CITIC Securities adheres to the principles of standardized operation, diligence and responsibility, customer first, and practices compliance management, prevents money laundering risks, attaches importance to honest practice, and provides customers with high-quality services. We improve suitability management, deeply promote investor education, and standardize supply chain management to safeguard the company's interests and promote the Company's stable and healthy development.
(I) Standardized Operation
  • 1Compliance Management

    The Securities Law of the People’s Republic of China, Compliance Management Measures for Securities Companies and Securities Investment Fund Management Companies and other laws and regulations explicitly stipulate the duties and compliance management responsibilities of securities companies as underwriting institutions, including formulating and implementing compliance management systems, establishing a compliance management mechanism and preventing compliance risks. In 2020, CITIC Securities strictly obeyed the requirements of relevant laws and regulations and take a set of measures to ensure robust operation. In an effort to continuously optimize and regulate the compliance management mechanism, we have set out / revised 44 compliance management systems, including the Measures for Integrity Supervision and management (Exposure Draft), Information Barrier Procedures and Professional Integrity Regulations, in the current year. The Company is committed to strengthening the control over anti-money laundering, professional integrity and compliance, and promoting the implementation of relevant systems and mechanisms by means of process and system construction, promotion and education.

    When onboarding, new employees are required to sign the Legal Responsibility Warning and Commitment Letter. A special chapter has been set out in the annual training of new employees to underline compliance with the law, honesty, integrity and other ethical requirements, foster compliance awareness in work among employees and effectively prevent from violations of conduct code, laws and regulations. As at the end of the reporting period, the Company was not aware of any significant violations of laws or regulations.

    In 2020, the Company sorted out compliance management requirements and adopted a series of measures. In terms of integrating compliance management systems regarding information isolation, anti-money laundering, abnormal transaction detection, etc. with related systems of CITIC Securities South China, upgrading the abnormal transaction monitoring indicator system, establishing the risk assessment system of money laundering, sorting out and formulating the migration plan for the central control room, the Company effectively forestalled risks associated with information isolation, employee operation, interest conflict, anti-money laundering, abnormal transactions, etc.

  • 2Anti-money Laundering

    The Anti-Money Laundering Law of the People’s Republic of China and The Rules for Anti-Money Laundering by Financial Institutions stipulate that the financial institutions should build a sound Anti-money laundering internal control system and fulfil the anti-money laundering obligations of financial institution. In the current year, CITICS Securities fully complies with such laws and regulations. In response to regulatory changes and operational management needs, the Company has revised the Anti-money Laundering Rules on Client Identification and Risk Management, Rules for the Reporting of High-value Transactions and Suspicious Transactions, Guidelines on the Assessment of Business Money Laundering Risk, etc. and devised a variety of special systems in relation to performance appraisal, award and punishment, reporting of anti-money laundering, in a bid to enhance internal control over anti-money laundering.

    In 2020, the Company conducted self-assessment on money laundering risk of legal entities from the perspectives of inherent risks, effectiveness of money laundering risk control measures, residual risk matrix, etc., so as to evaluate the money laundering risk objectively and fulfil the duties and obligations. Centering on the calculation criteria for customers’ money laundering risk level, monitoring logic and suspicious transaction monitoring indicators, the Company upgraded the anti-money laundering monitoring system and the list monitoring system, to ensure effective and efficient anti-money laundering work henceforth.

  • 3Professional Integrity

    CITIC Securities upholds the code of conduct featuring “observation of the law, honesty and integrity” in strict compliance with the code of ethics. The Company identifies and obeys relevant laws and regulations, such as the Anti-Unfair Competition Law of the People’s Republic of China and Regulations on the Integrity of Securities and Futures Operation Institutions and Employees, advocates and safeguards fair competition, protects legitimate rights and interests of investors and proactively maintains the market order.

    The Detailed Rules for the Integrity of Securities Institutions and Employees, issued and taking effect on 12 March 2020, requires securities institutions and their employees to strengthen self-discipline on professional integrity. In line with requirements on anti-commercial bribery, anti-corruption, prevent the tunneling of interests. In accordance with laws and regulations, the Company has established a robust integrity internal control system and formed a management mechanism that covers the entire business process of pre-prevention, intra-event management and post-event accountability. In 2020, the Company revised Rules of CITIC Securities Co., Ltd. On Integrating to clarify management objectives and incorporate prevention and control of integrity risks in daily operations and business activities.

    The Company attaches great importance to the cultivation of integrity culture and aspires to create a clean environment. The Company posts regulatory trends, articles promoting integrity and cases of breach of integrity and carries out employee integrity management training, by means of intranet, electronic journals, and WeChat public accounts, urging employees to stick to the bottom line of professional integrity. Through the implementation of cadres incorruptible letter inquiry, organization of the disciplinary committee secretary’s incorruptible talks and signing of the Probability Letter of Integrity, the leaders’ consciousness of responsibility at all levels was strengthened, and an environment of law and discipline, clear boundaries, rules, and integrity was established in the company.

    The Company constantly strengthens the monitoring on employees’ professional practices and takes disciplinary measures against breach of rules and regulations. The Company has formulated a whistleblower mechanism, the Employee Compliance Code and Customer Complaints and Reporting System, stipulating rules for internal whistle-blowing and for reporting on violations of the Company and its employees identified by clients, and potential compliance risks. A special whistleblowing hot-line and an e-mail address are in place to provide unimpeded supervision and reporting channel for integrity management, where information of whistle-blowers is kept confidential for safety, retaliation against whistle-blowers is cracked down on and the legitimate rights and interests of whistle-blowers are well protected.

(II) Customer-Oriented
  • 1Suitability Management and Investor Education

    In strict obey the Administrative Measures on the Suitability of Securities and Futures Investors issued by the China Securities Regulatory Commission (“CSRC”), Securities Law of the People’s Republic of China, Guidelines for the Suitability Management of Investors in Securities Trading Institutions (Trial) and other laws and regulations, CITIC Securities has amended and refined relevant suitability management systems along with the customer risk assessment questionnaire and scoring rubric, published the calculation criterion for product or service risk level and followed suitability code of conduct when selling products to investors, effectively assuming the “responsibility of sellers” and safeguarding legitimate rights and interests of investors.

    In 2020, self-inspections were performed twice a year on suitability management of branches, demanding branches to prepare and submit self-inspection reports and take rectification measures accordingly. We arranged 3 sessions of on-site suitability management training for compliance champions of branches throughout the year. While an array of daily video trainings was conducted in branches on the suitability system, questionnaire revision and implementation of suitability management requirements on new businesses, e.g. STAR Market.

    In addition to providing quality service, the Company is committed to further protecting investors' rights and interests, providing proper knowledge of securities, funds and futures, strengthening the awareness of risk prevention, lifting their ability of self-protection, advocating rational investment and pushing forward the steady and orderly growth of the financial sector.

    Case:Investor Education

    CITIC Securities carried out the activity of "Month of Spreading Financial Knowledge to Households - Helping Customers to Be a Rational Investor and a Good Financial Netizen” to educate students the consequences of campus loans with real cases and advise them to be more vigilant about campus loans and to establish a correct and rational concept of financial management and consumption, with the theme of “Staying Away from Illegal Campus Loans and Adopting Rational Wealth Management Concepts”. The Company has prepared and published brochures and a compilation of cases themed “Rational Investment - Escaping Illegal Securities and Futures Traps”, the investor education handbook regarding the revised Securities Law of the People’s Republic of China, and investor education videos titled “Secret to Equity Investment” and “Rational Investors” on the official website, so as to promote rational investment.

    The Company joined hands with CSRC Investor Protection Bureau, Shanghai Stock Exchange and Dada Planet to hold a quiz game themed “Action Now - Learning and Implementing the Revised Securities Law” on the National Investor Protection Day, reinforcing the awareness of rational investment and risk prevention among investors.

  • 2Customer Service

    CITIC Securities devotes itself to provide quality, comprehensive and professional service to its customers. In order to unify service standards and improve service quality, the Company has established a series of systems, processes and specifications for various business line, and compiled the Compilation of Operational Business Regulations and Processes, covering customer service, outlets management, and business assessment to effectively improve service. In 2020, the Company took various measures to further improve customer service, built a retail customer classification system and a wealth management customer service system, and upgraded the comprehensive teller business platform, enabling efficient, high-quality and attentive customer service.

    The Company has set up the centralized customer service center to provide clients with all-round standardized business operation services such as online business handling service, securities trading consulting and customer feedback collection. Relying on the Company’s powerful information resources and research and development advantages, the services center constantly optimizes industry-leading customer voice and online interactive customer service platform, continues with business innovation, and creates an outstanding online business execution center in the securities industry.

    The Company attaches great importance to customer service work, obtains customer feedback on services through various channels, continuously optimizes service processes and improves customer satisfaction. The Company constantly improves the customer complaint protection mechanism, follows closely the requirements of the complaint management system, specifies the responsible departments and persons for complaints handling, files the complaints after closure, conducts regular inspection, includes the assessment of the handling of customer complaints into the Company’s compliance assessment system, and rewards and punishes the staff according to relevant measures. Meanwhile, the Company has established a multi-department coordination mechanism to improve the efficiency of claim processing and protect the legitimate rights and interests of customers.

(III) Product Responsibility
  • 1Information Security and Privacy Protection

    The Company strictly obeys the Securities Law of the People’s Republic of China, Law of the People's Republic of China on the Protection of Consumer Rights and Interests, Cybersecurity Law of the People’s Republic of China and other relevant laws and regulations that set out clear rules on protection of customers’ privacy. The Company adheres to the corporate information security policy of “Full Coverage, Prevention First, Classified Protection, Common Engagement and Continual Improvement”, and keeps confidential the accounts opened by customers according to law. The Customer Account Business Regulations and Operational Guidelines, Implementing Rules for the Investor Suitability Management in Brokerage Business (Trial) and other systems have been formulated, in addition to security awareness promotion, to ensure data, application and terminal security, thus closely guarding customer privacy.

    In the current year, the Company’s efforts in sensitive information protection mainly included: establishing a new terminal security management mechanism; launching the employee communication behavior monitoring system at the company level; and deploying sensitive information flow monitoring tools to monitor sensitive information flow in real time and detect leakage incidents. On the grounds of the Data Classification Guidelines for Securities and Futures Industry, the Company had launched the sensitive data masking platform to detect and mask sensitive data in an automatic, collective and standardized manner, which was more secure and efficient than manual masking by different systems individually.

  • 2Protection of Intellectual Property

    CITIC Securities strictly complies with the Advertising Law of the People’s Republic of China, Trademark Law of the People’s Republic of China, the Copyright Law of the People’s Republic of China and other laws and regulations related to intellectual property. Such laws and regulations prohibit the Company from infringing the exclusive right to use a registered trademark of a trademark registrant or infringing the copyright of a copyright owner, bringing a significant impact on the Company’s intellectual property protection. The Company has formulated relevant management measures for its trademark and copyright protection, such as the Trademark Management Measures (Trial) and Copyright Management Measures (Trial). The aforementioned management measures clearly stipulate the administrative departments and responsibilities of relevant intellectual property rights, as well as the ownership, exercise and protection of rights and interests, and designate the legal departments to instruct and supervise the implementation of the actual management. When the rights and interests of the Company are infringed upon, the legal department of the Company will safeguard its legitimate rights and interests in accordance with relevant national and local laws and regulations.

    In 2020, in a bid to deepen employees’ understanding of trademark management and intellectual property, the Company prepared the Special Issue of Regulatory Policy Information Updates of CITIC Brand Management System, in which the Company provided insight into the Trademark Management Measures of CITIC Group and relevant regulations of the Group on CITIC brand management. In addition, self-inspections were performed on usage of pictures in WeChat public accounts, Weibo and other we-media to forestall risk arising from infringement upon pictures.

  • 3Advertisement Compliance

    In line with the Advertising Law of the People’s Republic of China and Interim Measures for the Administration of Internet Advertising, advertisers are responsible for the authenticity of the advertising content, and the advertisement publishers shall check the relevant certification documents and the advertising content according to the laws and administrative regulations. We strictly comply with the provisions of these laws and regulations, and conduct strict examination and verification on the advertising content to avoid false publicity or misleading content.

(IV) Supply Chain Management

The Company carries out the procurement work with the spirit of fair and open cooperation and aims to standardize supply chain management, strengthen supply chain supervision, control supply chain risks, ensure procurement quality and safeguard the Company’s interests.

The Company’s Procurement Management Committee is the highest decision-making body of the Company’s procurement management, and the Company’s Executive Committee exercises the functions of the Procurement Management Committee. The Company strictly abides by the Procurement Management System, Operation Rules of Procurement Management and other relevant rules for procurement work and establishes the expert reviewer database, where internal and external experts provide honest and reliable opinions related to procurement and monitor the fulfilment of environmental and social responsibilities of suppliers.

The Company requires its suppliers or contractors to submit proof for their certain qualification at the stage of open bid. For example, bidders must provide ISO9001 Quality Management System and ISO14001 Environment Management System certification, as well as credit reference, balance sheets and operational performance for the last three years. By reviewing the qualifications and assessing the supply capacity and market position of the suppliers and contractors, the Company is able to minimize negative impact on the Company arising from potential environmental and social management risks.

According to the Measures for the Management of Information Technology of Securities Fund Management Institutions, the Company revised the procurement management system, such as Information System Procurement Management Measures and carried out a comprehensive combing of information technology service agencies, supervision and management, which defines the supplier and provide important information system services management process, admittance, personnel management, performance assessment and other specific management rules, so as to ensure effective supplier risk management. In actual procurement, the Company requires suppliers to provide quality, safety and environmental friendliness certificates, for example, EPEAT for environmental protection, CNAS for noise control and quality reliability test (Mean Time Between Failures, MTBF).

The Company has established a complete set of IT project and manpower outsourcing supplier management processes, and has adopted a series of measures for supplier risk management:

  • Information Security Risk Management

    In addition to signing contracts and confidentiality agreements with selected suppliers, the Company also signs Information Security Confidentiality Agreements and Third-party Personnel Information Security Operations Notifications with on-site personnel;

  • Safety Risk Management

    The Company signs the Safety Fire Protection Responsibility Letter with the project personnel and on-site outsourcing personnel to further clarify the safety fire protection responsibility;

  • Supplier Employee Rights Management

    The Company signs promotion, salary, bonus and other terms with the shortlisted human outsourcing suppliers to protect the legitimate interests of outsourcing employees.

After a supplier is included in the supplier database, the responsible management department conducts periodic review and removes unqualified suppliers. Where there are major changes of suppliers’ basic information, the Company determines whether such supplier should remain in the database according to the supplier management rules.