What are the intermediary introducing services of securities companies?
IB (Introducing Broker) refers to an institution or individual that accepts the entrustment of a futures broker, introduces customers to the futures broker, and A business model that charges a certain commission. So what are the intermediary introduction services of securities companies? Let’s find out together!
(1) Qualification conditions
1. Securities companies are qualified to apply for introduction business. The following conditions should be met:
(1) All risk control indicators in the six months before the application date meet the prescribed standards.
(2) A third-party custody system for customer transaction settlement funds has been established in accordance with regulations.
(3) Wholly owns or controls a futures company, or is controlled by the same institution as a futures company, and the futures company has the membership of a futures exchange that implements the membership tiered settlement system, 2 days before the application date The monthly risk supervision indicators continue to meet the prescribed standards.
(4) Equipped with necessary business personnel, there should be at least 5 business personnel at the company headquarters and at least 2 business personnel with futures practitioner qualifications in the sales department planning to carry out introduction business.
(5) The business rules, internal control, risk isolation and compliance inspection systems related to the introduction business have been established and improved in accordance with regulations.
(6) Have technical systems that meet business needs.
(7) Other conditions stipulated by the China Securities Regulatory Commission based on market development and prudential supervision principles.
(2) Business Scope
1. When a securities company is entrusted by a futures company to engage in introduction business, it shall provide the following services:
(1) Assist in the account opening procedures .
(2) Provide futures market information and trading facilities.
(3) Other services specified by the China Securities Regulatory Commission.
Securities companies are not allowed to conduct futures trading, settlement or delivery on behalf of clients, are not allowed to collect and pay futures margins on behalf of futures companies and clients, and are not allowed to use securities capital accounts to deposit, withdraw, or transfer futures margins for clients.
2. When a securities company engages in introduction business, it shall sign a written entrustment agreement with a futures company. The entrustment agreement shall specify the following matters:
(1) Introduction to the scope of the business.
(2) Measures to implement the futures margin safe depository system.
(3) Introduce business docking rules.
(4) How to receive and handle customer complaints.
(5) Method of payment of remuneration and sharing of related expenses.
(6) Liability for breach of contract.
(7) Other matters prescribed by the China Securities Regulatory Commission.
(3) Business rules for securities companies to provide intermediary services
Securities companies can only accept entrustment from futures companies that they wholly own or control, or are controlled by the same institution. For introduction business, you cannot accept entrustment from other futures companies to engage in introduction business.
A securities company shall disclose the following information in a conspicuous location of its business premises or on its website:
1. The scope of the entrusted introduction business.
2. List and photos of managers and business personnel engaged in introduction business.
3. Futures company’s futures margin account information and futures margin safe depository methods.
4. Customer account opening and transaction process, deposit and withdrawal process.
5. How to query transaction settlement results.
6. Other information specified by the China Securities Regulatory Commission.
When a securities company introduces a client to a futures company, it shall clearly indicate to the client its introduction business entrustment relationship with the futures company, explain the methods, procedures and risks of futures trading, and shall not make profit guarantees or guarantees. Risks and other commitments shall not be falsely promoted or mislead customers.
Securities companies are not allowed to issue trading instructions on behalf of clients, are not allowed to use clients’ trading codes, capital accounts or futures settlement accounts to conduct futures transactions, and are not allowed to receive, keep or modify trading passwords on behalf of clients. Securities companies shall not directly or indirectly provide financing or guarantee for customers to engage in futures trading.
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