Application scope of new securities law asset management products, etc., but these systems have not been liberalized
Original title: Deep reading of the new securities law | Applicable scope of asset management products, etc., but these systems have not been liberalized for nearly five years, and the newly replaced new securities law has finally been officially released.
After the amendment, the definition of “securities” covered by the securities law has been expanded and become a highlight of this amendment.
However, it should be pointed out at the same time that there are also some restrictions and alternatives discussed earlier in the market that have been liberalized as scheduled.
On December 28, 2019, the 15th Session of the Standing Committee of the 13th National People’s Congress passed the Securities Law of the People’s Republic of China (Amendment), and the revised Securities Law will take effect on March 1, 2020.
The Securities Regulatory Commission stated that the current revision of the securities law systematically summarized the continuous experience of continuous reform and development of the securities market, regulatory enforcement, and risk prevention and control. Based on an in-depth analysis of the securities market’s operating laws and developmental characteristics, it has madeA series of new system reforms and improvements.
One of the improvements is to expand the scope of application of the securities law.
The definition of securities supplements the three types of products. In Chapter I of the Securities Law, the second article is about the scope of application of the law.
The definition of securities in the old version was: “stocks, corporate bonds and other securities recognized by the State Council according to law”, while the new version was changed to “stocks, corporate bonds, depositary receipts and other securities recognized by the State Council according to law”.
This means that the new securities law also explicitly stipulates depositary receipts as statutory securities.
At the same time, asset-backed securities (ABS) and asset management products are also written into securities laws.
The Securities Law authorizes the State Council to regulate asset-backed securities, asset management product issuance, and trading management methods in accordance with the principles of the Securities Law.
This clause also belongs to Article 2 and is a supplementary content: “Asset-backed securities, asset management product issuance, and management methods for transactions, the State Council shall abide by the principles of this law.
“Shen Wanhongyuan’无锡桑拿网s research report pointed out that the definition of securities represents the scope of application of securities law, which itself cannot be ignored.
The definition of securities in the securities law has been expanding in history. For example, the 1999 securities law only included stocks and corporate bonds. In 2006, it replaced government bonds and securities investment fund shares and has continued to use them.
The too narrow definition of securities is not conducive to regulating all securities issuance and trading behavior. Although this amendment does not adopt the “definition + copy” approach, it has expanded the scope of the definition of securities and will deposit depositary receipts, ABS and asset management products.The complete securities practice is a great step forward from the “Securities Law” to the origin of securities in the “Securities Law”. It also basically reflects the development of the capital market and keeps pace with the times.
The regulatory arbitrage and vacuum improvement of asset management products need to be pointed out in particular. The regulatory system of asset management products replacing the securities law has caused a lot of praise in the market.
After the release of the new asset management regulations, due to the lack of high-level design, it is difficult to unify the supervision of the large asset management industry horizontally.
Ping Bing, deputy director of Peking University’s Financial Law Research Center and professor at Peking University Law School, points out that in practice, it is designed and issued by various financial and quasi-financial institutions. Under the separate supervision model, each financial supervision department supervises the results separately, and the results are supervised.Different standards have created a lot of regulatory arbitrage space, and a lot of regulatory vacuums have emerged, implying huge financial risks.
The securities law writes asset management products into it and clarifies the securities attributes of the asset management products, which will provide support for the improvement of the legal framework of the asset management industry.
Peng Bing pointed out in the article: “The provisions of Article 2 (3) of the Securities Law mean that the State Council is authorized to make special regulations for these two types of businesses, and require relevant regulations to abide by the principles of this law, that is, to enforceInformation disclosure and anti-fraud are the main means of protecting investors.
This may indicate that the two types of business will not only be a single centralized regulatory system in the future, but will also be relatively unified in regulatory standards, thereby eliminating regulatory arbitrage and regulatory vacuum, thereby forming a more level playing field.
Shen Wanhongyuan also believes that asset management products and ABS are essentially standardized investment and financing financial products that comply with the financing of securities and are operated by human resources to obtain income and bear risks, tradable, transferable and other financial attributes.Dividing into securities statutory is conducive to providing legal support for regulating the asset management market and asset securitization products.
In the future, the legal relationship of asset management products will be clear. The asset management industry will usher in a unified industry law. After the securities attributes of asset management products are confirmed, the “New Asset Management Regulations” will promote improvement.
The application of the securities law has been extended to overseas ratings. Considering the practical needs of cross-border supervision in the securities field, Article 2 of the new version of the securities law makes it clear that in domestic and overseas securities issuance and trading activities, it disrupts the order of the internal market and damages the legitimate rights and interests of internal investors.In accordance with the Securities Law, legal liabilities shall be investigated.
Corresponding to the clause, the fourth paragraph is added: “If securities issuance and trading activities outside the People’s Republic of China disrupt the domestic market order in the People’s Republic of China and damage the legitimate rights and interests of internal investors, they shall be dealt with in accordance with the relevant provisions of this Law and be held liable.
“Shen Wanhongyuan pointed out that the designation of a certain range of overseas securities issuance and trading activities specifies the scope of regulation, which indicates that in the process of financial opening up, extraterritorial annotations have been supported in legislation.
With these financial openings, financial risks are more easily transferred from overseas markets to internal ones, and the scope of the securities law adjustment has been extended to some overseas securities issuance and trading activities, which is conducive to the implementation of limited extraterritorial interventions. In the current complex overseas environment,Conducive to protecting the interests of investors and investors and the stability of financial markets.
The third-party depository and other systems have not been liberalized. Prior to the “fourth review” of the draft amendments to the securities law, other contents of the market discussion plan also include whether the license of the brokerage firm is liberalized, and whether the brokerage business can provide a discretionary entrustment form.In terms of the final provisions, the securities law has made breakthroughs in these areas.
CICC listed three aspects in the research report to replace the restrictions on policy liberalization as expected by the market.
First, Article 120, paragraph 5, states: “Except for securities companies, no unit or individual may engage in securities underwriting, securities sponsorship, securities brokerage, and securities financing and securities lending business.
“This basically ruled out the possibility of separately opening investment banking or brokerage business qualifications to banks or internet companies that have not obtained a brokerage license.
Second, Article 131 stipulates: “The transaction settlement funds of securities company customers are placed in commercial banks and managed in separate accounts in the name of each customer.
. It is forbidden for any unit or individual to misappropriate customer transaction settlement funds and securities in any form.
“This means that the third-party depository system has not been liberalized.
Thirdly, Article 134 stipulates: “A securities company that engages in the brokerage business shall not accept the full power of the client to decide on the purchase or sale of securities, choose the type of securities, determine the purchase quantity or purchase price.
“This means that the provisions of the new securities law on basic financial functions, such as securities account, have not been substantially expanded.
The public fund investment and advisory pilots that are currently being promoted are based on the discretionary commission of fund portfolios, and the discretionary commission of securities trading is forbidden. Therefore, brokerage investment advisors are still allowed to accept clients’ entrusted securities trading.