More Than a Dozen Fines Issued: Compliance Issues at Financial Street Securities Remain Unresolved

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（Source: Economic Information Daily）

Recently, Hong Kong-listed brokerage firm Financial Street Securities announced that non-executive director Wang Linjing was previously penalized by multiple local securities regulatory bureaus for violations related to information disclosure during her tenure at Tianfeng Securities. The company stated that this incident is unrelated to the group’s affairs and other directors and senior management, and will not affect the group’s business operations.

Financial Street Securities has been in the news frequently lately. Due to internal control issues, it has received more than ten regulatory fines from the Inner Mongolia branch of the People’s Bank of China and various securities regulatory bureaus over the past few months. This longstanding brokerage, renamed in September 2025, faces questions about how it will resolve its internal control “crisis” after introducing state-owned capital, and what opportunities and challenges lie ahead in its development path. These remain to be seen.

Regulatory Fines Target Internal Control Issues

According to relevant regulatory announcements, Wang Linjing, non-executive director of Financial Street Securities, was warned and fined 3 million yuan by the China Securities Regulatory Commission (CSRC) Hubei Bureau for violations related to information disclosure during her tenure at Tianfeng Securities. Tianfeng Securities was publicly reprimanded by the Shanghai Stock Exchange for violations in information disclosure and operational compliance, with related sanctions recorded in the securities market integrity database. Additionally, Tianfeng Securities was warned and fined 1.4 million yuan by the CSRC Fujian Bureau for failing to disclose changes in Yong’an Forestry’s shareholding in a timely manner.

Wang Linjing confirmed to Financial Street Securities that, aside from the disclosed information, there are no other materials that need to be disclosed according to listing rules, nor any matters that require shareholder attention.

The company and its board stated that this incident is unrelated to the group’s affairs and other directors and senior management, and will not impact the group’s business operations. The company will continue to monitor the situation and release further announcements as required by listing rules.

In the past four months alone, Financial Street Securities has received over ten regulatory fines due to internal control and other issues.

In March this year, the Inner Mongolia branch of the People’s Bank of China issued an administrative penalty decision. The decision states that Financial Street Securities was fined 1.412 million yuan for violations including failure to improve anti-money laundering internal controls and failure to report suspicious transactions, with a public disclosure period of three years.

Additionally, from late 2025 to early 2026, the company received multiple fines from securities regulatory bureaus in Inner Mongolia, Guangdong, Shanghai, and other regions.

In January 2025, the Shanghai Securities Regulatory Bureau issued four fines to Financial Street Securities, involving two branches in Hongkou District, Feihong Road and Hailun Road, and two employees. Violations included employees recommending non-proprietary products for profit, incomplete record-keeping of investment advisory activities, and soliciting clients through third parties. All involved parties received warning letters.

By the end of December 2025, the Inner Mongolia Securities Regulatory Bureau penalized the company’s headquarters and five employees. Investigations found that employees in multiple locations engaged in private sales of non-proprietary products, organized clients to sign private placement agreements and funnel funds into personal accounts, used non-compliant and misleading private placement materials, and provided improper benefits to clients during sales. The regulator ordered the company to increase internal compliance checks, submit compliance reports every three months in 2026, and complete rectification within three months. The five employees involved received warning letters.

At the same time, the Guangdong Securities Regulatory Bureau issued warning letters to its Chaozhou Xitai Avenue branch and two employees for violations including false promises of principal and yield guarantees and private sales of non-company products.

According to incomplete statistics, from December 2025 to March 2026, Financial Street Securities received a total of 13 fines—four at the corporate level and nine at the employee level. Core violations include private sales of non-proprietary products, promises of principal and yield guarantees, and deficiencies in anti-money laundering internal controls. Industry insiders believe this reflects serious internal control failures and compliance management issues within the company’s branches.

Strategic Restructuring Faces Uncertainty

Financial Street Securities was originally named Hengtai Securities, founded in December 1998. In 2022, Tianfeng Securities transferred its 249 million shares of Hengtai Securities to Beijing Huarong Comprehensive Investment Co., Ltd. for 1.8 billion yuan. Subsequently, Beijing Financial Street Investment (Group) Co., Ltd., through its controlling platform, held a total of 29.99% of the company’s shares and was approved by the CSRC on January 30, 2023, to become the main shareholder, establishing actual control over Hengtai Securities.

In September 2025, the company renamed itself Financial Street Securities. Industry insiders believe this move aims to leverage the state-owned capital background and brand advantages of Financial Street Group, to shed the previous private capital-led label, and to achieve a strategic leap from a regional broker to a nationwide integrated financial service platform.

Since 2025, Financial Street Securities has experienced intensive senior management changes and corporate governance restructuring.

According to an announcement from the company’s special shareholders’ meeting on November 25, 2025, the meeting approved the abolition of the supervisory board and amendments to the Articles of Association with 100% approval. The supervisory board was officially dissolved on that day, and supervisors Li Lue, Chen Feng, and Wang Hui no longer serve as supervisors.

There have also been frequent changes in senior management. Industry insiders say that while the arrival of new management teams may cause strategic discontinuity, internal control gaps, and compliance risks, it can also provide opportunities for strategic reshaping and organizational revitalization.

Previously, Financial Street Securities disclosed an impressive 2025 performance forecast. The announcement showed that by December 31, 2025, the company’s net profit attributable to shareholders was approximately 327 million yuan, a significant increase from 176 million yuan in 2024, representing about an 86% year-on-year growth. The board stated that the increase compared to 2024 was mainly due to higher income from securities brokerage and proprietary trading.

Looking ahead, how Financial Street Securities will address its compliance gaps and what opportunities and challenges its strategic restructuring after introducing state-owned capital will bring remain to be seen.