Securities Companies' Rating Behind "ABCD": Foreign Holding Securities Companies Start With 3B Level, Shenwan Hongyuan And Everbright Return To The First Tier

China Securities Regulatory Commission recently released the classification results of securities companies in 2020.

Although the "gourd eaters" only see a few simple ABCD, the changes behind it are a ups and downs of the lake.

According to the 21st century economic report, among the 100 rated securities companies, 26 were downgraded, 33 were upgraded, 37 were unchanged, 2 were withdrawn from the rating, and 2 were new to the rating.

Foreign securities companies "seeking stability"

Since the regulatory authorities announced last year that they warmly welcome foreign securities companies to China, the voice of "wolf is coming" has been heard.

It's hard to say how much fear the front-line employees of local securities companies are, but from the perspective of public opinion, the comment that "the wolf is coming" has not been broken.

According to the latest classification results of securities companies, Nomura orient and JP Morgan Chase, which successively won the license of securities companies in the industry at the end of 2019 and became the first foreign-owned securities companies, have been rated. The two foreign-controlled securities companies both started at BBB level.

What is BBB concept?

Guangfa Securities, which bear joint and several liability for Kangmei's fraud, were BBB grade last year and this year, and Nanjing Securities and Hongta securities, which are popular in secondary market funds, are also BBB grade this year.

For ordinary people outside the industry, some securities companies with a weak sense of existence, such as HSBC Qianhai, century securities, Datong securities, Shengang securities, etc., are also BBB grade securities companies this year.

In addition, UBS Securities, which completed the equity change at the end of 2018 and became the first foreign-owned securities company, was rated BBB in 2019.

This also means that the initial rating of foreign holding securities companies entering China is almost BBB.

At least from the perspective of comprehensive rating, the starting point allocation of foreign holding securities companies after entering China is not high. Some brokers believe that those who are worried about "the wolf is coming" may have magnified this worry.

However, in terms of growth, UBS Securities has risen from BBB to a in a year. Compared with the local securities companies such as Anxin securities, which have risen two levels from BBB to AA, Guorong securities to grade C and BBB, UBS Securities, the first foreign-owned securities company, has grown steadily.

The general manager of a foreign holding securities firm said that foreign institutions attached great importance to "stability" when they came in.

"Although there are also requirements for business to be done, the pursuit of compliance and stability is much higher than that of some radical local securities companies. Frankly speaking, for example, the core profit source of a head international investment bank is other departments in the country where it is located. Then the requirement for China region is to develop steadily, not to eat up many markets at once. " The person pointed out.

One of the reasons why many securities companies want to introduce foreign investors into the market is to relax the supervision. Although the securities companies will gradually find a balance between the local and foreign investors, they will not be able to compete with each other in a short time. "However, in the long run, foreign holding securities companies will always be bigger, and local securities companies also need to have higher development requirements."

The disappearance of Huaxin securities rating

The giant's River and lake is always calm, and the perennial AA level securities companies are still there. They represent the first echelon of securities companies.

These institutions are: CICC, CITIC Securities, CITIC construction investment, Huatai Securities, Guotai Junan, Guoxin Securities, Haitong Securities, Ping An Securities and China Merchants Securities.

In this year's new rating, members of the first tier have increased a lot.

Among them, the reports of "Sinochem Securities Co., Ltd. and Sinotrust Securities Co., Ltd." and "Sinotrust Securities Co., Ltd." and "Sinotrust Securities Co., Ltd." are not well-known.

When it comes to "know your mistakes and correct them", Guorong securities has been continuously punished in 2019. Only in the first half of the five securities penalty tickets issued by the institutional Department of the CSRC, Guorong securities alone carried the next four. In the second half of the year, Guorong securities continued to be warned and supervised due to the bond problem. In 2019, the rating of Guorong securities dropped by 5 grades, from BBB to C, becoming the most downgraded securities company in 2019. This year, the investment banking team of Guorong securities also lost many employees.

However, in 2020, Guorong securities jumped 5 levels from C to BBB.

In 2020, the same case will appear again. Jianghai securities in this time's securities rating, down 5 grades, from BBB to C grade.

In June this year, Jianghai securities received regulatory measures from China Securities Regulatory Commission (CSRC) for a number of problems in carrying out its business, and suspended some functions of its three major businesses, namely, bond self operation, asset management and credit, for six months. Vice presidents in charge of the Securities Regulatory Commission are not qualified as the three major business candidates.

However, more "sad" than Jianghai securities, Huaxin securities even lost its rating.

At the end of 2019, all the Securities Regulatory Commission of China Securities Regulatory Commission (CSRC) will be announced as D-class business in 2019.

On November 15, 2019, China Securities Regulatory Commission (CSRC) issued a notice saying that in view of the fact that Shanghai Huaxin Securities Co., Ltd. illegally provided financing for shareholders, Shanghai Huaxin International Group Co., Ltd. and its related parties, illegally carried out asset management business, net capital and other risk control indicators, which did not comply with the requirements for continuous operation of securities business, and failed to correct within the time limit, which seriously damaged the legitimate rights and interests of customers and endangered the public The company is operating steadily, and the CSRC has decided to cancel all business licenses of Huaxin securities on November 15, 2019.

There is also a worthy of attention, which has been rated as a d-level securities company for two consecutive years. What is the story behind this securities company and what will be the future?

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