Overseas subsidiaries are not "compliance islands". Securities firms must prioritize compliance in expanding business across borders.

34 domestic securities firms, 36 overseas subsidiaries, a total asset of 1.94 trillion Hong Kong dollars... a set of data outlines the picture of mainland securities firms going international, and also reflects the real challenges faced in compliance governance under cross-border operations. The Shanghai Securities Regulatory Bureau recently issued a warning letter to Guotai Junan Securities, exposing the governance weaknesses hidden in the industry: overseas subsidiaries are not independent "compliance islands" outside the governance system of the parent company, but the decision-making procedures and compliance reviews of some securities firms have failed to achieve cross-border synchronization. Since 2024, from personnel appointment control to risk indicator system, regulatory penalties have been intensively aimed at the governance loopholes of parent and subsidiary companies. The direction of industry development is already clear. Recently, the cross-border rectification plan of eight departments has been implemented, and the penetrating supervision extends from domestic to overseas. The blurry zone of cross-border business expansion is accelerating to eliminate, and the new industry logic of "external rectification, internal quality improvement" has been established.