The Trend Of Brokerage Under The Floating Commission Rate System

From the birth of the Chinese stock market, fixed commission rate system had played a vital role in the stock brokerage. As a new floating stock commission rate system came into effect on May 1,2002, the brokers have to face the new environment in which the profit rate will be very low. And after China join the WTO, the big names from abroad will also take part in the competition in domestic stock market. Under this circumstance, where will the domestic stock brokerage go? This dissertation will analyze current situation and show that brokerage via the Internet is the right direction for the Chinese stock brokerage after implementing the floating stock commission rate system.Part I: The reformation of the commission system follows the tide. As we review the history of the stock markets in the world, it is clear that commission rate will finally be determined by the market. This trend is unavoidable. And in the past practice fixed commission rate system, there were a lot of problems. In fact the discount of the commission was quite popular in our stock market. On the other hand, the prerequisite conditions for the reformation have already been met as the stock market grows. And floating commission rate system is an important step to the reformation of the whole stock market. It is significant to form a mature and formal stock market.Part II: Innovation is the way for the domestic brokers to cope with the challenge. First I shall analyze the influence of the adoption of the floating commission rate system to the brokerage. And then I shall point out that innovation is the strategy for the brokers by scrutinizing the trend happened at overseas markets and the current situation of domestic stock market.Part III: I shall analyze the innovational brokerage products. First I shall introduce the processes to design the new brokerage products. The core of the brokerage is service. As a special form of product, the essence of brokerage product has its own characteristics on marketing. So we have to deploy a special marketing strategy to fit its traits. After analyzing the design procedures of the innovational brokerage product, I shall compare and contrast the main products that emerged recently, and then indicate that brokerage via the Internet is the trend.Part IV: Brokerage via the Internet is the trend of stock brokerage. I shall use Michael E. Potter's theory of Internet and strategy management to analyze the environment of the stock brokerage profession. And then I shall analyze the industry structure and the value chain of the stock brokerage profession at e-business age. At last, I shall illustrate the current situation of the domestic brokerage in this area. Through all these analysis, I shall demonstrate that brokerage via the Internet is the future development trend of the domestic stock brokerage.