When the market's "gatekeepers" turn into "matchmakers," and when a commission rebate chain runs from frontline sales staff up to compliance management, the veteran brokerage Great Wall Guo Rui Securities has seen a stark compliance collapse play out right on its home turf. Behind the five penalty notices, the heads of two business outlets are conspicuously absent from the disciplinary list — is this a verified case of no liability, or an investigation that remains incomplete?

Following its earlier citation of Kaiyuan Securities for investment banking violations, the Xiamen Securities Regulatory Bureau has struck again, issuing five sequentially numbered penalty notices targeting the city's only homegrown brokerage, Great Wall Guo Rui Securities. First, look at the institutional warning letter directed at the firm's Xiamen Xiahe Road Securities Business Department (referred to as the Xiahe Road outlet). An investigation found two prominent categories of misconduct at this branch: individual securities brokers improperly transferred benefits to clients and other interested parties by refunding a portion of their commission income, and certain employees introduced clients to brokers while accepting a cut of the commissions those brokers earned. Regulators determined these issues directly reflect inadequate compliance controls at the outlet, imposing a warning letter as an administrative supervisory measure and recording the violations in the integrity archive under the Administrative Measures for Integrity Supervision in the Securities and Futures Market (CSRC Order No. 166).

Notably, this institutional penalty vaguely refers to "certain brokers" and "certain employees" without naming the individuals involved. More specifics must be sought from the personal penalty announcements issued the same day. Meanwhile, the institutional-level determination of "inadequate compliance controls" leaves an open question: how should the responsibility of the branch's management be defined when supervisory duties have clearly failed?

The four personal penalty notices published on the same day fully reveal the identities of those vaguely referenced "certain brokers" and "certain employees," laying bare a complete commission-sharing and rebate network spanning brokers at two outlets, a branch compliance officer, and a former asset management staffer from headquarters. The first category involves broker rebates. Zhang Mouzhi, whose practice began at the Xiahe Road outlet in September 2009 and who transitioned to a securities broker role in November 2016, implemented commission rebates during his tenure, transferring improper benefits to clients and interested parties, resulting in a regulatory interview measure. Huang Mouge, who joined the Lianqian East Road outlet in June 2009 and switched to a broker role in November 2016, similarly engaged in rebate activities that transferred improper benefits, and has been issued a warning letter with the violation recorded in the integrity archive.

The second category involves introducing clients in exchange for commission splits. Wu Moushuai, who joined Great Wall Guo Rui Securities in July 2011 and served as a compliance manager at the Xiahe Road outlet — a role that should have placed him on the front line of risk oversight — instead introduced clients to brokers and accepted commission shares, earning a warning letter and an integrity archive entry. Xiao Mou, who falls outside the branch structure, has a more distinctive history: he began at Guosen Securities, joined the predecessor entity Xiamen Securities in 2011, held positions as an investment advisor and lead investment manager in the asset management department, and was later reclassified to general securities business. As a headquarters-level staffer, he violated internal rules by channeling clients to branch brokers and receiving commission splits, also receiving a warning letter and integrity archive record.

It is worth noting that both involved outlets were established in 2010 and rank among Xiamen's core local branches. The Xiahe Road outlet changed its head to Chen in 2017, while the Lianqian East Road outlet replaced its head with Fang Mouming in 2018. In the five publicly disclosed penalties, all directly involved brokers, compliance staff, and former headquarters employees have been named and sanctioned, yet neither branch head appears on the individual punishment list. As branches successively reveal hidden private commission-sharing and rebate schemes — with compliance personnel even directly entangled in the profit chain — whether these branch leaders are entirely blameless remains a question the external penalties do not fully answer.

As an AMC-backed, full-license brokerage, Great Wall Guo Rui Securities operates 15 securities branches, with 7 located in its headquarters city of Xiamen, making it the region with the highest branch density. Staffing data shows that as of the end of 2025, the parent company employed 408 people, of whom 62 worked in compliance and risk management roles, representing 15.20% of the total — hardly a thin allocation of compliance personnel. The 2025 annual report's internal control self-assessment states the company has established a complete internal control system, found no material or significant deficiencies in financial or non-financial internal controls, deems overall internal controls effective, and notes only general deficiencies in certain business areas that are already being remediated.

On paper, the internal control framework appears robust. Yet the headquarters city — which should exemplify compliance management — saw core branches erupt in collective misconduct, with compliance staff degenerating into active rule-breakers, exposing blind spots in grassroots supervision. In 2025, Great Wall Guo Rui Securities generated net commission and fee income of RMB 112 million from its brokerage business, a sharp year-on-year increase of 27.94%. Meanwhile, subsidiaries including Great Wall Futures, Great Wall Capital, and Great Wall Guo Rui Investment all posted net losses, further elevating the brokerage segment's weight in overall performance. Under this earnings pressure, the risks surrounding broker management and employee conduct controls at branches have been magnified. There remains room for improvement in penetrating supervision over local outlets. Within the brokerage commission incentive framework, regulators and firms alike cannot focus solely on business staff — compliance and risk personnel themselves require secondary oversight.

Disclaimer: This article is compiled based on publicly available information for industry observation and reference only, and does not constitute any investment advice. Regulatory policies, business qualifications, and other information mentioned herein are subject to the latest official releases.