eath Language
Investor Relations Investor Relations
/
/
/
The case of "investor protection-understand the rules, know the risks"-"customer wealth management" do not trust the right way to securities investment

The case of "investor protection-understand the rules, know the risks"-"customer wealth management" do not trust the right way to securities investment

(Summary description)Some securities practitioners in the market have been able to deceive their clients by means of professional stock speculation, promise of guaranteed returns, and agreement on revenue sharing, so as to privately do asset management for investors and conduct illegal vicarious financial management activities. However, when there are investment losses, it often leads to conflicts and disputes, and the fact that the practitioners are acting on behalf of their clients will also surface.

The case of "investor protection-understand the rules, know the risks"-"customer wealth management" do not trust the right way to securities investment

(Summary description)Some securities practitioners in the market have been able to deceive their clients by means of professional stock speculation, promise of guaranteed returns, and agreement on revenue sharing, so as to privately do asset management for investors and conduct illegal vicarious financial management activities. However, when there are investment losses, it often leads to conflicts and disputes, and the fact that the practitioners are acting on behalf of their clients will also surface.

Information

Some securities practitioners in the market deceive the trust of customers by means of professional stock speculation, promising guaranteed returns, and agreeing on revenue sharing, so as to privately do asset management for investors and carry out illegal financial management activities on behalf of customers. However, when investment losses occur, conflicts and disputes often arise, and the fact that practitioners violate the rules of wealth management on behalf of customers will also surface.

A former employee of a securities firm's business department (holding a securities broker practice certificate) privately signed a cooperative wealth management agreement with customer B of the business department, stipulating that he would conduct securities trading operations on 60,12 funds in the customer's account, and the entrustment period was 2015 months (March 3, 17 to March 2016, 3). During the contract period, if the account generates more than 17% of the profit, it will enjoy 20% of the profit part, if the profit does not exceed 20%, the profit will be owned by the customer; If the loss exceeds 20%, the customer has the right to terminate the agreement or have him serve it free of charge until it makes a profit. Later, due to the serious loss of the account, the two parties terminated the agreement early. Practitioner A has admitted in writing to the local securities regulatory bureau the above-mentioned violations of the law. A person who engaged in securities investment and wealth management on behalf of a customer without authorization, and agreed to share the investment income, his behavior has constituted a wealth management act on behalf of the customer, violating the Securities Law, the Interim Regulations on the Administration of Securities Brokers, the Code of Practice for Securities Brokers (for Trial Implementation) and the Code of Practice for Securities Practitioners, and the CSRC has taken administrative supervision measures against him by issuing a warning letter. In accordance with the relevant provisions of the Rules for the Handling of Self-Regulatory Supervision Cases and the Measures for the Implementation of Self-Discipline Management Measures and Disciplinary Sanctions, the Securities Association of China has taken disciplinary measures against Securities Practitioner A. And investor B blindly believed in the promise of practitioner A, and eventually his own property was infringed.

Securities practitioner wealth management refers to the behavior of employees of securities companies privately accepting the entrustment of customers and engaging in securities investment and wealth management on behalf of customers without authorization.

Article 143 of the Securities Law stipulates that a securities company handling brokerage business shall not accept the discretionary entrustment of the client to decide on the purchase and sale of securities, select the type of securities, determine the quantity to be bought and sold or the purchase price; Article 144 stipulates that a securities company shall not in any way promise to the proceeds of securities trading or compensation for losses arising from securities trading by customers; Article 145 stipulates that a securities company and its practitioners shall not privately accept the entrustment of customers to buy or sell securities without going through their lawfully established business premises.

Article 13 of the Interim Provisions on the Administration of Securities Brokers (hereinafter referred to as the "Interim Provisions") stipulates that securities brokers shall practice within the scope of Article 11 of these Provisions and authorized by securities companies, and shall not engage in the following acts: (1) handling account opening, cancellation and transfer, securities subscription, trading, fund access, transfer, inquiry, etc. for customers; ...... (3) Agree with customers to share investment returns, and make commitments to the profits from securities trading or compensation for losses incurred by securities trading.

Article 20 of the Code of Practice for Securities Brokers (for Trial Implementation) stipulates that securities brokers shall practice within the scope stipulated in Article 11 of the Interim Rules and authorized by the securities companies they serve, and shall not engage in acts prohibited by Article 13 of the Interim Provisions; Article 32 stipulates that employees of securities companies engaged in securities brokerage business marketing activities shall be implemented with reference to this standard.

Article 1 of the Code of Conduct for Securities Practitioners stipulates that practitioners should conscientiously abide by the provisions of "the rules and regulations of their institutions and the professional ethics and codes of conduct recognized by the industry".

From this case, we can see that investors must clearly distinguish between the asset management business of securities companies and the illegal financial management behavior of practitioners. Pursuant to Article 45 of the Regulations on the Supervision and Administration of Securities Companies, a securities company may, in accordance with the provisions of the Securities Law and these Regulations, engage in securities asset management business that accepts the entrustment of customers and uses customer assets for investment. The income generated by the investment shall be enjoyed by the client, the loss shall be borne by the customer, and the securities company may charge management fees according to the agreement. A securities company engaged in securities asset management business shall sign a securities asset management contract with the customer, stipulating matters such as the investment scope, investment ratio, management period and management fees. Securities asset management business is a corporate act, with the securities company as the main body and the investor signing the relevant asset management contract in writing. Practitioners' wealth management on behalf of customers is a personal act of practitioners, and generally practitioners and investors sign relevant contracts or verbally agree on relevant contents. At present, securities companies strictly prohibit practitioners from engaging in illegal wealth management activities on behalf of customers, take a series of strict preventive measures, and fully disclose risks in the process of telephone return visits to investors. Under such circumstances, if the investor still privately entrusts the practitioner to manage the financial management for him, it is generally regarded as the personal act of the practitioner, and once the investor suffers losses due to illegal valet wealth management, the investor can only claim rights from the practitioner.

Investors should not blindly believe in the illegal promises of practitioners, but should maintain a rational investment concept and strive to improve their professional knowledge and experience. Only through continuous learning, understanding various business rules and products of the securities market, analyzing market information, making independent judgments, and constantly accumulating investment experience can investors effectively prevent risks and obtain investment returns.

Scan the QR code to read on your phone

Group contact 

400-888-5806/0596-6783990

Address:Wuzhai Park,Jiaojiang Road,Jiaomei Town,Zhangzhou Taiwanese Investment Zone,Fujian Province

公众号二维码

Scan and follow us

COPYRIGHT © 2022 Tecnon Electronics Co.,Ltd