The Company actively implements the Work Outline of Development the Culture of the Securities and Funds Industry and Prevention of Ethics Risks issued by the CSRC, and carries out the culture of “Compliance, Integrity, Professional and Robust” of the industry. The Company set up CITIC Securities Work Plan of Promotion Corporate Culture and CITIC Securities Supporting System and Improvement Plan for Corporate Culture Development, specifying the goal and direction for the Company’s corporate culture development.

The Company has inherited the excellent culture gene of “Compliance, Decency, Practical, Innovation, Modest, Prudence, Solidarity, Diligence, Vigor and Action” from the CITIC Group, and has gradually formed a crisis consciousness of facing up to problems, respecting the market, and actively seeking changes, a style of being modest and prudent in action, and corporate culture tradition of diligence, frugality and concision. The Company has formed operation management principles and corporate culture of “seven principles” through practice and improvement.

The Company values the promotion of the industry culture and corporate culture. For example, we set up a special column in the Company’s website and intranet for promotion of corporate culture and industry culture development requirements. We incorporate corporate culture, professional ethics and integrity in the Company’s internal training, and set up a showroom for Party construction and corporate and collect and present pictures of the Company’s Party construction and the Company’s development milestones, so as to strengthen Party construction, carry forward the Company’s corporate culture, and enhance unity among staff.

The Company has always been committed to strengthening the management and control of integrity, compliance and risk prevention, and promoting the implementation of relevant systems and mechanisms by means of institution, system construction, publicity and education. The Company’s management institution and system have a good effect on promoting honesty, self-discipline and compliance management. In 2019, the Company has no major violations of laws and regulations.

In 2019, the Company won the awards (or participated in the selection of) such as “Top 100 CITIC Trustees”, “Excellent Accountants”, “Chairman Awards” and “Excellent Confidential Working Groups/Individuals” in praise of teams and individuals who have made outstanding contributions to integrity, compliance, and risk prevention. Meanwhile, the Company’s value orientation was stated, employee’s behavior was guided, and violations of the Company’s rules and regulations of integrity were punished.
Anti-Money Laundering

The Company fully complies with relevant laws and regulations such as the Anti-Money Laundering Law of the People’s Republic of China. The Anti-Money Laundering Law of the People’s Republic of China stipulates that the financial institutions should build a sound Anti-money laundering internal control system, set up anti-money laundering specialized institutions or assign internal institutions to be responsible for the anti-money laundering work, establish a serious of anti-money laundering rules of client identification, client information and transaction records, the big deals and suspicious transactions reporting, to implement financial institution anti-money laundering obligations.

The Company organizes relevant departments to continuously revise the relevant anti-money laundering systems and operating standards, implement the daily anti-money laundering basic work, and continuously improve the level of prevention and control of the company’s money laundering risks according to the changes of relevant regulatory regulations and the needs of the Company’s business operation and management.

In 2019, the Company implemented a series of anti-money laundering work in accordance with the key Anti-Money Laundering regulations of the People’s Bank of China. On the basis of the current relatively complete system, the Company further revised the Company’s Anti-Money Laundering Management Measures to refine and improve the organizational structure and risk management functions of money laundering, clarify the duties of money laundering risk prevention and control, and effectively improve the Anti-Money Laundering work effectiveness; Revised the CITIC Securities Risk Appetite Statement, introduced and clarified the goals, risk tolerance and risk appetite of money laundering risk management; Revised the Comprehensive Risk Management System and formulated the Money Laundering Risk Management Strategy to clarify the management principles and management measures for money laundering risks, formed a group-level money laundering risk management system applicable to CITIC Securities and its subsidiaries. On this basis, the Company refined various systems and work guidelines, and successively issued work systems on regulatory reporting, information sharing, assistance in anti-money laundering investigations, and emergency treatment of money laundering risks, and compiled specific tasks such as list monitoring and customer identification guidelines.

In 2019, the Company continued to optimize the anti-money laundering system, rebuilt the Company’s anti-money laundering and anti-terrorist financing list monitoring system, and further improved the monitoring and early warning mechanism of potential money laundering risks in customers and transactions.

Combating Corruption and
Upholding Integrity

The Company always advocates the integrity and self-discipline of employees, attaches great importance to the construction of honesty and integrity, and deeply understands that honesty and integrity are valuable intangible assets of the Company. “Observation of the law, honesty and integrity” is the Company’s code of conduct, which is also the professional ethics that staff should uphold. The Company identifies and follows relevant laws and regulations such as the Anti-Unfair Competition Law of the People’s Republic of China and the Regulations on the Integrity of Securities and Futures Operation Institutions and Employees. The Anti-Unfair Competition Law of the People’s Republic of China requires that the Company shall not use property or other means to bribe relevant units or individuals in order to seek trading opportunities or competitive advantages; the Regulations on the Integrity of Securities and Futures Operation Institutions and Employees states securities and futures operating agencies and their staff shall not transmit and seek improper benefits in various forms in the securities and futures business activities.

In 2019, the Company actively implemented regulations of anti-commercial bribery. anti-corruption, and prevention of benefits transmission, and attached great importance to the construction of prevention system of corruption. The Company has established an employment work system of integrity, further sorted out and improved the employment management organization structure of integrity, clarified the management responsibilities and work responsibilities of relevant departments and subjects, and formed a management mechanism that covers the entire business process of pre-prevention, intra-event management and post-event accountability, infiltrated the risk prevention and control work of corruption into all aspects of daily operations and business activities. Meanwhile, the Company establishes a file of integrity practices, and incorporates the integrity practices of all units and employees into employee performance assessment and personnel management.

In 2019, the Company strictly implemented the Measures for Addressing Non-compliances and Malpractices of the Staff to better fulfill honest practices and punish non-compliances and malpractices. The Company also formulated and issued Honest Working Regulations to make clear requirements to employees about the commercial secrets, professional ethics, family members and stakeholders avoidance, prevention of commercial bribery, financial discipline, etc. and made clear and detailed requirements of the prohibited behavior in various business activities.

In order to effectively implement the integrity management of employees and timely discover potential violations of discipline and discipline, the Company continued to strengthen the monitoring and management of employees’ professional practices and emphasized the serious accountability of employees who violate regulations and discipline. The Company has set up a special report hot-line and e-mail for supervision of integrity and problem reporting.

The Company attaches great importance to the training and publicity of integrity. The Company sets up and promotes special online learning courses, conducts integrity warning education for all employees, and regards corporate integrity management requirements as the focus of new employee induction training. The Company publishes regulatory trends through various forms such as intranet, electronic journals, and WeChat public accounts to publicize cases of breach of 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.

Compliance Management

The Company strictly complies with a series of compliance management systems such as the Compliance Reporting System, the Unregistered Information Insider Registration System, the Management Measures for Compliance Specialists, and the Management Measures for Bond Trading Business. In 2019, the Company formulated or revised 19 basic compliance management systems such as Provisions for the Management of Employees’ Professional Qualifications, Interim Provisions for the Management of Part-time Employees, Collaborative Work System for Client Securities Trading Behavior Management and Self-Regulatory Supervision, Employee Post Communication Behavior Monitoring System in accordance with changes in laws, regulations, standards, and the needs of the Company’s business operations and management, combined with issues found in daily compliance management and regulatory agency law enforcement inspections.

In 2019, the Company actively responded to regulatory requirements, strengthened risk management and staffing of the compliance team through internal transfers and external recruitment, and selected full-time compliance specialists at branches to further enhance the Company’s risk management and compliance management capabilities; At the same time, the Company newly established an independent internal verification department to strengthen the professional review of investment banking business. Meanwhile, the Company’s E-Learning system was used to conduct compliance tests on all employees at the Company’s headquarters. The test content included basic professional ethics requirements such as integrity.

When onboarding, new employees are required to sign the Legal Responsibility Warning and Commitment Letter and fill in the securities account of qualification certificate, part-time job and other information. The Company’s Compliance Department reviews the above information and employee integrity information. And in the new employee training in 2019, the special chapter emphasized the professional ethics requirements such as l observation of the law, honesty and integrity.

In 2019, the Company conducted targeted compliance education and training through case-warning educations, compliance and practice tips, and erected a continuous law-abiding compliance awareness and practice concept, to effectively prevent employees from violating practitioners’ practice standards or participating in illegal and criminal activities.