The China Securities Regulatory Commission imposed administrative penalties on Hehe Futures Co., Ltd., revoking its futures business licence and fining it CNY 6.10 million, after finding serious failures in internal controls, subsidiary oversight and regulatory reporting that contributed to a major risk event at its subsidiary. The CSRC found that Hehe Futures did not effectively implement key internal management systems, including those for subsidiary management, and did not fulfil its management responsibilities over Hehe Asset Management (Shanghai) Co., Ltd. It also identified breaches of reporting obligations and submission of false or incomplete information, including omitting the ultimate controllers and nominee shareholding arrangements of certain shareholders from multiple filings such as its 2020–2022 periodic reports, failing to fully report bank accounts newly opened by the subsidiary, and not reporting related parties opening accounts with the firm and conducting futures trading. Based on the Futures and Derivatives Law, the Regulations on the Administration of Futures Trading and the Measures for the Supervision and Administration of Futures Companies, the CSRC also ordered rectification and issued a warning. Following the licence revocation, Hehe Futures may no longer accept new client account-opening applications and must wind down its existing futures business, after which it must complete business registration changes including removing “futures” or similar wording from its name and cease operating in the market as a futures company. The CSRC stated that brokerage client funds are safe and intact in segregated margin accounts monitored by the China Futures Market Monitoring Center, and noted that it dispatched an on-site risk monitoring team in September 2023 and placed the firm under takeover in November 2024; it also reported that, as of end-December 2024, China had 151 futures firms across 29 jurisdictions with total industry revenue of CNY 41.293 billion and net profit of CNY 9.471 billion.
China Securities Regulatory Commission 2025-02-08
China Securities Regulatory Commission revokes Hehe Futures’ futures business licence and fines it CNY 6.10 million
The China Securities Regulatory Commission (CSRC) revoked Hehe Futures Co., Ltd.'s futures business licence and fined it CNY 6.10 million due to serious internal control failures and regulatory breaches. The firm was found to have submitted false information and failed in subsidiary oversight, leading to a major risk event. Hehe Futures must cease its futures operations, with client funds confirmed safe in segregated accounts.