Guotai Haitong Asset Management Fined RMB52.55 Million for QDII Forex Violations

The Shanghai branch of the State Administration of Foreign Exchange recently disclosed administrative penalty information. Shanghai Guotai Haitong Securities Asset Management Co. , Ltd. was warned, had illegal gains confiscated, and was fined for violating the foreign exchange administration regulations on qualified domestic institutional investors' overseas securities investment and failing to conduct indirect declaration of balance-of-payments statistics as required. The total amount confiscated and fined was RMB52.5474 million. The penalty was based on Article 6 of the Regulations on Foreign Exchange Administration for Qualified Domestic Institutional Investors' Overseas Securities Investment and Articles 7 and 10 of the Measures for the Declaration of Balance-of-Payments Statistics. Guotai Haitong Securities Co. s 2026 semi-annual report disclosed that from 2019 to 2022, Guotai Haitong Asset Management was ordered to rectify and given warnings due to certain products violating relevant regulations, including a fine of RMB25.874 million and confiscation of illegal gains of RMB26.6734 million. The RMB52.5474 million in this penalty is the sum of the aforementioned fine and confiscated illegal gains. The violations were discovered during an on-site inspection of the former Guotai Junan Securities and occurred before the merger of Guotai Junan and Haitong Securities. On April 30, 2026, Guotai Haitong Asset Management signed an absorption merger delivery agreement with Haitong Asset Management, whereby all assets, liabilities, business, and personnel of Haitong Asset Management were inherited by Guotai Haitong Asset Management. The responsible person, Zhang, was warned and fined RMB70,000 for bearing direct responsibility for the company's handling of foreign exchange business in violation of regulations during his tenure at the asset management company. Guotai Haitong was warned and fined RMB150,000 for failing to conduct direct declaration of balance-of-payments statistics and violating foreign exchange account management regulations. On the evening of August 18, Guotai Haitong disclosed its 2026 semi-annual report. In the first half of the year, the company achieved operating revenue of RMB47.163 billion, up 97.56% year-on-year; net profit attributable to shareholders of the parent company was RMB20.260 billion, up 28.74% year-on-year. In the second quarter, it achieved operating revenue of RMB30.931 billion and net profit attributable to shareholders of the parent company of RMB13.871 billion. Guotai Haitong Asset Management is a 100% directly held subsidiary of Guotai Haitong, with registered capital of RMB2 billion. In the first half of the year, it achieved operating revenue of RMB1.625 billion and net profit of RMB333 million, up 71.41% and 31.1% year-on-year, respectively. As of the end of June, its total assets were RMB12.649 billion and net assets were RMB10.034 billion. According to the SAFE's disclosure of QDII investment quota approvals as of the end of June 2026, Guotai Haitong Asset Management was approved for a QDII investment quota of USD2.33 billion. In its semi-annual report, Guotai Haitong stated that regarding the above foreign exchange penalty, the company and Guotai Haitong Asset Management have fully completed rectification, and the penalty has no impact on current normal business operations. As of the close on August 24, Guotai Haitong's A-shares closed at RMB17.64 per share, up 1.5%; its H-shares closed at HKD15.180 per share, up 1%.