What’s new: China International Capital Corp. Ltd. (CICC) (601995.SH), China’s leading investment bank, has been hit by a regulatory warning from securities authorities on irregularities in investment and business operations.
CICC is accused of breaching industry rules for hiring personnel who do not have the required qualifications to carry out related securities business, according to a notice published by the Beijing municipal bureau of the China Securities Regulatory Commission (CSRC).
Several employees have engaged in buying and selling stocks and lending out their personal securities accounts, with inadequate monitoring and supervision by the company, said the regulator.
The company should investigate and rectify the issues, the regulator said. If there is any disagreement, it can apply for administrative reconsideration within 60 days from the receipt of notice or file a lawsuit within six months.
The context: China has been stepping up regulatory reinforcement against financial industry irregularities as part of efforts to stabilize the ailing capital markets.
During the first quarter, financial regulators issued about 50 penalties to the securities industry, affecting 35 companies, public records showed.
In the latest regulatory move, the State Council issued a key policy document on strengthening regulation and risk prevention in capital markets. Dubbed the “National Nine Articles,” the document intensified regulation on a range of market practices.
CICC was set up in 1995 as the first Sino-foreign joint venture investment bank on the Chinese mainland with businesses covering securities brokerage and asset management. It is controlled by Central Huijin Investment Ltd., the domestic investment subsidiary of China’s sovereign wealth fund China Investment Corp.
Contact reporter Han Wei (weihan@caixin.com)
