, formulates rectification measures one by one, and conducts investigations and changes during the on-site investigation process, except that the safety management and control of the mobile office platform is in progress. Continuous optimization and rectification at home and abroad, and other problems have been rectified in place.
Everbright Wealth Management stated that at present, the wealth management products managed by the company are operating in an orderly and stable manner.
In the future, Everbright Wealth Management will further improve its ideological understanding, adhere to the principles of maximizing the interests of investors and prudent and stable operation, implement rectification in strict accordance with regulatory requirements, continue to strengthen internal control management and risk management and control, strengthen the construction of systems and mechanisms, and promote the compliant operation of various businesses. Fully implement the national financial development strategy and relevant requirements of regulatory policies, support the real economy, serve market players, and contribute to the preservation and appreciation of investors' wealth.
What regulatory signals are revealed?
According to industry analysts, by the end of 2021, the rectification of the existing wealth management business has been basically completed, and the financial chaos has been fundamentally reversed.
The transformation of the net value of products has achieved positive results, and the industry ecology has been gradually formed.
The corporate governance and internal control management of wealth management companies have been gradually improved, and the quality and efficiency of serving the real economy have been significantly improved.
Dong Ximiao, chief researcher of China Merchants Union Finance, said that issues such as the market value of a single security held by public wealth management products, the leverage level of wealth management products exceeding the standard, and the proportion of highly liquid assets not meeting the standards reflected in the fine mainly affect the liquidity and robustness of wealth management products. .
In recent years, with the accelerated transformation of wealth management products into net worth, the connection between wealth management products and the financial market and other asset management products has increased, placing higher requirements on product liquidity and robustness management.
In addition, the illegal use of the amortized cost method for valuation may make the valuation of wealth management products inaccurate, and it is difficult to timely and accurately reflect the changes in the value of the underlying assets.
Inconsistent and inaccurate publicity of wealth management products may mislead investors and influence investors to make correct investment decisions.
In terms of valuation, analysts emphasized that the regulatory authorities urge institutions to improve the valuation and accounting system, adopt scientific and reasonable valuation methods, strictly regulate the generation of net value of wealth management products, timely reflect the benefits and risks of financial assets, and convey the truth and accuracy to wealth management investors. The net worth fluctuates, establishes a scientific view of risks and returns of financial products, and promotes the breaking of expectations.
For wealth management companies, Dong Ximiao believes that compliance awareness and risk awareness should be enhanced, the rectification of violations should be accelerated, and the whole process of wealth management product development and sales should meet the requirements of the rules and regulations, so as to promote the healthy and sustainable development of bank wealth management.