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QINGDAO TODAY
在线翻译:
szdaily -> Markets -> 
Galaxy banned over IPO order mistake
    2019-07-11  08:53    Shenzhen Daily

ONE of China’s biggest brokerages is barred from investing its own money in initial public offerings (IPOs), after the firm’s staff failed to meet a deadline to place orders on a new trading venue for technology stocks.

Proprietary accounts of China Galaxy Securities Co. are suspended from this month through January 2020, according to the Securities Association of China.

The firm will demote its head of trading and has warned other officials linked to the breach of rules on the IPO of Suzhou TZTEK Technology Co., Galaxy Securities said earlier this week.

The punishment, meted out by a self-regulated industry body under the China Securities Regulatory Commission, shows how serious authorities are on enforcing compliance as they near the July 22 start of the so-called tech board.

The project, announced by President Xi Jinping, is key to policymakers’ goal of deepening capital markets after decades of relying on State-run banks to fund the economy, and could help develop the technology sector that’s being affected by the trade war with the United States.

“Regulators want to make sure every link of the new tech board is rigorously implemented and foolproof,” said Lin Jin, an analyst at Shenwan Hongyuan Securities Co. “IPO subscription rules on the new board are more rigid than on the main board, so one breach will get a broker added to the blacklist.”

Galaxy Securities’ staff bid for shares of Suzhou TZTEK on June 27 and the bid was accepted. But traders didn’t place final orders by the designated time on the July 2 subscription date for institutional investors, the firm said.

“Galaxy Securities highly values the new tech board and the company has reiterated that investment banking, brokerage, proprietary investment, and IT departments should be fully prepared for the board,” it added.

The bid was for 6.4 million shares, according to a Suzhou TZTEK filing, worth about 163 million yuan (US$24 million) based on the final pricing of 25.5 yuan. Brokerages are typically allotted only a portion of their total bid. Galaxy Securities is ranked No. 10 by market capitalization among Chinese peers.

“Money-wise, the impact of the ban is limited, it’s more a damage on their reputation,” said Wang Jiyue, general manager at Shanghai Pegasus Consulting Co.

“A minor mistake like this should not happen and it speaks about the internal risk controls of Galaxy Securities.” (SD-Agencies)

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