Securities Association of China drafts conduct code for sponsor representatives
In short
The Securities Association of China has drafted a code of professional conduct for sponsor representatives and is seeking comment from the industry, Securities Times reported. The draft bars using the output of artificial intelligence tools in place of professional judgment and bars "signing without sponsoring". It also spells out in more detail the cases in which taking equity stakes is not allowed, including pre-investment before a project is approved.
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The Securities Association of China (中证协) has organised the drafting of a Code of Professional Conduct for Sponsor Representatives (Draft for Comment) and is seeking comment on it from the industry, Securities Times reported on October 9. Yicai, CLS and 36Kr all carried the report. The draft sets out basic professional requirements for sponsor representatives. It bars them from using the output of artificial intelligence tools in place of their own professional judgment, and it bars "signing without sponsoring" (只签不保). [ 1 , 2 , 3 ]
According to the report, the draft makes integrity requirements apply to every part of the business: project solicitation, project execution, issuance and underwriting, and continuous supervision. It describes in more detail the cases in which passing on improper benefits or seeking improper benefits is prohibited, and the cases in which taking equity stakes is not allowed. The ban on irregular equity stakes would apply throughout the sponsorship process. It would cover covert practices such as pre-investment before a project is approved and retroactive benefit arrangements after a project is terminated. The draft would also improve the obligations to avoid and report conflicts of interest. [ 1 , 2 , 3 ]
Why it matters
The draft sets integrity requirements that apply to every stage of sponsorship work, from winning a project to ongoing supervision. It names covert practices such as investing before a project is approved and arranging benefits after a project ends, and it would tighten rules on avoiding and reporting conflicts of interest.
Key facts
- The Securities Association of China (中证协) organised the drafting of the Code of Professional Conduct for Sponsor Representatives (Draft for Comment) (《保荐代表人执业行为规范（征求意见稿）》). [ 1 , 2 , 3 ]
- The association is seeking comment on the draft from the industry. [ 1 , 2 , 3 ]
- The draft bars sponsor representatives from using the output of artificial intelligence tools in place of professional judgment. [ 1 , 2 , 3 ]
- The draft bars "signing without sponsoring" (只签不保). [ 1 , 2 , 3 ]
- Integrity requirements are to apply to project solicitation, project execution, issuance and underwriting, and continuous supervision. [ 1 , 2 , 3 ]
- The draft bans irregular equity stakes throughout the sponsorship process, covering pre-investment before a project is approved and retroactive benefit arrangements after a project is terminated. [ 1 , 2 , 3 ]
- The draft would improve obligations to avoid and report conflicts of interest. [ 1 , 2 , 3 ]
Confirmed by several sources
- Nothing is confirmed by two independent outlets yet.
Still unclear
- How long the comment period lasts and when the code would take effect. None of the reports gives a deadline for comments or a start date.
- Whether any outlet has seen the draft independently. All three reports carry the same text and credit Securities Times as their source.
- The Securities Association of China drafted a code of professional conduct for sponsor representatives and is seeking comment from the industry. Reported by a single source so far
- The draft bars using the output of artificial intelligence tools in place of professional judgment, and bars "signing without sponsoring". Reported by a single source so far
- The draft details the cases of irregular equity stakes, covering pre-investment before project approval and retroactive benefit arrangements after a project is terminated. Reported by a single source so far