Research On The Financing Issues Of The Security Companies In China

The security companies in china have a certain scale with the development of the stock market during more than 10 years. But the financing demand of security companies is hard to be solved properly by the regulatory organ all along. The divided running situation between bank and securities business has been established and strengthened with the "law of commercial bank" and the "securities act" were come on and implemented one after another. On the one hand, security companies have been endowed with limited financing channels which are legal and valid while the regulatory organ has neatened the financing order and emphasized on the running divided for resent years; on the other hand, the capital financing mechanism of Chinese security companies which resulted from the divided working situation has not been formed. Chinese security companies are short of effective financing mechanism or pattern. With the development of the stock market and facing the unprecedented competition and challenge from foreign security companies, the financing issues of Chinese security companies have been a bottom-neck which restricts their development. Studying on these issues has a realistic significance on the regulation and development of the security companies as well as the stabilization and development of the whole money market.This paper starts with the developmental status of the security companies, adopts the theoretical study, practice observation and empirical research and emphasizes on the direction of optimizing its' financing structure as well as puts forward my own opinion on the widening and innovation of it's financing channels. At last, this paper probes into carrying out margin transaction system in china. The research divided into five chapters, the main contents and structure of this article are as follows:Proceeding from capital structure and fund demand of Chinese security companies, the first part expounds the necessity of financing demand. After contrasts the capital and business income structure of Chinese security companies to American's, this paper summarizes that the main financing issue of the Chinese security companies is its' unreasonable financing structure. This paper also concludes that the underlying causes of the unreasonable financing structure exist in divided running, defect of business structure, limited endogenous financing, defective structure of property rights and distemperedness of risk management system.In the second part, interrelated financing theoretic backgrounds about security companies are expounded. Some revelations are concluded as follows: The financing cost is the crucial factor in financing decision; state plays the most important role in the institutional development and innovation; the aim of transitional path of the financing system should connect the capital market with money market.The third part makes research on the financing structure optimization under the restriction of the financing cost and analyses the financing cost of the present financing channels. Some conclusions are drawn as follows: The best debt-to-ownership ratio of security companies is decided by the interaction of the level of assets management, interest rate after income tax of the debt and compensatory rate of business risk; financing scale should be fit for the optimal capital structure; various ways of financing should submit to realizing lowest weight average cost of capital.The forth part makes concrete research on the innovative design for financing channels of Chinese security companies which is based on the risk characters of their different business units. All business units according as their risk-earning rate are separated into four different combinations. Some feasible designs for consummating existed financing channels and innovation of financing channels are brought forward based on the four different combinations.In the fifth part, this paper probes into setting up a financing system which fits our state situation. First, this paper expounds the practice in margin transaction system in Amer...