Measures for Compliance Management of Securities Companies and Securities Investment Fund Management Companies
Measures for Compliance Management of Securities Companies and Securities Investment Fund Management Companies
Measures for Compliance Management of Securities Companies and Securities Investment Fund Management Companies
Order of the China Securities Regulatory Commission No. 133
June 6, 2017
The Measures for Compliance Management of Securities Companies and Securities Investment Fund Management Companies, deliberated and adopted at the 3rd Chairman Executive Meeting of the China Securities Regulatory Commission on April 27, 2017, are hereby promulgated and shall come into effect as of October 1, 2017.
Chairman of the China Securities Regulatory Commission: Liu Shiyu
Measures for Compliance Management of Securities Companies and Securities Investment Fund Management Companies
Chapter I General Provisions
Article 1 These Measures are formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Law of the People's Republic of China on Securities Investment Funds, and the Regulations on the Supervision and Administration of Securities Companies for the purposes of prompting securities companies and securities investment fund management companies to strengthen their respective internal compliance management and realize sustained and regulated development.
Article 2 Securities companies and securities investment fund management companies (hereinafter collectively referred to as "securities and fund operators") that are established within the territory of the People's Republic of China shall exercise compliance management in accordance with these Measures.
For the purpose of these Measures, the term "compliance" means the conformity of the operating management of securities and fund operators and the practices of their employees to laws, regulations, rules, norms, industry standards and self-discipline rules, internal corporate rules and bylaws, and those professional ethics and code of conduct widely observed within the industry (hereinafter collectively referred to as "laws, regulations and norms").
The term "compliance management" means any act of securities and fund operators that formulate and implement compliance management systems, establish the compliance management mechanism, and prevent compliance risks.
The term "compliance risks" mean risks faced by a securities or fund operator to be investigated for its legal liability according to the law, be subject to regulatory measures or disciplinary sanctions, and suffer from property losses or damage to its business reputation, as the operating management of such securities or fund operator or the practice of its employees contravenes laws, regulations or codes.
Article 3 The compliance management of a securities or fund operator shall cover all of its business, involve all the departments, branches, subsidiaries at all levels, and employees thereof, and shall be implemented throughout all stages, such as decision-making, execution, supervision and feedback.
Article 4 Securities and fund operators shall establish the philosophy that compliance shall be upheld by all employees; the management shall take the lead in compliance; compliance creates value and acts as the foundation for a company to survive. They shall also advocate and advance the building of a compliance culture, train all employees to help them establish the awareness of compliance, enable compliance management employees to have better professional glory, and make their work more specialized and professional.
Article 5 The China Securities Regulatory Commission (hereinafter referred to as the "CSRC") shall supervise and administer the compliance management of securities and fund operators in accordance with the law. The local branches established by the CSRC shall fulfill their responsibilities of supervision and administration as authorized.
Self-discipline organizations, such as the Securities Association of China and the Asset Management Association of China (hereinafter referred to as the "Associations") shall formulate implementing rules based on these Measures, and conduct self-discipline administration of securities and fund operators in respect of their compliance management.
Chapter II Compliance Management Responsibilities
Article 6 In operating all types of business, securities and fund operators shall do business in a legal manner, be diligent and responsible, adhere to the principle of supremacy of client benefits, and comply with basic requirements as follows:
1. Fully learn about the basic information, financial status, investment experience, investment objectives, risk preference, credit records, etc. of their clients and update such information in a timely manner.
2. Reasonably categorize their clients and the risk levels of their products and services to provide clients with the right products and services, instead of cheating them.
3. Constantly urge their clients to standardize securities offering activities, dynamically monitor clients' transactions, and promptly report and lawfully dispose of material abnormal behavior, but not provide clients with convenience for their illegal efforts to issue securities or carry out transactions.
4. Strictly regulate the practices of their employees, urge them to be diligent and responsible, and prevent them from taking advantage of their own position to perform any act that is illegal or law-breaking, that goes beyond their authority or damages the legitimate rights and interests of clients.
5. Effectively manage insider information and non-public information, prevent the company itself and employees thereof from trading securities or advising others to trade securities by making use of such information, or revealing such information.
6. Promptly identify and properly settle any conflict of interests between the company and clients, among clients, or between different business sectors of the company, practically safeguard the interests of clients, and treat all clients equally.
7. Handle procedures to deliberate over associated transactions and fulfill the obligation of information disclosure according to the law, to guarantee the fairness of associated transactions and prevent the occurrence of improper associated transactions and the transfer of benefits.
8. Prudently evaluate the influences of their own operating and management behavior on the securities market, and take effective measures to prevent disturbance to the market order.
Article 7 The board of directors of a securities or fund operator shall determine the compliance management objectives thereof, undertake responsibilities for the effectiveness of the compliance management, and fulfill the following compliance management duties:
1.
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