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CaiDa Securities Issued Warning Letter by Hebei Regulator for Multiple Violations
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On September 22, the Hebei Securities Regulatory Bureau issued a warning letter to Caida Securities Co., Ltd. for multiple regulatory violations. The infractions include inadequate control over brokerage marketing activities, such as returning sales incentives to employees who purchased the company's asset management products, allowing non-front-office staff to engage in marketing and customer service, and permitting personnel without futures qualifications to conduct IB business and receive rewards. The firm also failed to properly supervise employee conduct, specifically regarding insufficient checks on employees trading stocks. Additionally, in certain corporate bond underwriting projects, Caida Securities did not conduct adequate due diligence on issuers' financial information, construction project progress, and asset conditions. The Hebei bureau ordered Caida Securities to submit a rectification report within 15 working days and recorded the matter in the securities and futures market integrity archive.
Source report
On September 22, the Hebei Regulatory Bureau of the China Securities Regulatory Commission (CSRC) disclosed an administrative regulatory decision to issue a warning letter to Cinda Securities Co., Ltd.
Identified Issues
The investigation revealed the following problems at Cinda Securities:
1. Inadequate Control over Brokerage Business Marketing Activities
- Returned sales incentives to employees who purchased the company's asset management products
- Allowed certain mid- and back-office staff to engage in marketing and client services as a secondary role
- Permitted individuals without futures qualification to conduct IB (Introducing Broker) business and receive rewards
These actions violated:
- Article 8, Item 3, and Article 40 of the Measures for the Administration of Securities Brokerage Business (CSRC Order No. 204)
- Article 16, Paragraph 2 of the Interim Measures for Securities Companies to Provide Intermediary Introduction Services for Futures Companies (CSRC Announcement No. 5 of 2025)
2. Lax Control over Employee Conduct
- Inadequate verification of employees' stock trading activities, violating Article 37, Paragraph 2 of the Measures for the Administration of Securities Brokerage Business (CSRC Order No. 204)
3. Insufficient Due Diligence in Bond Underwriting
- In certain corporate bond underwriting projects, failed to conduct adequate due diligence on specific financial information, construction project progress, and asset conditions of the issuer
This violated Article 6, Paragraph 1 of the Measures for the Administration of Corporate Bond Issuance and Trading (CSRC Order No. 222).
Regulatory Action
Pursuant to:
- Article 43 of the Measures for the Administration of Securities Brokerage Business
- Article 30 of the Interim Measures for Securities Companies to Provide Intermediary Introduction Services for Futures Companies (CSRC Announcement No. 5 of 2025)
- Article 69 of the Measures for the Administration of Corporate Bond Issuance and Trading
The Hebei Regulatory Bureau decided to issue a warning letter as an administrative regulatory measure against Cinda Securities. The company is required to submit a written rectification report within 15 working days of receiving the decision. The matter will also be recorded in the securities and futures market integrity archive.
Source
面包财经Eastern
Part of this Story
China's Hebei regulator issues warning letter to Caida Securities for compliance failures