Xiangcai Securities Receives Warning Letter: Insufficient Risk Disclosure in Brokerage Business Development

China Economic Net, Beijing, April 6 — The Hunan Securities Regulatory Bureau website released on April 3 a decision regarding administrative measures to issue a warning letter to Xiangcai Securities Co., Ltd., which shows that, upon investigation, during the course of Xiangcai Securities Co., Ltd.’s conduct of securities brokerage business, the company did not provide sufficient disclosure of business risks, and its oversight was not adequate with respect to areas including the hiring of branch institutions and practitioners, marketing activities, and investment advisory business. In the handling of related complaints, the company also failed to thoroughly identify issues such as the improper handling of past business affairs, and it did not promptly detect employees’ violations.

The above conduct violates the relevant provisions of Article 10, Paragraph 1; Article 13, Paragraph 1; Article 32; Article 34, Paragraph 1; and Article 36, Paragraph 1 of the 《Measures for the Administration of Securities Brokerage Business》（CSRC Order No. 204), as well as Article 6, Item 4 of the 《Compliance Administration Measures for Securities Companies and Securities Investment Fund Management Companies (Revised in 2020)》（CSRC Order No. 166).

Pursuant to Article 43 of the 《Measures for the Administration of Securities Brokerage Business》 and Article 32, Paragraph 1 of the 《Compliance Administration Measures for Securities Companies and Securities Investment Fund Management Companies (Revised in 2020)》, the Hunan Securities Regulatory Bureau has decided to take the administrative regulatory measure of issuing a warning letter to Xiangcai Securities, and to record it in the integrity archive for the securities and futures markets.

The original text is as follows:

Decision on Administrative Measures to Issue a Warning Letter to Xiangcai Securities Co., Ltd.

Xiangcai Securities Co., Ltd.:

Upon investigation, you company, in the course of carrying out securities brokerage business, provided insufficient disclosure of business risks, and your oversight was not adequate in areas including the hiring of branch institutions and practitioners, marketing activities, and investment advisory business; in the process of handling related complaints, you failed to identify issues such as improper handling of past business affairs, and you did not promptly discover employees’ violations.

The above conduct violates the relevant provisions of Article 10, Paragraph 1; Article 13, Paragraph 1; Article 32; Article 34, Paragraph 1; and Article 36, Paragraph 1 of the 《Measures for the Administration of Securities Brokerage Business》（CSRC Order No. 204), as well as Article 6, Item 4 of the 《Compliance Administration Measures for Securities Companies and Securities Investment Fund Management Companies (Revised in 2020)》（CSRC Order No. 166). Pursuant to Article 43 of the 《Measures for the Administration of Securities Brokerage Business》 and Article 32, Paragraph 1 of the 《Compliance Administration Measures for Securities Companies and Securities Investment Fund Management Companies (Revised in 2020)》, my bureau has decided to take the administrative regulatory measure of issuing a warning letter to your company, and to record it in the integrity archive for the securities and futures markets. You company should attach great importance to this, seriously carry out rectification for the above issues, and submit a written rectification report to my bureau within one month from the date of receipt of this decision letter. My bureau will continue to monitor the progress of rectification in daily supervision.

If you are dissatisfied with these regulatory measures, you may, within 60 days from the date of receipt of this decision letter, file an application for administrative reconsideration with the China Securities Regulatory Commission; you may also, within 6 months from the date of receipt of this decision letter, bring a lawsuit in a people’s court with jurisdiction. During the period of reconsideration and litigation, the above regulatory measures shall not be suspended.

Hunan Securities Regulatory Bureau

April 1, 2026

(Responsible editor: Hua Qingjian)

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