There are four highlights, and a negative list for each business line has been released! It is not allowed to solicit business through commercial bribery or other means, as well as major events in the securities industry! Clean and honest employment rules release service | Securities | Business

The detailed rules for integrity and self-discipline in the securities industry have been released.

On July 21st, the China Securities Industry Association issued the "Implementation Rules for Clean and Honest Work of Securities Operating Institutions and Their Staff" to various securities companies, further strengthening the self-discipline management of clean and honest work of securities operating institutions and their staff, implementing the requirements for building a clean and honest ecosystem in the securities industry, and continuously cultivating a clean and honest culture in the industry.

The China Securities Regulatory Commission (CSRC) clearly requires securities companies to improve their internal control mechanisms for clean and honest practices, strengthen their management of clean and honest practices, and ensure that all requirements for clean and honest practices are fully implemented in relevant business activities.

Highlight 1: Securities firms need to establish a clean and honest internal control system for their business operations

The "Detailed Rules" require securities companies to establish a clean and honest internal control system that covers all businesses and various links, and incorporate it into the entire internal control system. Specific and effective pre risk prevention systems, in-process control measures, and post accountability mechanisms should be formulated, clarifying the clean culture construction and clean and honest management responsibilities of directors, supervisors, senior management personnel, and management personnel at all levels. Relevant workpapers on clean and honest industry risk prevention and control should be kept on file for a period of no less than 10 years.

At the same time, the establishment of securities operating institutions for party organizations should be based on the actual organizational form, enterprise equity structure, corporate governance structure, and business management, and fully leverage the leading role of party building work in clean and honest industry management. Directors, supervisors, senior management personnel, as well as management personnel and staff at all levels of securities operating institutions, shall fully understand the relevant regulations on clean industry, implement various requirements for clean industry, and assume corresponding responsibilities for clean industry.

Securities operating institutions should also establish and improve financial management systems, strengthen financial discipline, focus on reviewing and verifying abnormal situations in business income, cost and expense expenditures, salaries and bonuses, fund transactions, and other items, and eliminate non-standard behaviors such as off book accounts. Develop clear internal decision-making processes and specific standards for expenses incurred in business activities to ensure that relevant expenses are legal and compliant.

Securities operating institutions shall formulate reasonable and complete company marketing systems in accordance with relevant regulations, clarify specific items, contents, standards, quotas, etc. that can be included in marketing expenses, and regularly evaluate the company's marketing systems and standards. The expenditure of marketing expenses shall be strictly reviewed, and behaviors that violate the company's marketing systems and standards shall be held strictly accountable to avoid conflicts of interest with public officials, customers, potential customers in negotiations, or other stakeholders.

Highlight 2: List the negative aspects of investment banking and other business lines

According to the "Detailed Rules", securities operating institutions and their staff shall not seek undue benefits or transmit undue benefits to public officials, clients, potential clients in negotiations, and other stakeholders in carrying out securities related business activities. They shall not interfere with, instigate, or assist others in interfering with securities supervision and management or self-discipline management work.

In the process of conducting investment banking business, it is not allowed to transfer or seek undue benefits through the following ten methods:

Firstly, obtaining equity of the proposed listed company for oneself or interested parties through unfair pricing or improper means;

The second is to obtain equity or underlying asset equity of the planned merger and acquisition of the listed company for oneself or interested parties through unfair pricing or improper means;

The third is to issue bonds or agree to repurchase bonds with non fair prices as stakeholders;

The fourth is to leak securities issuance inquiry and pricing information, and manipulate securities issuance prices;

The fifth is to directly or indirectly convey benefits through hiring third-party organizations or individuals;

The sixth is to engage in covert operations during securities issuance and underwriting, using methods such as proxy holding and trust to transfer or seek improper benefits;

Seven is to solicit projects and negotiate service fees by familiarizing oneself with regulatory personnel or other relevant personnel, or by means of promising prices, interest rates, obtaining approval, and obtaining approval time;

Eighth, illegally accepting unfair benefits from the issuer or its related parties, helping the issuer fraudulently go public or issue securities;

The ninth is to incite, instigate, and assist others in interfering with the review process in an improper manner, and to "hunt" the review and regulatory personnel through means such as interest transmission and bribery during the project application, review, and registration process, using the relationship or identity of in-service or resigned personnel and their close relatives in the China Securities Regulatory Commission system to seek improper benefits;

The tenth is other acts of transporting or seeking illegitimate benefits.

In the process of carrying out financing businesses such as margin trading and securities lending, stock pledging repurchase transactions, etc., it is not allowed to transfer or seek illegitimate benefits through the following six methods:

One is to increase the credit limit for customers in violation of regulations, or to decide the distribution of funds and securities without authorization in violation of the company's relevant regulations when the financing funds and securities sources are limited;

The second is to provide financing to specific customers at an interest rate significantly lower than the company's cost of funds or the market price of funds during the same period, or to set relatively lenient default disposal conditions in violation of company regulations;

The third is to provide convenience for customers to engage in illegal activities such as using borrowed funds, evading information disclosure obligations, and reducing holdings in violation of regulations;

Fourthly, providing funds, securities, or other conveniences to customers in violation of regulations;

The fifth is to investigate and evaluate the authenticity and value of collateral through fraud;

The sixth is other acts of transporting or seeking illegitimate benefits.

In the process of conducting self operated business, asset management business, alternative investment business or providing relevant services, it is not allowed to transfer or seek undue benefits through the following nine methods:

One is to use insider information or undisclosed information provided or voluntarily obtained by others to engage in or imply that others are engaged in related trading activities;

The second is to embezzle or misappropriate entrusted assets;

The third is unfair treatment of different investors in different investment portfolios and the same entrusted product, transferring benefits between different accounts;

The fourth is to conduct transactions at prices that deviate significantly from fair market valuation;

The fifth is the fabrication and dissemination of false and untrue information, or the use of information advantages, financial advantages, and stock holding advantages to individually or through collusion, affect the trading prices and volumes of securities, futures, and other derivatives;

Six is to engage in unnecessary securities trading with customer assets for the purpose of obtaining commissions or other benefits;

The seventh is to transfer the actual investment decision-making authority of the asset management account;

Eighth, in the process of exercising voting rights on behalf of the investment portfolio, voting is not based on objective and independent professional judgment;

Nine is colluding with relevant parties to conduct valuation accounting that deviates significantly from fair value;

The tenth is other acts of transporting or seeking illegitimate benefits.

In the process of engaging in securities brokerage business and other sales of products or services, it is not allowed to transfer or seek illegitimate benefits through the following ten methods:

One is to assist customers in selling products or providing services to customers who do not meet the requirements of suitability and qualified investors by providing false personal information, forging data, and holding on behalf of others;

The second is to directly or indirectly return commissions, gift vouchers, or provide other non securities related services to customers, and to give special preferential treatment to some customers in violation of regulations;

Thirdly, arrange transactions such as selling wealth management products that significantly deviate from fair prices to specific customers;

The fourth is to illegally disclose customer information, account information, transaction information, etc. to other individuals or institutions;

The fifth is to entrust unqualified personnel or institutions to solicit customers and deliver unfair benefits;

Six is to sell financial products that have not been approved for sale by the company in the name of the institution or as employees of the institution;

The seventh is to mislead and induce customers to engage in unnecessary transactions;

Eighth, privately accepting clients' commissions to engage in securities investment;

The ninth is to promise investment returns or bear investment losses to customers in violation of regulations;

The tenth is other acts of transporting or seeking illegitimate benefits.

In securities investment consulting services, it is not allowed to convey or seek undue benefits through the following eight methods:

One is to accept any property or other benefits that may affect their independent and objective practice;

The second is to violate the principle of independent and objective practice by publishing or promising to publish research viewpoints that are beneficial to the issuer, listed company, and other stakeholders;

Thirdly, prioritize providing the content or viewpoints of securities research reports to relevant sales and service personnel, customers, and other unrelated personnel of the company;

The fourth is to use improper means to seek favorable selection results, commission distribution income, or performance evaluation results for oneself or the team;

The fifth is to provide securities investment advisory services and collect fees in the name of an individual or in the name of someone else without authorization;

Six is to provide convenience for illegal activities;

Seven is to disclose the client's investment decision plan information to others;

The eighth is other acts of transporting or seeking illegitimate benefits.

Highlight 3: It is not allowed to solicit business through unfair competition such as commercial bribery

The Detailed Rules require securities operating institutions and their staff to continuously improve their professional competence and strengthen their awareness of fair competition. In the process of customer recruitment and project contracting, they should obtain business opportunities through legal and fair competition. They should not solicit business through unfair competition methods such as significantly lower industry pricing levels, interest transmission, commercial bribery, and improper commitments. They should not infringe on the trade secrets of other securities operating institutions. They should not arrange for resigned personnel from the China Securities Regulatory Commission system to communicate and contact regulatory authorities on matters beyond their job responsibilities. They should not engage in other behaviors that violate fair competition and disrupt market order, nor should they transmit or seek unfair benefits.

Highlight 4: Violators will be recorded in the professional reputation information database

For those who violate the Detailed Rules, the China Securities Regulatory Commission will take self-discipline management measures or disciplinary actions depending on the severity of the situation, and record them in the Practice Reputation Information Database in accordance with the Practice Reputation Measures. Relevant disciplinary actions will also be recorded in the Securities and Futures Market Integrity Archive Database in accordance with regulations.

The detailed rules also specify the situation of severe handling, including those that have a significant adverse impact; In the process of inspection and investigation, those who fail to provide relevant documents or materials truthfully, forge, conceal, tamper with, or damage evidence, or evade, refuse, or obstruct association staff from fulfilling their self-discipline management responsibilities in accordance with relevant regulations; Retaliation or framing of complainants, whistleblowers, witnesses, and other relevant personnel.