China Securities Regulatory Commission issues "Decision on Amending the Regulations on the Classification Supervision of Securities Companies"

On August 22, the China Securities Regulatory Commission issued the decision to amend the "Securities Company Classification Supervision Regulations". This revision changes the title from "Securities Company Classification Supervision Regulations" to "Securities Company Classification Evaluation Regulations", in line with the focus on classification evaluation in the content of the regulations. The main modifications include: highlighting the promotion of securities companies' functions. The existing evaluation framework is adjusted to "risk management capability, continuous compliance status, business development, and functional performance status", with a focus on this direction in terms of business scoring, special evaluations, etc. Guiding securities companies to focus on high-quality development. Emphasis on improving business development scoring indicators, guiding securities companies to enhance operational quality, and better utilize professional service capabilities in areas such as introducing medium and long-term funds, wealth management, etc.; appropriately expanding the coverage of key business scoring, encouraging small and medium-sized institutions to explore differentiated development paths based on their own advantages. The above modifications also include: emphasizing the "cracking down on major violations" orientation, strengthening comprehensive penalties. Improving the scope of direct downgrade of classification ratings to maintain the deterrent effect on major malicious cases. In accordance with the principle of "appropriate punishment", appropriately increasing the point deduction values for disciplinary actions related to qualifications, optimizing point deduction values for administrative penalties, setting reasonable point deduction gradients, and promoting the comprehensive penalty effect of various regulatory measures. Summarizing the experience of previous classification evaluations and clarifying the handling rules for special issues. For example, for companies suspected of illegal activities but actively applying for administrative law enforcement commitment and conducting advance compensation, the point deduction values may be appropriately reduced. The overall approach of this revision is as follows: first, adhere to the goal orientation. In accordance with the requirements of preventing risks, strengthening supervision, and promoting high-quality development, the regulatory goals are highlighted, correcting the positioning of industry institutions, improving governance levels, and playing a good role as a regulatory "guiding rod". Second, maintain overall stability. The current system of securities company classification evaluation is generally mature. This revision is based on partial improvement and moderate optimization, without making major adjustments to the existing evaluation system. Third, strengthen overall coordination. Collaborating with the China Securities Association to streamline and integrate special evaluation indicators to avoid duplicate submissions and reduce industry burden. The title of the revised regulations has been changed from "Securities Company Classification Supervision Regulations" to "Securities Company Classification Evaluation Regulations", in line with the content of the regulations focusing on classification evaluation. The main modifications include: first, highlighting the promotion of securities companies' functions. The current evaluation framework is adjusted to focus on "risk management capability, continuous compliance status, business development, and functional performance status", emphasizing this direction in terms of business scoring, special evaluations, etc. Second, guiding securities companies to focus on high-quality development. Emphasis on improving business development scoring indicators, guiding securities companies to enhance operational quality, and better utilize professional service capabilities in areas such as introducing medium and long-term funds, wealth management, etc.; appropriately expanding the coverage of key business scoring, encouraging small and medium-sized institutions to explore differentiated development paths based on their own advantages. Third, emphasizing the orientation of "cracking down on major violations" and strengthening comprehensive penalties. Improving the scope of direct downgrade of classification ratings to maintain the deterrent effect on major malicious cases. In accordance with the principle of "appropriate punishment", appropriately increasing the point deduction values for disciplinary actions related to qualifications, optimizing point deduction values for administrative penalties, setting reasonable point deduction gradients, and promoting the comprehensive penalty effect of various regulatory measures. Fourth, summarizing the experience of previous classification evaluations and clarifying the handling rules for special issues. For example, for companies suspected of illegal activities but actively applying for administrative law enforcement commitment and conducting advance compensation, the point deduction values may be appropriately reduced. Next, the China Securities Regulatory Commission will continue to carry out the implementation of the regulations, continuously improve the industry's classification supervision system, promote the construction of first-class investment banks and investment institutions, and better serve the real economy and the high-quality development of the capital market.