Shen Jieni, enrolled into the program of Finance in 2008, graduated with a bachelor's degree and a master's degree in Finance, employed in the Investment Bank Department of Guosen Securities
Brokerage is a satisfactory career starting point
Under the supervision of the China Securities Regulatory Commission, the brokerage will still benefit from the sponsorship system in the short run. Companies are not allowed to directly raise funds on their own; the sponsorship and underwriting business licenses are not widely accessible to banks and other financial institutions. This business is still reserved to the investment banking department of securities firms. In this sense, the industry of brokerage still has potential for development.
Students may have a good start in brokerage firms where they can exercise their professional skills and understand all aspects of business. There are many securities companies with their own characteristics, some relatively strong in mergers and acquisitions, some in listing on the main board or small and medium-sized boards, and some in bonds, but it is recommended to work at a large brokerage. The risk control, as well as some ways of working, will help newcomers to develop a good work habit.
About the Investment Banking Department
The investment bank links the fund demander and the fund supplier for equity or debt financing.
In China, investment banks have been under the strict supervision of the China Securities Regulatory Commission from the previous channel system to the current sponsorship system. Brokerage companies must go through strict supervision to help companies go public or issue some stocks and bonds. Investment banks need to verify the financial authenticity of the enterprise, including whether the business has sustained profitability, whether production and operation are legal and compliant, and whether the equity structure is clear.
The China Securities Regulatory Commission must act as a general investigator, requiring all information presented by listed companies to be true, accurate and complete, and there being no difference in information disclosure. In this way, potentially dangerous companies or false information may be filtered so that investors can stay assured about their purchases.
There is not much pressure on domestic securities underwriting, and the main task of the brokerage is to verify the authenticity at the early stage.
Working in a domestic investment bank requires independent learning.
You have to learn by doing on the project since no one may tell you how the whole project is going forward. You need to learn from your coworkers. Working in brokerage requires continuous learning, self-breakthrough, constant exposure to new knowledge, and vigilance.
How do investment banks do business?
Projects are generally undertaken by company leaders, or come from new financing needs of old clients. Afterwards, a project team will be formed, generally with two sponsor representatives (one as the main project leader), one site leader, plus two to three project team members.
The development of the project is generally based on the needs of the client. The project team will first make a project proposal to introduce to the client the varieties recommended by the team, the corresponding issuance conditions, whether the company meets these conditions, and then do a market analysis, such as the price, the review cycle and necessary preparations. Afterwards, the team may on-site recommendations to the client.
After hearing the recommendation, some private enterprises might make a final decision to sign a contract of intent, while some state-owned enterprises would be more formal and start the bidding among several brokerages. Then you can get started. You start due diligence to sort out the problems that exist in the project, by referring to the provisions of laws and regulations, as well as some previous feedback, sort out whether there are problems in the company, and whether it is involved in any big transaction, whether there is any illegal external guarantee, whether there is unauthentic information concerning the financial and income accounting; you check materials of the company to ensure that the company has corresponding business qualifications; you then visit some major customers and suppliers of the company; you try to find out the industry policy and sort out the basic situation of the company through online inquiry. You have to strictly go through all of these processes because the brokerage may undertake certain legal responsibility for any illegal disclosure in the sponsorship.
After that, you start to prepare some declaration documents, do financial verification, and do some income authenticity verification, accounts receivable collection test, cost and labor analysis, etc.
Finally, you wait for the declaration document. For an IPO, it is a prospectus, and it is a prospectus on funding for a bond. The document must be given to the internal core department of the investment bank for risk control, and then be reported to the China Securities Regulatory Commission after it passes internal examination.
The China Securities Regulatory Commission will then assign a pre-auditor to the project, who is an internal staff member of the China Securities Regulatory Commission. If problems are found, the pre-auditor will give preliminary feedback which shall be responded to within one month. An extension of response can be requested in some special cases. After that, it will be submitted to the preliminary review, and after the preliminary review is passed, a review meeting will be arranged. Passing the issuance review meeting is equivalent to passing the project. If there are no major issues arising, you just wait for the approval. The investment bank is the company's business department, and the capital market department is responsible for the issuance and completes the subsequent issuance underwriting and investor soliciting.
Get in touch with different industries and update yourself quickly
What I feel excited and passionate about at work is that I have been in contact with different industries and companies, including some traditional industries like photovoltaics, pesticides, and chemicals, as well as emerging industries. Every time I contact a company, I have a chance to acquire an overall understanding of the company's business, finance, internal control, and I may communicate with some relatively high-level people. I have been learning new laws and accounting knowledge. This exposes me constantly to something new. Moreover, I feel more fulfilled after the project has passed the review.
Of course, there is a boring and tiring side about the work. You have to travel a lot and sometimes may even stay with the client for a year or a half. You have to work overtime frequently and that leaves you very little time with your family.
EQ important and professional ability indispensable
Investment banks, accounting firms, law firms, asset appraisal agencies, etc. are called intermediary agencies. The investment bank is the boss of intermediary agencies and a center, playing a role of coordinating clients, accounting firms and other intermediaries
High EQ matters in the work for it facilitates effective and smooth communication. I addition to that, professional and technical ability is also important. In China, investment banks have to do both accounting work and lawyer work. CPA knowledge is very helpful.
For the accumulation of investment banking knowledge, you can pay attention to the website of Chunhui Investment Bank Online, which basically records various investment banking rules, large and small. We have to be well prepared to provide professional advice to clients to help them spot and solve potential problems.
The ability to balance your life is equally important. We work hard partly to ensure a better life, so we have to learn to balance well between busy work and life.
How to join an investment bank?
Shen Jieni had a master’s degree of Finance. She had internships in the financial department of a private equity fund and in the financial institution of Citibank, doing bank and interbank business.
She also did an internship in the Strategic Development Department of Fosun Group. Fosun is a private company engaged in investment, overseas M&A, real estate business, and tourism. On the intern, she made a monthly strategic report which helps to expand her horizon.
To work in an investment bank, you need to be creative but more communicative. Investment bank recruitment requires an internship of three to six months, and those who perform well during the internship may have a chance of interview. Shen passed the follow-up interview in Guosen Securities after three months of internship.
Shen suggests that students seek internships in various industries for experience and that students be honest, diligent and communicative. In terms of professional qualities, Shen believes that a CPA certificate may be an advantage.
For those who are working on auditing posts and have the intention to switch to the securities industry, Shen suggests that they take the CPA test first and that they accumulate more experience in some auditing projects and cultivate more solid professional foundation. In addition, you have to have a clear idea of why you want to switch to the securities industry and have a feasible career plan.
