Since May, Chinese regulators have issued a wave of administrative penalties
against securities firms for weak branch management and lapses in
investment-banking duties. Choice data showed that as of May 31 China
International Capital Co, SDIC Securities, Zheshang Securities and others were
sanctioned for brokerage violations, underwriting negligence, inadequate
overseas-subsidiary controls and employees’ unauthorized moonlighting. Market
observers say enforcement is moving from business-level compliance toward deeper
company governance, with branch control and employee conduct management emerging
as key compliance shortfalls.
