The Revision Of The Rating Rules And The Revision Of The Compliance Control Points Of The Securities Companies

The supervision of securities firms' wind control is going to a new level.

Recently, the regulatory authorities issued the "Regulations on the classification and supervision of securities companies" (hereinafter referred to as the "Regulations") to the various brokerages, and updated the classification and grading indicators.

It is noteworthy that in this amendment, 3 of the four major provisions involve wind control and compliance, focusing on the compliance control capability of securities dealers, adjusting the standard of addition and subtraction, and guiding securities companies to continuously enhance the ability of wind control compliance management.

In fact, in recent years, the ability of risk control has increased.

In twenty-first Century, the economic report reporters found that in the 20 mainstream listed brokerages that had published annual reports, the total business income was 299 billion 573 million yuan, of which the credit impairment was 14 billion 323 million yuan, accounting for 4.78%. In 2018, the ratio was 5.18%. This figure shows that the overall income structure of brokerages is changing well.

Among them, 10 brokerages accounted for a downward trend in the proportion of credit impairment losses, and the top three of the decline were: CITIC construction (-11.01%), Hongta securities (-5.83%) and Bank of China Securities (-5.51%). That means that the improvement trend of the income structure of these three brokerages is more significant.

In addition, Huatai Securities, GF Securities, China Merchants Securities, China Galaxy 4 brokerages operating income for over two consecutive years, more than 10 billion, credit impairment ratio is also at a low level.

With the "securities companies classified supervision requirements (Draft)" and the supervision of the pilot scheme, the regulatory authorities in the future to guide the wind control of brokers will go to a higher level.

Strengthen the risk control guidance of brokers to go up the steps again

The provisions of the revised provisions include: risk management capability bonus points, continuous compliance status deduction points, market competitiveness evaluation index, risk management capability evaluation index and standard.

Among them, 3 of the four main provisions relate to wind control and compliance. The rules include the addition of wind control personnel and the addition of new indicators for wind control. We should strengthen capital constraints, abolish the bonus points of net capital absolute number, assess the effectiveness of reputation risk management system, and monitor the effectiveness of abnormal transactions.

According to the regulations, if a major risk event occurs during the evaluation period or a serious failure of corporate governance and internal control is seriously affected, the company's classification results will be reduced by 1 or 2 levels depending on the circumstances, and the processing basis for the reduction of the information level of the company or its shareholders is not disclosed or reported to the controlling shareholders and the actual controllers.

Insiders believe that this represents the regulatory authorities on the securities business of wind control guidance in 2020 to a higher level.

Looking back on the data of each brokerage business in 2019, although the 20 brokerages in the statistics have more than half of the brokerage's credit impairment losses, the proportion of total business revenue has declined. However, there are still 10 brokerages' revenue structure has not improved, and the proportion of the credit loss impairment of the securities companies has increased by 9.39%.

This means that many brokerages still need more efforts in strengthening wind control.

Even the securities firms that have been recognized by wind control capabilities have not had to relax. In 2019, Huatai Securities and GF Securities were among the two hundred million brokerages whose operating losses were over 10 billion.

The risk management department of Huatai Securities said that with the accelerated two-way opening of capital markets, a broader space for the internationalization of securities institutions has been opened up. The group operation mode will also bring new challenges to the risk management of securities institutions.

"In the context of supervision and continuing to strengthen the guidance of wind control, Huatai Securities will continue to increase risk management input, deepen the group risk management system, create competitive advantages of risk management with Huatai characteristics, and make new contributions in serving the real economy, optimizing resource allocation and promoting the steady development of multi-level capital markets." The celebrity said.

And the wind control meaning behind the table supervision

In fact, in addition to the revision of the "Regulations", the previous pilot scheme for supervision and regulation is also a change in the regulation system of wind control.

In March 27th, the securities and Futures Commission decided to include Huatai Securities, China Merchants Securities, CITIC Securities, Guotai Junan, CICC, CITIC and 6 Securities Companies in the first batch of regulatory supervision.

According to the "wind control measures", the SFC will gradually allow participating pilot institutions to try out a more flexible wind control index system. At the beginning, considering the occupation of foreign investment capital of the pilot institutions, the calculation coefficient of venture capital preparation for the parent company of the pilot organization was reduced from 0.7 to 0.5, and the coefficient of calculating the total assets from inside to outside was reduced from 1 to 0.7.

"This news comes out, we all focus on the" securities business release risk capital "bigger and stronger angle, in fact, more attention should be paid to the regulation of the security risk control system. There are head traders and wind control analysts.

"These 6 brokerages in the regulatory evaluation criteria, wind control do better, more in line with regulatory group regulatory requirements, so as a pilot, additional incentives to release the risk reserve. It may be more appropriate to understand this policy. As for the follow-up, are there any other incentives? This is hard to say. But just this one, the incentive for brokers is not small, and more is to show the attitude of regulation, that is, seize the risk control, on this basis, encourage the head broker to become bigger and stronger. The broker said.

The Huatai Securities Risk Management Department said to the twenty-first Century economic report that in the past two years, Huatai Securities has taken the lead of the joint supervision as the starting point to increase risk management investment, reserve risk management talents, continue to improve the risk management system and process with collectivization, specialization and platform thinking, vigorously promote the digital transformation of risk management, and make full use of technical means to solidify the wind. The risk control process and key nodes establish a risk management platform for coverage penetration, and the group risk management ability of the company has been significantly improved.

Guotai Junan responsible person also said that the company was incorporated into the supervision of the scope of the pilot, reflecting the supervision of the company's overall risk management culture and ability recognition. The evaluation of the pilot qualification will effectively relax the risk control index system of the company, further release the capital, and open up more room for business development.

"At the same time, the promotion of the regulatory plan will gradually deepen the differentiated supervision in the securities industry, laying the foundation for the company to enter the systemically important financial institution and become an aircraft carrier head broker in the future. The company will take this opportunity to continue to strengthen group vertical integration risk management, standardize risk management process, consolidate risk data management and comprehensive risk management platform construction. The person in charge said.

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