From Pilot to Implementation! China Securities Association Officially Launches, 6 Leading Brokerages Take the Lead

Broker China reporters have learned from industry insiders that recently, the China Securities Association (CSA) issued the “Notice on the First Batch of Consolidation Management Reports and Risk Control Indicator Submissions for Transition Period Securities Firms,” officially launching the submission of consolidation management reports and risk control indicators for the first batch of securities firms in the transition period. This marks that since the release of the “Guidelines for Consolidated Management of Securities Companies (Trial)” (the Guidelines), industry supervision of consolidations has moved from institutional framework construction to substantive implementation.

According to the notice, the six leading securities firms that have officially implemented the main system for consolidation supervision pilot are China International Capital Corporation (CICC), China Merchants Securities, CITIC Securities, Huatai Securities, CITIC Construction Investment Securities, and Guotai Haitong Securities.

It is understood that, according to the relevant requirements of the CSA’s “Guidelines for Consolidated Management of Securities Companies (Trial),” securities firms should report their annual consolidation management status to the CSA within four months after the end of each fiscal year. They should also calculate risk control indicators related to the consolidation management system based on the annex of the Guidelines and regularly submit these to the CSA.

The notice states that relevant securities firms should submit a report on their consolidation management for the previous year within four months after the end of each fiscal year. The report should include, but not be limited to, the organizational structure for consolidation management, scope of consolidation, implementation of various elements of consolidation management, and other major matters. By April 30, 2026, they should submit the 2025 consolidation management report, with subsequent years following the same schedule.

In 2020, through industry peer review and external expert evaluation, six securities firms—CICC, China Merchants Securities, CITIC Securities, Huatai Securities, CITIC Construction Investment Securities, and Guotai Junan (now Guotai Haitong)—had basically established comprehensive risk management systems capable of effectively covering various risks, business lines, and subsidiaries, preliminarily meeting the conditions for implementing consolidation supervision. The China Securities Regulatory Commission (CSRC) decided to include these six firms in the first batch of consolidation supervision pilot programs.

In April 2025, the CSA drafted and released the “Guidelines for Consolidated Management of Securities Companies (Trial).” The CSA stated that in recent years, the domestic capital market has continued to develop, and securities firms are gradually moving toward integrated operations. It is necessary to expand the industry’s risk management boundaries from the parent company level to the overall parent-subsidiary perspective to facilitate more comprehensive, timely, and effective risk assessment and control, promoting steady industry development. In 2016, preparations for the consolidation supervision pilot were initiated under the CSRC’s organization, and in early 2020, six securities firms were officially approved to implement the pilot. After more than five years of practice, some experience has been accumulated.

The CSA notes that in recent years, the number of domestic and foreign securities institutions has continued to grow, business areas have expanded, and complexity has increased. Integrated operations face many challenges, and strengthening securities firms’ governance, capital management, risk management, and financial management has become increasingly important and necessary. There is still a need to introduce a unified, comprehensive, operational, and forward-looking industry-wide consolidation management guideline. Developing such a guideline for the entire industry is of great significance for guiding securities firms to improve their consolidation management structures and models, strengthen control over subsidiaries, and continuously enhance core competitiveness and overall industry risk management.

Considering industry realities and system adjustments, the “Guidelines for Consolidated Management of Securities Companies (Trial)” set different transition periods for different types of securities firms. First, securities firms that have already implemented the consolidation supervision pilot will have a transition period of one year from the date of release. Second, securities firms with overseas subsidiaries will have a transition period of two years. Third, other securities firms will have a transition period of three years.

In February this year, Cinda Securities stated in its shareholders’ meeting materials that, in accordance with the relevant provisions of the CSA’s “Guidelines for Consolidated Management of Securities Companies (Trial),” the company has established a corporate governance structure based on consolidation management and improved related governance systems.

By the end of 2025, at CITIC Construction Investment Securities’ shareholders’ meeting, in the proposal “Amendments to the Articles of Association, Shareholders’ Meeting Rules, and Board Rules,” CITIC Construction Investment Securities indicated that the main contents of the revisions include: 1) implementing amendments related to the Company Law and supporting regulations; 2) implementing amendments related to the “Regulations on Comprehensive Risk Management of Securities Companies” and the “Guidelines for Consolidated Management of Securities Companies (Trial)”; 3) making normative adjustments based on other regulatory rules.

Formatting: Wang Yunpeng

Proofreading: Wang Jincheng