"One Big Public Offering" Era: Deregulation Of Securities Companies

The management of public funds ushered in major changes.

Recently, the China Securities Regulatory Commission (CSRC) issued a notice on soliciting public opinions on the measures for the supervision and administration of managers of public offering securities investment funds (Draft) (hereinafter referred to as the "new regulations") and related supporting rules. China Securities Regulatory Commission revised the administrative measures for securities investment fund management companies and renamed them the measures for supervision and management of managers of public offering securities investment funds (Draft for Soliciting Opinions). This is also the first time in 2004 and revised in 2012 that the management measures of fund companies ushered in major revision.

It is worth noting that the new regulations optimize the public offering license system, appropriately relax the "one participation and one control" restriction, allowing the same subject to control a fund company and a public offering licensed institution at the same time. This means that the application for public offering license of securities companies' asset management will be liberalized, and the market participants of public offering funds will be further diversified.

"The new rules are mainly good for the asset management of securities companies, which is helpful for the long-term development of the public offering industry. More high-quality institutions will join in, and more high-quality products can be provided to promote healthy competition in the public offering industry." Jia Zhi, the general manager of the securities research group, told the 21st century securities research team on May 8.

Securities companies usher in big profits

The loosening of the new rules for "one participation and one control" is self-evident for securities companies.

Industrial Securities Research said that the draft pointed out to optimize the public offering license system and strengthen equity management. One is to unify the access standards of all kinds of institutions; the second is to smooth the regulatory arrangements for public offering licensed institutions; the third is to allow the same entity to control a fund company and a public offering licensed institution at the same time, which is the most important benefit of this revision.

In the past, "one participation and one control" means that one financial institution or multiple financial institutions controlled by the same actual controller shall not participate in more than two securities fund operation institutions, and the number of holding securities fund operation institutions shall not exceed one.

In other words, the same securities company can only hold one public offering company. If a securities company has a fund company, the asset management department of the securities company can not apply for a public offering license.

According to the "one participation and one control" rule, only 13 securities companies hold public offering licenses, including 6 securities companies and 7 asset management companies. They are Gaohua securities, Dongxing securities, Guodu securities, Huarong securities, Shanxi securities, BOC International Securities, Bohai Huijin asset management, CAITONG asset management, Huatai asset management, Dongfang asset management, Changjiang asset management, Zheshang asset management and Zhongtai asset management.

However, a large number of securities companies are unable to obtain public offering license due to "one participation and one control", especially the head brokers.

"Most of the top securities companies lack public offering licenses. If the draft for comments is implemented in the future, the asset management departments of some holding fund companies can apply for the public offering license, which is good for the securities companies to carry out public offering management business. At the same time, under the background of liberalizing the qualification of fund investment advisers, the asset management departments of securities companies can also provide characteristic public offering for wealth management lines based on their investment research and product creation capabilities Fund raising products bring new business growth points for itself. " Industrial Securities pointed out.

"In the long run, the new rules will be of great benefit to us. The new rules mean that the road of establishing asset management companies and applying for public offering licenses has been opened, and we can go down step by step in the future." Deputy general manager of Asset Management Department of a large securities company in Beijing told 21st century economic reporter.

According to the requirements of "one participant, one control and one brand" in the new regulations, the number of other public fund managers controlled by the same subject or different entities controlled by the same subject shall not exceed 1, the number of participating fund management companies shall not exceed 2, and the number of fund management companies controlling shall not exceed 1.

"Appropriately relaxing the public offering license is conducive to complying with the latest business formats in the era of big asset management. At present, although some securities asset management companies have completed the standardization and rectification of large aggregate products, they are subject to the restriction of "one participation and one control", and the products are standardized, but there is no public offering license. According to the revised public offering license system, some large-scale securities companies can "one participate, one control and one license" to realize the large layout of group operation. " The 21st century economic report told reporters.

Industry competition intensifies

On the other hand, when the policy is loosened, the industry ecology will inevitably change.

"It doesn't have a great impact on us. In fact, bank financial management subsidiaries and insurance asset management can do public offering. In the future, we will compete openly to compete for strength. Each has its own advantages, and the competition is always there. It depends on who wins. " A person from a securities firm in South China was interviewed.

The experience of a securities company as a public fund is also quite dramatic. The reporter of 21st century economic report learned that when the senior management of a securities company was discussing the new rules at the internal meeting recently, the chairman and the general manager took a completely opposite attitude. One side thought it was good and hoped to actively apply for a license; the other side felt pressure on the operation of the existing public fund company.

It is worth mentioning that, from the public offering reform of the large collection of securities companies since last year, the market has paid close attention to relevant products.

In fact, since the China Securities Regulatory Commission (CSRC) issued a letter to CITIC Securities, Guotai Junan Securities and Dongfang securities in August 2019, the reform of securities companies' large collective public offering has begun. At present, CICC, GF Securities, Pacific Securities, Industrial Securities and other securities companies have launched public offering transformation products, and the transformation of public offering has entered a fast track.

A number of institutions have also made good achievements in the large collection of public offerings, and even become a hot money fund.

For example, in September last year, after the completion of the public offering reform, the fund raised 12.2 billion yuan on its first day; the two public offering products, dongfanghongqiyuan and CITIC dividend value, which were sold in November last year, both raised more than 4 billion yuan on the first day; and CITIC Securities, which was issued in March this year, has achieved value growth hybrid collective asset management It is planned to raise nearly 3 billion yuan in the morning of the first day of sale.

On the other hand, the new regulations strengthen "supporting the superior and limiting the inferior", and improve corporate governance, including clarifying the exit mechanism of fund managers for the first time, adjusting the regulatory system structure from "access operation supervision" to "access operation governance exit supervision", which has improved the system preparation for the market-oriented exit channels of fund companies, and strengthened the long-term incentive and restraint mechanism of fund companies.

"The new regulations highlight the long-term stability of corporate governance. Good corporate governance will lay a foundation for the further development and strengthening of domestic asset management institutions, maintain internal stability, and better protect the long-term interests of investors, and create a good environment for the promotion of human capital. " Boshi fund was interviewed.

In its view, the long-term incentive mechanism and institutional arrangement with people as the core and consistent interest demands can improve the sense of responsibility of business management personnel and professional and technical personnel, create a good human-oriented corporate culture, form a common concept and value system of respecting knowledge and talents within the company, and effectively stimulate the enthusiasm, creativity and team spirit of the talent team To form a good atmosphere for the development of the top and bottom, and effectively enhance the competitiveness.

Under the background of public fund raising, it is expected to further strengthen the supervision mechanism of high-quality public funds.

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