In a recent update, the Beijing Stock Exchange released a self-regulatory announcement for its members and other market participants after a seven-month interval. DFZQ (东方证券) and certain individuals were specifically named in this announcement. What are the details surrounding this situation? The analysis goes as follows.

In this public disclosure, DFZQ and related personnel received a warning letter from the Beijing Stock Exchange in late September due to a lack of diligence and responsibility. No additional related information was provided. However, the penalty appears to have specific implications.

On September 26, the same day DFZQ received its warning, the Beijing Stock Exchange also updated the status of the IPO for Harbin Shida Dapeng Industrial Co., Ltd. (大鹏工业). Notably, DFZQ is the sponsoring institution for Dapeng Industrial’s IPO. Earlier in September, among the five documents updated by the Beijing Stock Exchange related to the IPO—comprising financial reports, audit reports, and underwriting documents—DFZQ remained the sponsor, with the sponsoring representatives Lü Xiaobin and Li Fangzhou unchanged.

Additionally, in June, the Securities Association of China published a categorized list of sponsoring representatives, indicating that Li Fangzhou and Lü Xiaobin had previously been subject to self-regulatory measures from the Beijing Stock Exchange.

Meanwhile, another sponsorship project by DFZQ, Denail Energy Saving Technology (Shanghai) Co., Ltd. (德耐尔), faced multiple issues during the third round of review inquiries at the end of September, resulting in a suspension of its review process. DFZQ was required to verify several matters and provide clear opinions. The sponsoring representatives for Denail, Bian Jin and Liang Jun, were also listed in the self-regulatory category by the Exchange and faced disciplinary action in May.

This indicates that both of DFZQ’s sponsorship projects experienced different review incidents around the time the warning letter was issued. The four sponsoring representatives involved in these projects were subjected to self-regulatory measures by the Beijing Stock Exchange. Unfortunately, the warning was issued solely on the grounds of lack of diligence, making it unclear which specific project prompted the penalty.

This situation reflects the stringent measures the Beijing Stock Exchange has implemented this year to enforce stringent IPO admission standards, as well as the policy of holding sponsors accountable from the moment of application.

Currently, the work at DFZQ is led by Vice President Lu Dayin, who also signed documents related to both projects. The specific context surrounding the issuance of the warning letter remains known only to DFZQ internally, leaving their opinions on the matter undisclosed.