What’s new: China’s securities regulator picked Morgan Stanley Securities (China) Co. Ltd. and Changjiang Finance Services Co. Ltd. for random on-site inspections of company governance and business compliance.
The Shanghai branch of the China Securities Regulatory Commission (CSRC) will examine the companies’ top executives, personnel management and compliance with anti-money laundering and investor suitability rules, according to the regulator.
The companies to be inspected were selected through a random process under the supervision of company representatives. Inspection officers dispatched to the sites were also randomly chosen, and the results will be made public in a timely manner, the regulator said.
The context: Some market participants linked the inspection of Morgan Stanley Securities to a research report issued Aug. 2 in which analysts at the Wall Street giant cut ratings of Chinese stocks and encouraged investors to sell.
But the inspection of the two companies was announced July 31, according to the website of the Shanghai CSRC.
Established in 2011 as a 2:1 joint venture between China Fortune Securities and Morgan Stanley Asia Ltd., Morgan Stanley Securities is currently 94% owned by the American bank after several stake transfers. The company is based in Shanghai with offices in Beijing and Shenzhen. Its businesses include underwriting and sponsorship of stocks and bonds as well as proprietary trading of bonds.
Changjiang Finance Services was jointly founded in 2003 by Changjiang Securities and BNP Paribas. In 2007, the company became a wholly owned subsidiary of Changjiang Securities after a stake transfer from BNP Paribas. Its businesses include equity financing, bond financing and financial advisory.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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