Recently, the China Securities Regulatory Commission announced its reply to Recommendation No. 1029 of the Fourth Session of the Thirteenth National People's Congress.
In response to the reply entitled "Proposal on Strengthening Access Management for Financial Information Intermediary and Transaction Matching Service Institutions", the China Securities Regulatory Commission stated that it will promote the formulation of relevant regulations for securities companies to rent third-party online platforms to carry out securities business activities in due course. introduced.
As early as August 2020, the China Securities Regulatory Commission publicly solicited opinions on the "Regulations on the Administration of Securities Companies Leasing Third-Party Network Platforms to Carry out Securities Business Activities (Trial)" (hereinafter referred to as "Consultation").
Industry insiders said that the release of the final measures may have some changes compared to the solicitation of opinions.
It is understood that many brokerages now use third-party platforms to divert traffic, open accounts and even trade, and there are risks in compliance and data security.
This business has been in a grey area with no clear rules.
The "Consultation" aims to seek advantages and avoid disadvantages, build a feasible and reasonable operation model, clarify the bottom line of supervision, and bring relevant cooperation into the track of standardized and healthy operation.
Relevant regulations will be issued in due course
In August 2020, after the "Consultation for Comments" ended, many people in the industry began to look forward to the official implementation of the regulations.
Now there is finally further news: timely introduction.
It is common for securities companies to expand their businesses through third-party online platforms.
At present, on some portal websites and financial APPs, you can still see many brokerage advertisements or links for account opening.
Opening an account is one aspect, and some third-party platforms can also provide transactions.
An APP well-known to the public gathers dozens of brokerages, and you can directly trade after logging in to your account.
This kind of phenomenon of securities companies developing their businesses through third-party platforms has existed for a long time.
"Generally, they are actually doing it, but there is very little publicity. There has been no formal regulation or prohibition in this area, but it is more sensitive and is a gray area." An industry insider told reporters.
The above-mentioned person said that if the regulations are officially introduced, to some extent, the name of this business has been rectified, and securities companies can cooperate with third parties in a more standardized manner.
It is understood that the risk points of cooperation between securities companies and third-party platforms mainly include three aspects: the first is business compliance risk.
Relevant entities may take advantage of the opportunity to provide information technology services for securities companies to confuse the boundaries of business activities and technical services, and conduct securities business in violation of regulations.
The second is technical security and data security risks.
Relevant entities may illegally intercept and obtain sensitive data such as investor account opening and transactions, and their negative behaviors and technical risks may be transmitted to securities companies.
Finally, it may have an adverse impact on the industry ecology.
Relevant entities may take advantage of their dominant positions to obtain improper benefits, or conduct competitive quotations, which will affect the market order and damage the legitimate rights and interests of investors.
The "Consultation" also stipulates the transition period.
Before the implementation of these regulations, if a securities company has rented a third-party network platform to carry out securities business activities, it shall properly handle it, report the standard rectification plan for the existing business to the local CSRC office, and complete the rectification within one year from the date of implementation of these regulations. .
Before the rectification is completed, the securities company shall not add new customers or provide new services on the third-party online platform.
Clarify the cooperation boundary between securities companies and third-party institutions
The China Securities Regulatory Commission believes that the core of securities companies renting third-party network platforms to carry out securities business activities is to use information technology to improve the quality and efficiency of securities services, and its essence is finance.
Activities such as customer solicitation, customer service, and receiving transaction orders in the Internet environment are the onlineization of securities business and contain potential financial risks. They should be approved by the China Securities Regulatory Commission and hold relevant financial licenses before they can be carried out.
To this end, the "Consultation" will clarify the cooperation boundary between securities companies and third-party institutions as a key norm. Third-party institutions can provide information technology services such as cyberspace business sites, and shall not intervene in securities companies to provide securities brokerage and securities investment consulting to investors. any aspect of the related service.
The "Consultation for Opinions" regulates the behavior of exhibition industry.
The first is to ensure technical security. Securities companies should operate and manage relevant business information systems or functional modules independently.
The second is to do a good job of data isolation to ensure that third-party organizations do not contact and store related business and customer data.
Once again, it is to standardize the charging model and set the upper limit of fee payment.
The last is to maintain business independence, clarify investor protection measures, and clearly remind investors that the securities services are provided by securities companies.
The "Consultation" also calls for strengthening internal control.
The first is to require securities companies to conduct internal assessments, formulate business plans, and review them by the Information Technology Governance Committee.
At the same time, sign a written agreement with the relevant third-party organization to clarify the behavior that it is not allowed to engage in.
The second is to continuously track and evaluate the compliance and security of the third-party network platform as well as the implementation of the agreement between the two parties, and incorporate cooperation into the scope of the company's compliance and risk control.
Finally, do a good job of emergency management after the event and establish an exit mechanism.
Big V drainage account opening was stopped
In November last year, an internal circular issued by the regulator regulated the cooperation between securities companies and big V to carry out online live broadcasts, customer drainage and other activities, and clarified the corresponding regulatory requirements.
The supervision believes that it is not in compliance with the regulations for big V to attract and open accounts and reward them, and securities companies are not allowed to carry out relevant cooperation.
Article 33 of the "Regulations on the Supervision and Administration of Securities Companies" stipulates: "Securities companies shall not violate regulations by entrusting other units or individuals to carry out customer solicitation, customer service, and product sales activities." Article 38 stipulates: "Securities companies engage in securities brokerage. For business, persons other than securities companies may be entrusted as securities brokers to act on their behalf to conduct customer solicitation, customer service and other activities. Securities brokers shall have securities practice qualifications.”
Article 4 of the "Interim Provisions on the Administration of Securities Brokers" stipulates that "a securities broker is a securities practitioner and shall meet the prescribed conditions".
According to the supervision, the opening of an account is a kind of customer solicitation, which is a part of the securities brokerage business.
At present, the regulation only stipulates that securities companies may entrust securities brokers to act as agents for client solicitation activities, and securities brokers should be securities practitioners and be engaged in client solicitation and client service activities full-time.
Internet big Vs are not securities brokers specializing in securities brokerage business. It is not in compliance with the regulatory requirements for securities companies to use big Vs to attract traffic and open accounts to reward them, and securities companies should stop relevant cooperation.
The same is the network drainage, why does the supervision take a standardized management attitude towards platform drainage, but directly stop the big V?
"The third-party platform is rented by the brokerage, and the main body of the exhibitor is the brokerage itself, so it is possible. But if the big V diverts the flow, the main body of the exhibitor will become the big V himself. If the big V does not have the qualifications for securities business, then of course it is not legal. ” said a brokerage source.