China Regulator Revokes Licenses of Securities Firm After Investigation
China Regulator Revokes Licenses of Securities Firm After Investigation
(Bloomberg) -- Chinese regulators revoked all licenses of CEFC Shanghai Securities Co., marking a rare move in recent years.
The decision was announced late Friday by the China Securities Regulatory Commission, which cited the broker’s unlawful actions, including extending financing to parent company CEFC Shanghai International Group.
The CSRC appointed Grandall Law Firm (Beijing) to carry out an “administrative liquidation” over no longer than 12 months, while Guotai Junan Securities will take over the client-related businesses during this period, including the securities brokerage. The regulator will have on-site personnel to oversee the wind-down.
The broker’s parent, a unit of the privately-held CEFC China Energy Co., hasn’t released annual reports for the past two years. One of the parent’s units, Shanghai Huaxin Group, filed for bankruptcy protection in the U.S. in May.
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The decision comes after an investigation into the broker was kicked off in August last year. The regulator said the broker was unable to reestablish the minimum thresholds for net capital and risk management within the required period.
The Shanghai-based brokerage, with 3.6 billion yuan ($513 million) of assets, ranked No. 93 among the nation’s 98 brokerages in 2018, according to the Securities Association of China.
To contact Bloomberg News staff for this story: Lucille Liu in Beijing at xliu621@bloomberg.net
To contact the editors responsible for this story: Jun Luo at jluo6@bloomberg.net, Jonas Bergman, David Watkins
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