Seven years apart, the same branch under Citic Securities Company Limited found itself tripping two separate regulatory red lines — one on anti-money laundering and one on practitioner conduct. Under heavy performance pressure, can compliance rules on paper restrain the human choices made inside a tightly closed circle?

A second dual penalty after seven years

Not long ago, the Jilin Regulatory Bureau of the CSRC issued two consecutive administrative regulatory measure decisions, targeting the Jilin Provincial Branch of Citic Securities Company Limited and its then-head, Liu Mingxu. The matters involved two violations. First, "multiple staff members at the Jilin Branch engaged in improper trading activities," and Liu Mingxu, as the branch head, "bore direct responsibility." Second, Liu Mingxu himself "provided improper financial conveniences to clients in violation of rules." The regulator's wording combined the two issues into a single characterization: "the branch's compliance management was inadequate and failed to strictly regulate staff conduct." The Jilin Branch was ordered to rectify the problems, and Liu Mingxu was issued a warning letter. The branch was required to complete rectification within one month and submit a written report.

This was not the first time the Jilin Branch appeared in regulatory records under an "institution plus individual" dual-penalty structure. Seven years earlier, the same branch had gone through an identical punishment logic along a different regulatory line.

A silent handover across two sites in one province

Citic Securities Company Limited's footprint in Jilin is minimal, with only two physical sites across the entire province: the provincial branch headquarters in the capital, Changchun, and the Jilin Street sales department in Jilin City. The provincial branch was formerly the Changchun People's Street sales department, established in 2013. In 2017 it was converted and upgraded into a provincial-level branch, taking on business management functions for the whole province, but its network map has not expanded since — provincial business has long relied on just two isolated nodes.

In January 2019, Liu Mingxu, who had previously served as general manager of the Anshan Shengli Road and Jilin City Jilin Street sales departments of Citic Securities Company Limited, succeeded Li Zhe as head of the Jilin Branch. At the end of 2018, the Changchun Central Sub-branch of the People's Bank of China had just issued a fine against that site for inadequate customer identity verification under anti-money laundering rules — a 300,000 yuan institutional penalty, with two employees punished as well. At that point, this branch head took over a mess carrying compliance stains. As a veteran with more than a decade in the industry, he put himself at risk in the top job at a provincial-level branch, and along with multiple employees became entangled in improper trading.

The CSRC penalty that landed seven years later no longer concerned a mere procedural oversight; it pointed directly at the branch head's own misconduct in carrying out his duties and at chaotic trading among the staff. After all, ordinary weak internal controls can still be remedied by revising rules and strengthening training. But once a manager actively breaches the red line, routine rectification can hardly root out the hidden dangers.

The compliance cost of a negative-margin region

On the financial map of Citic Securities Company Limited, the "other regions" category that includes Jilin is a glaring area. In 2025, this segment posted revenue of 1.791 billion yuan against costs of 2.066 billion yuan, for a gross margin of -15.37% — the only negative-gross-margin segment within mainland China. In the first half of 2026, this loss-making pattern had still not reversed. A narrow business base and a limited client circle easily breed a relationship-driven business ecosystem. When regular brokerage income struggles to cover operating costs, and under sustained performance-assessment pressure, overstepping is hard to attribute simply to weak compliance awareness.

Slowing performance at the group level further amplifies the tension. In the first three quarters of 2026, Citic Securities Company Limited's net profit attributable to shareholders was 31.022 billion yuan, but third-quarter revenue and net profit both fell significantly year on year. When the head office's growth engine decelerates, assessments pushed down to loss-making regions only become harsher. Inside a small, closed circle, the head office's internal-control penetration easily goes numb in the face of performance pressure.

Conclusion

Two rounds of dual penalties in seven years: regulation shifted from anti-money laundering to professional conduct, and risk moved up from procedural loopholes to the bottom line of management. Regional profitability difficulties, a minimal branch layout, the branch head's performance responsibility, and internal-control effectiveness are all interlinked. As a head who ran a provincial branch for seven consecutive years, he shouldered the burden of turning losses into revenue while guarding a closed business turf. In the balance between compliance and performance, the final bet is not on the red line of the rules, but on the bottom line of the practitioner.