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[Introduction] Bohai Securities receives a regulatory warning letter

China Fund News reporter Mo Lin

On April 3, due to violations by employees and internal management issues, Bohai Securities was subject to supervisory management measures by the Tianjin CSRC, requiring it to issue a warning letter, and the matter was also recorded in the integrity file for the securities and futures markets.

Two major violations exposed

In the notification, the Tianjin CSRC pointed out that Bohai Securities has two main issues. First, during their tenure, certain employees had engaged in the trading of stocks by borrowing other people’s securities accounts; second, certain employees had served concurrently in both the proprietary trading department and the investment banking department.

The regulatory authority believes that the above issues reflect that Bohai Securities’ personnel management is not up to standard, violating relevant provisions of the 《Measures for Compliance Management of Securities Firms and Securities Investment Fund Management Companies》 (CSRC Order No. 166) Article 3 and Article 6, Item 6, the 《Measures for the Supervision and Administration of Directors, Supervisors, Senior Management Personnel and Practitioners of Securities and Fund Operating Institutions》 (CSRC Order No. 195) Article 35 and Article 45, as well as relevant provisions of the 《Guidelines for Internal Control of Securities Companies》 Article 16.

The CSRC has decided to take supervisory management measures requiring the company to issue a warning letter, and record the matter in the integrity file for the securities and futures markets. Your company should take this as a lesson, conduct a serious review and rectification of the problems, strengthen management of practitioners, effectively improve the level of personnel management, prevent such issues from happening again, and submit a written rectification report to my office within 30 days from the date you receive this decision.

It is worth noting that this is not the first time Bohai Securities has received a penalty due to inadequate personnel management.

On February 20, 2025, the Beijing CSRC issued a warning letter to Bohai Securities’ Beijing Guangshun North Dajie Securities Branch. After investigation, the branch failed to promptly detect employees’ unauthorized sale of private placement products, and also failed to hold employees accountable for违规 conduct in engaging in profit-making operations in violation of internal systems.

The regulatory authority pointed out that this reflects insufficient compliance and effectiveness in the branch’s management of practitioners.

On August 22 of the same year, the Guangdong CSRC again took action. It took administrative regulatory measures ordering rectification against Bohai Securities’ Guangdong Branch, and issued a warning letter to Xiao Nuo Xun, a practitioner of the Shantou Jinsalu Securities Branch under it.

The grounds for punishment include two aspects: first, after the Guangdong Branch became aware of major events occurring at the subordinate branch that could potentially affect business management and the interests of customers, it failed to report to the regulator in a timely manner; second, the head of the subordinate branch violated regulations in operating customers’ securities accounts.

Frequent compliance problems, equity auctions fail to clear

A decade of IPO long-distance running still hasn’t paid off

Bohai Securities’ IPO application was launched in 2016, and to date it has been 10 years—the process can be described as full of twists and turns. The latest update to the filing materials was made on December 31, 2024, but it still has not shown that the Shanghai Stock Exchange has resumed its listing review; the current review status is “ has been asked ”.

In recent years, in addition to frequent compliance issues, Bohai Securities has also been deeply embroiled in changes in its equity.

According to information obtained by a reporter, since 2024, Bohai Securities has seen multiple blocks of equity enter judicial auction procedures due to disputes over shareholders’ debts, including the 167 million shares held by Tianjin Haowu Jiade Auto Trading Co., Ltd., and the 0.76094% equity interest held by Zhengrong Group, Bohai Securities’ eighth-largest shareholder; however, all these shares ultimately ended up being auctioned off for lack of bidders.

Although Bohai Securities’ equity structure shows a “ state-owned assets-led ” characteristic—its actual controller, the Tianjin Municipal State-owned Assets Supervision and Administration Commission, holds control of 63.28% of shares through 14 shareholders—under the 《Administrative Measures for the Issuance of Stocks and Listing》, a company applying to be listed must meet the basic condition of “ ‌ clear shareholding, and no major ownership disputes regarding the shares held by the controlling shareholder and the shareholders controlled by it ‌ ”. However, equity rights resulting from judicial auctions are unstable, which has always been one of the core concerns for regulators.

As for performance, against the backdrop of an overall rebound in brokerage firms’ performance, Bohai Securities’ revenue and net profit still dropped significantly. According to the company’s 2025 semi-annual report disclosed in its bond interim report, in the first half of the year Bohai Securities achieved operating total revenue of 947 million yuan, down 21% year on year; net profit attributable to the parent was 251 million yuan, down 34.6% year on year.

Meanwhile, judging by the data disclosure basis published on the China Securities Association’s official website, in the first half of 2025, 150 brokerages achieved operating revenue of 251.04B yuan, up 23.47% year on year; net profit was 112.28B yuan, up 40.37% year on year, and the net profit-to-revenue ratio was 44.73%.

Proofread by: Jiyuan

Produced by: Fleet Captain

Reviewed by: Muyu

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