Securities Dealers' Reputation Risk Management Guidelines Two Times "Soliciting Opinions" Will Not Be Linked To Rating Grading.

After a thorough investigation, the guidelines for securities companies' reputation risk management (hereinafter referred to as guidelines) were issued again.

Recently, in twenty-first Century, the economic news reporter confirmed the news from the broker's office.

Prior to August 2019, the Securities Industry Association issued a draft evaluation plan for securities companies' reputation risk management capability (Draft) (hereinafter referred to as "special evaluation of risk management") and the first edition of guidelines for risk management of securities companies.

After more than half a year's research, the guidelines are issued again. Without large-scale amendments, the guidelines will be getting closer and closer to the official release. This also means that the securities dealers will usher in the era of reputation risk management.

Entering the era of reputation risk management

The guide gives a clear definition of reputation risk, that is, reputation risk refers to the risk of securities companies' negative evaluation of securities companies, such as shareholders, employees, customers, third party cooperation agencies, regulators, media and the public, etc.

Reputation events refer to related behaviors or events that trigger the reputation risks of securities companies. A major reputation event is a reputational event that has a significant negative impact on the industry image, causing significant losses in the securities industry, large fluctuations in the market, and systemic risk.

In the guidelines, the Securities Association has made detailed requirements for the reputation risk management of securities companies.

For example, the guidelines specify that securities companies should take full account of reputational risks in various areas such as strategic planning, corporate governance, business operations, information disclosure, employee behavior management, and prevent the interaction and transformation between reputational risks and other risk categories.

Combing reporters found that the guidelines also put emphasis on the importance attached to reputation risk management at all levels of the company.

The guidelines put forward the establishment of a reputation risk management framework and responsibilities at various levels including board, board of supervisors, managers, departments, branches and subsidiaries. A senior manager should be appointed to take charge of reputation risk management and set up or designate a specialized department or team to take the lead in fulfilling the reputation risk management responsibilities. At the same time, securities companies are required to set up a press spokesman system, and it is clear that their representatives will unify their external information dissemination and communication so as to ensure the unified issuance of securities companies' viewpoints and positions.

"The core of the document is the hope that the securities companies should attach importance to reputation risk management from top to bottom, hoping that this kind of attention can permeate into the corporate culture. The document covers a large number of details, which can be regarded as a guide book for securities companies to conduct reputational risk management. A large brokerage company in Beijing area compliance department said.

Temporarily not linked to rating grading.

It is worth noting that there is an important difference between the release of the draft and the 2019 version, that is, whether it should be linked to the annual classification of securities dealers.

When the draft of the first edition of the guidelines was issued in 2019, another document was issued simultaneously, that is, the special evaluation of risk management.

In this document, it is pointed out that it is necessary to evaluate the reputation risk management ability of securities companies and incorporate them into the classified evaluation system, giving full play to the guiding role of classified evaluation, and urging the securities fund operating institutions to strengthen the construction of reputation risk management ability and enhance the overall risk management capability.

Documents also directly put forward the scoring standard, that is, according to the required indicators to calculate the total score, and the whole industry ranking, to the top ranking companies to add points to encourage. However, the companies that are regarded as "ranking the public opinion and disposal effect" are in a backward position, which reflects the defects of their comprehensive risk management capability and the corresponding deduction.

However, according to the reporters' combing, the guidelines issued in this issue did not mention and classify the relevant contents of grading. In addition, this year regulators have revised the classification rules of securities companies.

Accordingly, some brokerages believe that the classified rating of 2020 does not involve the content of reputation risk management.

"Whether reputation risk management is linked to rating is a core issue. For a broker, if the hook is tied up, the company must pay attention to it. Even if it can not be added, it can not be reduced because of this content. But with regard to the current information, there is little likelihood of this year's classified rating. The brokers in Beijing think that.

Although it is temporarily not linked to the classification rating, the guideline defines the management means of the reputation risk management of the securities companies: that is, the securities association can conduct self-regulation management on the implementation of the guidelines by securities companies, and guide the reputation risk management of the securities industry, with a focus on the overall reputation risk of the securities industry.

    In addition, the guideline also proposes that the Securities Association violate the guidelines, and the association adopts self-discipline management measures according to the regulations. If the employees violate the requirements of the guidelines or the relevant requirements of the securities companies, the association will, according to the regulations, record the misconduct information from the practitioners in the practice process into the integrity information management system of the employees. Restricting the practice of honest practitioners.

More importantly, the guidelines require securities companies to establish employee reputation constraints and evaluation mechanisms. In the case of personnel recruitment and follow-up staff management, assessment, promotion and so on, the employees' historical reputation will be investigated and evaluated. (Editor: Wu Yan Ling)