China Securities Regulatory Commission, Provisions for the Standards for Calculating the Risk Control Indicators of Securities Companies

中国证券监督管理委员会证券公司风险控制指标计算标准规定

April 03, 2020 | BY

Susan Mok

Risk control on investments of securities companies is loosened

Clp Reference: 3700/20.01.23 Promulgated: 2020-01-23 Effective: 2020-06-01
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Issued: January 23, 2020

Effective: June 1, 2020

Main contents: Investment by securities companies in policy financial bonds, index funds, constituent stocks, etc. is suitably "loosened" so as to promote the attraction into the capital markets of long-term incremental funds.

The Provisions place focus on reining in high risk business, such as stock pledging, private asset management, private fund custody and agency sale services, while also further optimizing the calculation standards for high leverage, high concentration asset management products and specific circumstances such as high percentage of the largest shareholder pledges and relatively low percentage of performance bonds.

In light of security companies' classification assessment results, the adjustment coefficient for the risk capital reserve of securities companies with an A class AA rating or above for three years in succession is reduced from 0.7 to 0.5, further enhancing the capital use efficiency of quality securities firms.

clp reference: 3700/20.01.23 issued: 2020-01-23 effective: 2020-06-01

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