Individual investors' financial assets exceed 1000 million for the first time, and identification will be subject to special "care"

Securities Times reporter Xu Ying Liu Yiwen

Since February 2, the Administrative Measures for Securities Brokerage Business (hereinafter referred to as the "Administrative Measures"), which affect 28 licensed securities firms and 140,35 securities practitioners, have been officially implemented. The Securities Times reporter learned from the securities firm that in order to cooperate with the implementation of the management measures and guide securities firms to better carry out securities brokerage business, the regulatory authorities recently issued four self-discipline rules and solicited opinions from the industry.

Specifically, the Securities Association of China drafted the Detailed Rules for the Implementation of Securities Brokerage Business (Draft for Comments) and the Rules for the Management of Customer Fund Accounts of Securities Companies (Draft for Comments), and revised and formed the Necessary Provisions for Customer Account Opening Agreements of Securities Companies (Draft for Comments) and the Necessary Provisions for Securities Trading Entrustment Agency Agreements (Draft for Comments).

Financial assets exceeded 1000 million for the first time

Clarity on identification should be strengthened

Under the overall framework of the Administrative Measures, the Detailed Rules for the Implementation of Securities Brokerage Business (Draft for Comments) (hereinafter referred to as the "Implementation Rules") further clarify and refine the responsibilities of securities companies engaged in securities brokerage business around the connotation of securities brokerage business, urge securities companies to strictly perform their investor management duties, marketing management duties, compliance management duties, audit and audit duties, and strengthen the self-discipline management of securities companies.

The Detailed Rules for Implementation consist of six chapters and 27 articles, including general provisions, investor management, marketing management, safeguard measures, self-discipline management and supplementary provisions.

Specifically, the Detailed Rules for the Implementation specify the requirements for investor identification and stipulate the circumstances under which securities firms should re-identify investors, including: the amount of funds transferred is obviously inconsistent with the investor's asset income; The amount of funds transferred contradicts the information obtained such as the age, occupation, and registered capital of the investor; There are abnormalities in the amount, frequency and frequency of fund transfers; A large amount of funds transfer occurs after the idle account is activated; There are no substantial transactions and large fund transfers occur frequently.

The Detailed Rules also specifically mention that securities companies should strengthen the identification of institutional investors, individual investors in capital accounts and financial assets in securities accounts (excluding funds and securities integrated by investors through margin trading) exceeding RMB 1000 million for the first time.

The Detailed Rules also improve the requirements for return visits. First, it lists different types of return visit methods, and stipulates that the annual return visit ratio of securities companies shall not be less than 10% of the total number of customers (excluding dormant accounts and suspended trading account customers) at the end of the previous year. The second is to clarify the scope of the return visit of the new relevant trading authority, and set the access conditions for the new securities trading venue. Third, it is clarified that if a securities company entrusts a third-party institution to carry out investor return visits, it should strengthen the management of the third-party institution.

Do not maliciously solicit customers at low prices

The commission collection standard shall be made public

It is worth noting that in terms of marketing management, the Detailed Rules for Implementation further emphasize that unfair competition behaviors such as monopoly and malicious low-price solicitation shall not be carried out, and at the same time put forward requirements for the form of publicity of service cost estimation and commission collection standards. The Detailed Rules for Implementation point out that securities companies shall calculate service costs in accordance with scientific and reasonable methods, and the measurement methods shall be approved by the compliance department and shall not be arbitrarily changed once determined. A securities company shall simultaneously publicize the commission collection standards for trading varieties on the company's website, business premises, and client clients in the form of specific values or range ranges, and collect them according to the publicity standards.

At the same time, the Detailed Rules for Implementation specify the specific requirements for third-party media such as news media and Internet information platforms to place advertisements. Require securities companies to sign agreements with third-party carriers, which shall clearly stipulate that third-party carriers may only publish materials that have been reviewed by securities companies, and shall not advertise the business of securities companies, solicit or serve investors on behalf of securities companies in the name of individuals or third-party carriers. Any link of securities business, such as investor solicitation and receipt of trading instructions, shall be completed independently by the securities company, and third-party carriers shall not intervene.

In terms of the preservation of investor information, the Detailed Rules for Implementation require securities companies to properly keep information such as investors' identity information, securities transactions, and property status, and take effective measures to ensure the security of investor information. The retention period of the above information shall not be less than 20 years from the date of account closure.

The "Implementation Rules" also mentioned that there are currently more than 1,2 branches of securities companies, and the pressure on the routine audit of brokerage business departments and branches is greater. Taking into account the practice of securities companies, the Detailed Rules for Implementation stipulate that the frequency of routine audits and audits of securities companies of the securities brokerage business departments and branches of the headquarters shall be at least once every five years.

Securities companies should provide it prudently

Single-customer, multi-banking

The China Securities Association also issued the Rules for the Management of Customer Fund Accounts of Securities Companies (Draft for Comments) (hereinafter referred to as the "Rules").

In order to standardize the management of customer fund accounts of securities companies and better serve the needs of the reform and development of the securities industry, the China Securities Association drafted the Rules in accordance with relevant laws, regulations, regulatory provisions and self-discipline rules, on the basis of the 2013 version of the Specifications for Opening Customer Accounts by Securities Companies and combined with practical experience.

The Rules clarify the definition of capital accounts, further regulate the opening and continuous management of customer fund accounts of securities companies, require securities companies to strictly implement the responsibility of the real-name system of accounts, perform anti-money laundering obligations, respect the wishes of customers, protect the legitimate rights and interests of investors, and promote securities companies to be service-oriented, take the interests of investors as the center, and continuously promote the high-quality development of the industry.

The Rules further standardize the management requirements for single-customer multi-banking business. It is understood that in order to improve the efficiency of fund transfer and facilitate customer securities trading and fund aggregation, in 2010, according to market demand and industry voice, the China Securities Association organized and proposed a multi-bank business plan for third-party depository of customer transaction settlement funds. This business not only provides convenience for the majority of securities investors to provide funds transfer, but also poses challenges to the internal management of securities companies.

According to the China Securities Association, in view of the fact that some investors still have actual demand for such business, the Rules require securities companies to strengthen compliance management, while continuing to maintain the management requirements such as the number of banks contracted by the same customer should not exceed five, the transfer of funds between auxiliary fund accounts is strictly prohibited, and the transfer of funds between main and auxiliary fund accounts for non-transaction purposes is restricted. Strictly implement anti-money laundering monitoring and identification to prevent operational risks.

The Rules also improve the requirements for opening a fund account. The management regulations on the opening of capital accounts have been further improved in terms of account opening subjects, account opening methods, customer information understanding, and account identification. The requirements for the real-name system for accounts have been strengthened, and it has been clearly stated that customers who violate the provisions of the real-name system shall bear relevant legal liabilities; Clarify the scope of customer information that securities companies should know before opening a capital account for customers; At the same time, the management requirements for account identification, elderly accounts, and minors' accounts are refined.

Account Opening and Changes

Management is becoming more standardized

The China Securities Association has also revised the "Necessary Terms for Customer Account Opening Agreement of Securities Companies" and solicited public comments.

It is understood that this revision mainly follows three principles: First, strictly implement the requirements of the "Measures for the Administration of Securities Brokerage Business" and clarify the specific content of the necessary provisions. The second is to standardize the requirements for the whole process of opening, changing, canceling, using and managing customer accounts of securities companies. The third is to streamline the content of the terms, leaving room for securities companies to further enrich and improve the terms of the agreement in combination with the company's own business conditions, so as to facilitate the industry's reference and implementation.

In addition, the China Securities Association also stated that in recent years, with the continuous growth of the number of investors and investment scale, the continuous expansion of securities trading-related business scenarios and the rapid development of Internet technology, some provisions of the original "Guidelines for Securities Trading Entrustment Agency Agreements" are no longer applicable. In order to adapt to the above new situation, it is necessary to revise the original version of the agreement. On the basis of the Measures for the Administration of Securities Brokerage Business, this revision summarizes the practical experience of the securities industry and forms the Necessary Provisions for Securities Trading Entrustment Agency Agreement (Draft for Comments) (hereinafter referred to as the "Agency Agreement").

It is understood that the revision of the Agency Agreement strengthens the main business links related to securities transactions, such as account real-name system, appropriateness management, anti-money laundering, fund monitoring, and abnormal transaction management.