China’s top securities regulator has released four fines to Shenwan Hongyuan Securities on Tuesday for improper management in connection with its online investment advisory business in cooperation with Ant Group, an affiliate of Alibaba Group.
According to the four notices issued by the China Securities Regulatory Commission (CSRC) on March 17, one fine was issued to the securities company while another three fines were issued to responsible individuals with different supervisory functions.
While Shenwan Hongyuan Securities was cooperating with Ant Fortune, a wealth management platform under Ant Group, to provide online investment advisory business, Shenwan Hongyuan did not independently implement appropriate management measures to fully understand investors’ individual situations and obtain sufficient information such as address, occupation, financial status, and investment experience, said the notice addressing the fine.
Moreover, the operation of relevant information systems was not under the company’s control and did not locally store clients’ information and relevant service records.
In response to the fines, Ant Fortune responded on Tuesday that the company will assist and cooperate with Shenwan Hongyuan Securities to ensure full compliance and continuous optimization.
The notice ordered Shenwan Hongyuan Securities to carry out an internal compliance review once every three months within a year from March 17, and to submit a compliance inspection report to CSRC within 10 working days following each inspection.
As for the fines for individuals, Fang Qingli and Zhao Yao, the general manager in charge of wealth management and the project leader, were summoned for regulatory talks on March 21.
CSRC also took the administrative supervision measure of issuing a warning letter to Xie Chen, the Chief Information Officer of Shenwan Hongyuan Securities.
The stock price of Shenwan Hongyuan Securities closed at 4.36 yuan ($0.69) per share on Tuesday, up 0.46 percent.
People at Shenwan Hongyuan Securities exchange in Shanghai on 2020 Photo: Yang Hui/GT
