Securities Account Lending New Deal Shock Wave: Capital Allocation, Fund Raising Account Opening Or "Two-Way" Punishment

Two months after the implementation of the new securities law, the provisions on "penalties for illegal lending of units or individuals' securities accounts" have aroused widespread controversy in the industry.

A number of securities dealers said that the regulators are through research, analysis and collation to ferment the identification and handling details of the illegal activities of the lending accounts. In the view of the industry, the "one size fits all" restriction on securities account lending may lead to a certain degree of wrong killing and impact on market activity.

However, according to the twenty-first Century economic news reporter, from a close proximity to the securities brokers at the regulatory level, it is not necessary to take the same rule in the actual implementation, and the corresponding violation criteria are needed for confirmation. But at the same time, the regulation also gives the regulatory authorities the right to reserve penalties, and is expected to achieve a "two way strike" on illegal activities such as capital allocation, fund raising and opening accounts.

Dispute on penalty for account lending

In May 12th, the B-share market, which had not been noticed by the market for a long time, showed a rare slump, and the market pointed the reason for the collapse to a rule adjustment under the new securities law.

According to the fifty-eighth section of the new securities law and the corresponding 195th punishments, "in violation of the fifty-eighth provision of this law, lending securities accounts or borrowing securities accounts from others to engage in securities transactions shall be ordered to make corrections and give warning, and may be fined not more than five hundred thousand yuan."

Compared with the previous period, the scope of the violation of the loan account and the scope of the punishment were extended from the unit to the individual, and because of the long-term existence of the investment in the account of the passport account, the market fear of the market risk was triggered by the market.

"There is a serious problem of the real name system in the B shares, so the market speculation may be subject to the impact of the policy." "The real name system of accounts has also been the focus of regulators in recent years," admitted a strategist in Shanghai securities company.

In fact, penalties for lending accounts may also have an impact on A shares.

Illegal securities activities caused by loan accounts are not uncommon in A shares, for example, some securities practitioners are limited and can not speculate in stocks, so there is no lack of individual investment managers to use other people's accounts for insider trading, but there are also some underground entrusted financial activities, which are also realized through lending accounts. The analysts pointed out.

In the way of implementing the regulation, there are rumors in the rumor that regulatory authorities may consider ways to monitor the number of securities accounts such as fixed IP addresses, but in the view of insiders, if this measure is strictly enforced, it may also lead to a certain degree of wrong killing.

"Many family members may share a single order terminal, and investors may be entrusted to help others to manage their finances. If these activities are not huge, they are also legitimate and are not suitable for strict supervision." The head of a large brokerage firm in Beijing said frankly.

Insiders also pointed out that taking into account the matching degree of regulatory resources, market impact and other factors, the possibility of this rule being carried out across the board is not large.

"In practice, the probability that a knife is cut off and identified and punishing is negligible. After all, this phenomenon is not uncommon. It is difficult to achieve complete and dead proof regulatory coverage with existing regulatory resources." A listed securities broker compliance said, "at the early stage, we should cooperate with the specific securities trading violations or account number anomalies to carry out typical case monitoring and investigation."

"This practice of lowering the punishment standard actually establishes a penalty reserve right for the regulatory authorities at the upper level level." The above compliance people said, "can play a series of illegal securities activities triggered by the violation of the real name system of accounts."

Off site allocation or "sitting"?

In the industry view, the right to retain this punishment can, to a certain extent, curb the illegal activities such as OTC capital allocation, fund raising and opening accounts.

"In the past, the fight against over-the-counter funding and fund opening is often only a blow to the funding providers providing such services, but there is a lack of effective punishment for the capital owners or the owners, which has led to this phenomenon." A broker close to regulators said.

In its view, the violation of individual account lending behavior will strengthen the effective punishment of the capital allocation agent and the fund holder. The reason is that these illegal securities activities often involve account lending.

"However, whether it is an over-the-counter asset allocation or a fund raising account, it often involves the issue of securities account lending. If such activity is identified as a violation, then the regulatory authorities will also have the right to strike the main body of the agent who has the funds and the fund to open accounts." The broker pointed out.

"This is just like cracking down on drug crimes. Drug trafficking and drug abuse are illegal and must be punished according to law." The above said, "through this provision, we will increase the attack on the main body of capital allocation and fund raising, and will also curb the resurgence of such illegal activities to a certain extent."

According to the reporter, there are two kinds of account lending modes in the OTC capital allocation and capital account opening. For example, the fund providers can provide funds for investors, and investors need to share information such as their own securities accounts and bank online banking to cooperate with the capital providers to implement the wind control accounting system. On the contrary, there are also modes for the investors to directly provide investors with sub accounts to make capital allocation.

Under the new securities law, both the lenders and the borrower may be punished accordingly.

However, some insiders pointed out that the securities law explicitly stipulates that lending accounts will be punished only if they engage in securities transactions.

"The purpose of allocation is not to make transactions, but to enlarge trading leverage and do wind control, and the purpose of opening accounts is to have a certain trading authority. Two kinds of illegal activities and intermediate account lending activities are not aimed at securities trading, and it is difficult to be punished legally." The securities regulatory compliance department said.

Some analysts pointed out that the securities law stipulates that the plot is transaction behavior itself, but does not emphasize the subjective motives of illegal subjects, that is, as long as there are two elements of securities account lending and securities trading activities, it is possible to constitute violations and be subject to regulatory penalties.

"From the point of view of law, as long as it constitutes two elements of securities account lending and transaction, it will constitute an illegal act, which has nothing to do with the motives of investors or account lenders." A lawyer from a large securities law firm in Beijing pointed out that "objectively, it is possible to increase the crackdown on the allocation of capital and the opening of funds."

"It is also necessary to see what the specific identification and punishment standard of regulation is, whether it is to wait for the provisions of the relevant rules as long as there is an abnormal number of securities transactions in the same physical IP address, or according to the illegal activities that have occurred. The broker dealer compliance department also pointed out.