An ordinary-looking regulatory document has brought to light historical governance issues at Everbright Securities' overseas subsidiaries. This once top-tier brokerage, ordered to rectify its overseas subsidiary governance problems four years ago, continues to reveal deep-seated flaws in system implementation.
Beneath the surface of "procedural flaws" lies a breakdown in the compliance chain. Recently, the Shanghai Securities Regulatory Bureau publicly disclosed a regulatory letter to Everbright Securities, explicitly pointing out two violations: First, proposals from overseas subsidiaries were not subjected to collective discussion procedures, and the compliance officer did not provide written review opinions. Second, the company failed to effectively prevent conflicts of interest between securities research reports and other business activities.
The absence of formal meeting procedures for cross-border business decisions and lack of documented compliance reviews represent core compliance failures in the financial industry, directly reflecting the company's "suspended" control over overseas operations. The independence of research reports is fundamental to a brokerage's credibility; a failure in firewalls indicates systemic risks to the objectivity of investment research. These issues are not new but are "aftereffects" of Everbright Securities' 2022 rectification of its overseas subsidiaries.
Four years on, the rectification remains incomplete, with substantive issues still unresolved. Looking back to June 2022, the China Securities Regulatory Commission (CSRC) took corrective action against Everbright Securities, exposing multiple problems at its overseas subsidiaries. One was engaging in non-financial business in violation of regulations: the overseas subsidiary China Sunshine Fuzun Immigration Services Co., Ltd. conducted immigration services, which fall outside the financial business scope, and existing businesses were not cleared. Another was incomplete equity cleanup: the company failed to oversee the completion of equity (partnership share) cleanups for OPEBS Fintech Investment, Northeast Special Steel Group, and Qiqihar Guohong Investment Center. Additionally, structural simplification targets were not met: the company did not complete the deregistration of one subsidiary and one SPV on schedule, nor did it adjust the hierarchy of 11 subsidiaries and 3 SPVs, leaving overseas structural redundancy unresolved.
However, to date, no public announcements have been found regarding the "completion of rectification" for these issues.
More concerning is the ongoing ripple effect from the MPS acquisition case. The British company MPS, acquired for 5.203 billion yuan in 2016, went bankrupt and liquidated in 2018, triggering a series of lawsuits that continue to this day. In April 2026, a ruling by the UK High Court marked the end of overseas recovery efforts for the MPS case: a $661 million (approximately 4.2 billion yuan) fraud lawsuit filed by Everbright Capital's Cayman Islands-based Jinxin against MPS's original sellers was entirely dismissed, completely closing the last door for recovering losses overseas. Meanwhile, domestic litigation persists: in October 2025, the Shanghai High Court's final judgment ordered Everbright Capital to compensate Yingtan Langtaosha with 78.75 million yuan. In January 2026, Everbright Capital was ordered to pay Shanghai Longqian 45.16 million yuan and has appealed the decision. A decade later, the financial and reputational damage from this massive acquisition continues to impact Everbright Securities.
From individual cases to the industry: cross-border governance as a "mandatory course." Everbright Securities' overseas governance issues may not be isolated. In September 2025, a warning letter from the Zhejiang Securities Regulatory Bureau to Caitong Securities also pointed out problems such as "failure to establish a tracking system for decision-making matters of overseas subsidiaries" and "inadequate risk control mechanisms." Recently, the China Securities Association has been promoting industry research on conflict of interest management, covering multiple dimensions including cross-border control mechanisms. The four-year span between the two warning letters exposes a common industry problem: governance of overseas subsidiaries cannot remain on paper but requires genuine implementation and supervision.
In conclusion, looking back at Everbright Securities' history of penalties in 2026, questions remain: Has China Sunshine Fuzun's immigration business been cleared? Has the equity cleanup for OPEBS been completed? Have the structural simplifications for 11 subsidiaries and 3 SPVs been accomplished? These issues, highlighted four years ago, still hang over Everbright Securities. When the phrase "procedural omissions" appears in regulatory documents, it reflects all historically unresolved and unimplemented institutional gaps. On the journey of brokerages expanding overseas, compliance is never a periodic paperwork task but essential infrastructure that must be firmly established. The story of the MPS case is not yet closed, and Everbright Securities' overseas governance rectification is far from over.