China Securities Journal Peng Yang
Sun Tianqi, director of the Financial Stability Bureau of the People's Bank of China, recently wrote in "China Finance" that finance, as a licensed industry, must be licensed to operate.
Financial products are "exclusive products", which cannot be sold by any institution, nor can they be sold to anyone they want, nor can they be bought by anyone who wants to buy them.
"Big V" selling financial products through social media must be licensed, otherwise it is an illegal financial activity.
At the same time, Sun Tianqi said that some overseas securities business institutions that use Internet platforms to provide overseas securities investment services to domestic investors without obtaining relevant domestic licenses and only hold overseas licenses should be identified as "driving without a license" in my country. , suspected of illegal financial activities.
Some cross-border Internet brokers
Should be considered to be "driving without a license" in the country
Sun Tianqi pointed out that cross-border financial services in the digital environment mainly include banking services such as cross-border opening of bank accounts, cross-border securities investment services, cross-border sales of insurance products, cross-border payment services, cross-border bitcoin, ICO transaction services and cross-border Forex margin trading.
In terms of cross-border securities investment services, some overseas securities business institutions use Internet platforms to provide overseas securities investment services to domestic investors without obtaining relevant domestic licenses and only hold overseas licenses, which belongs to the category of "cross-border delivery". It exceeds my country's commitment to opening up under the framework of the General Agreement on Trade in Services.
In terms of business substance, these cross-border Internet brokerages should be identified as "driving without a license" in my country and suspected of illegal financial activities. This characterization has nothing to do with whether the capital account is fully convertible.
For example, Sun Tianqi said that some overseas brokerage subsidiaries of Chinese-funded securities companies (holding overseas licenses) cooperate with overseas subsidiaries of Chinese-funded banks (holding overseas licenses), using APP to provide bank-securities-like transfer services, enabling domestic customers to participate in overseas stocks. invest.
In terms of specific operations, domestic investors remotely open accounts with overseas securities companies through the APP, and overseas securities companies apply to overseas banks for sub-accounts of the same name on behalf of their clients.
After domestic investors purchase foreign exchange at domestic banks (usually falsely reported for private travel, etc.) and remit them to overseas bank accounts, the APP will display the credited amount for domestic investors to conduct transactions.
Such institutions have various disguised solicitation and marketing behaviors in China.
Since the parent company of the Chinese-funded securities firm is a domestic licensed institution, this model is more confusing, but the relevant cross-border financial services have not been approved, and they have also broken through the current opening rules for securities investment under individual items, and should be identified as illegal financial activities.
Internet platforms carry out agency savings business without approval
Illegal financial activity
In terms of selling financial products to the public and the whole network, Sun Tianqi believes that it includes deposits from third-party Internet platforms, public funds that can be sold online, public bank wealth management products, and Internet insurance.
In terms of deposits on third-party Internet platforms, Sun Tianqi believes that the deposit business of third-party Internet platforms has the following hidden risks.
First, the Internet platform conducts the agency savings business without approval, which is an illegal financial activity.
This is not a "red light" question of whether the interest rate is compliant, but a "black car" that is on the road without a license.
Second, local corporate banks use the Internet platform to break through the regional restrictions and regulatory constraints of operation.
Relevant institutions and platforms cooperate to absorb deposits and issue loans across regions, which deviates from the business positioning of serving the local area.
The third is that small and medium-sized banks use the Internet platform to attract deposits at high interest rates, which intensifies asset-side risks.
Fourth, the third-party Internet platform deposits of high-risk small and medium-sized banks account for about half of the country's total, showing the phenomenon of "bad money drives out good money" and the lemon market effect to a certain extent.
For deposits on third-party Internet platforms, in January 2021, the People's Bank of China and the China Banking and Insurance Regulatory Commission issued a notice clarifying that commercial banks are not allowed to conduct time deposits and fixed-life dual convenience deposits through third-party Internet platforms, and the existing business will be settled naturally after expiration.
Offsite deposits from third-party internet platforms are also prohibited.
After that, the financial management department required local corporate banks not to open deposits in different places in various ways, and cross-regional deposits on self-operated platforms of relevant commercial banks were also prohibited.
Is it necessary to establish a deposit brokerage business license, and can Internet platform companies operate the deposit business?
Sun Tianqi believes that from the perspective of corporate governance, external constraints, the effectiveness of micro-supervision, investor maturity and risk disposal mechanisms for small and medium-sized banks, it is not appropriate to establish a deposit brokerage license at present.
In terms of public offering bank wealth management products, at present, only bank wealth management companies and banking financial institutions that take deposits from the public can sell bank wealth management products as agents, and there is no independent sales license.
In May 2021, the "Interim Measures for the Management of the Sales of Wealth Management Products of Wealth Management Companies" issued by the regulatory authorities stipulates that without permission, no non-financial institutions and individuals are allowed to sell wealth management products on an agency basis.
Can Internet platform companies get involved in the sales of wealth management products?
Sun Tianqi believes that, in principle, public wealth management products are publicly offered asset management products, and from the perspective of unified supervision, when conditions are ripe, they can be managed as public funds.
However, it should also be considered that at present, bank wealth management products are still in the process of transformation and development, and the regulatory rules are constantly being improved. Objectively, investors still have different understandings of financial products with bank backgrounds and those of non-bank institutions. Therefore, at this stage, it is recommended to still Careful study is required.
Domestic Prohibited Financial Business
Overseas institutions are not allowed to operate in China
"Financial licenses have national boundaries." Sun Tianqi said that expanding the opening of the financial industry is an inevitable requirement for building a new development pattern, but overseas institutions must abide by domestic regulatory rules when conducting business in China.
For financial business that has been opened to the outside world, overseas institutions must hold relevant domestic licenses to operate legally and compliantly.
For financial business that is prohibited in China, and financial business that is not open to the outside world, overseas institutions are not allowed to operate in China.
It is illegal financial activities for overseas institutions to engage in prohibited financial business that is not open to the outside world, or only hold overseas licenses to conduct business in China.
Sun Tianqi emphasized that the licenses of most small and medium-sized institutions in China also have geographical restrictions.
If a financial institution only holds a license to operate in a certain area, it cannot operate in the whole country.
National financial licenses can only be issued by the central financial management authority.
Some financial products or services can only be provided to specific objects, and they must be resolutely implemented in the digital environment, and cannot be sold indiscriminately across the network.
Sun Tianqi pointed out that the following three points should be achieved when selling private equity products to specific objects.
First, the sales must be licensed.
For non-licensed Internet platforms that directly display or introduce or promote private equity products without going through the pages of licensed institutions, they should be strictly identified as illegally engaging in financial product sales activities, and they should be severely investigated and punished in accordance with the law.
Second, the requirement that specific objects are visible should not be relaxed.
Private placement products should not be advertised indiscriminately on the Internet, and cannot be seen by everyone, but only by specific objects. The rules for determining "specific objects" on the Internet should be prudent and cannot be ignored.
Third, the certification of qualified investors in the purchase process is the key.
The certification of qualified investors online and offline should be consistent.
The division of responsibilities between financial institutions and agency agencies should be clear.
In addition, Sun Tianqi said that under the conditions of the digital economy, the realization of the geographical boundaries of financial licenses and the boundaries of customer groups requires the efforts of the regulatory authorities.
Functional supervision must be implemented. It cannot be said that "the license plate is not issued by me, it is not under my control", and people are in the "position".
To crack down on illegal acts on the Internet platform, we must "hit early" and "hit small", because the spread and expansion on the Internet is very fast.
If the pre-reaction is slow and the post-event is passively disposed of, the cost of public funds in post-event disposal, the financial cost of individual consumers and individual investors, and the resource consumption of regulatory authorities and public security departments will be huge.
Violations of laws and regulations and illegal financial activities must be severely punished, and criminal and civil responsibilities must be strictly investigated.