| The entry into WTO would offer the opportunity for the development of china. Yet, it also would bring big challenge to some industries, including banking and security industry. As the market is gradually open to the world, banking and security industry will be faced with fiercer competition directly from international investment bank in 5 years. The risk management has great significance to china Security Company. When china Security Company expand themselves, they should focus on enhancing the idea of risk management, improving asset quality, and also should import advanced risk management technique, develop their own technique. From this point, we can say it's realistic for the study on the business risk management of china Security Company.The risk is objective and Security Company lies in a high-risk field. Security Company should pay more attention to the business risk, including policy risk, interest rate risk, legal risk, politics risk and market risk. The business risk usually appears in the main business of Security Company, such as self-settlement, underwriting, brokerage and entrustment.Many risk measuring techniques appears ,such as variance method, P analysis method, duration method. These techniques only can be applied into given financial tools or specific field. J.P.Morgan put forward the VaR model instead of the techniques above mentioned. The VaR model is easy to understand, and could measure comprehensive risk of finance institution or portfolio. The VaR model could be formulated hi 3 ways: historical stimulation method, variance-covariance approach and Monte- Carlo simulation. The VaR model used in this paper is based on the Riskmetrics system developed by J.P.Morgan. As application of the VaR model has strict premise, the model couldn't be applied into china stock market commonly.In the self-settlement business, there exists policy-legal risk, market risk and portfolio risk. Now, the composite index released by stock exchange could reflect the systematic risk. If the rise and fall of composite index can be predicated, the systematic risk in the self-settlement business could be measured. Similarly, the rise and fall of portfolio's market value reflect the risk of portfolio. If the change of market value could be predicted, the risk of portfolio could be measured. In the paper, the daily return rate of composite index of a specific time is tested by W test method. The result shows thedistribution of daily return rate of composite index is accordance with normal distribution. According to the nature of normal distribution, under 95% confidence interval, the value of VaR could be calculated, and then we can predict the next day's index. The calculation of the portfolio risk is same too. If the daily return rate of each stock is accordance with normal distribution, the daily return rate of the portfolio also is conformed to normal distribution. So, we could predict the market value of portfolio in next trade day, and the risk of portfolio could be measured.Initial-issue underwriting risk includes policy risk, issuer risk, bought-deal risk. Right-issue underwriting risk includes policy risk, bought-deal risk and market risk. The author measures the Additional underwriting business risks with VaR model. The test and analysis method is same with the above.Brokerage risk includes risk of violating rule, insider risk and operation risk. In this part, author only makes qualitative analysis for in short of data. The risk of entrustment business is similar with self-settlement business.When Security Company is enhancing the internal control of business risk management; the appropriate surrounding is needed to support the risk management. The Security Law has provided the legal surroundings for the risk management, and the reform of regulation pattern will provide well-organized regulation surroundings. To further improve the outside surroundings, the following measures could be taken:1. Speeding up to formulate regulation rule, and perfect the legal system2. Enlarging the mark...
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