Internal Control For Securities Companies

Securities markets are playing more and more important role in the national economy. As an important composition, securities companies have gained a lot of achievement in recent years, but problems have been emerged as well, focusing on the internal control issue, which leads to the loss of control in the management or even huge business losses in the company. Therefore, internal control for securities companies has become a valuable issue to be researched and resolved in theoretical and practical areas. Chapter One in this paper summarizes the concept of internal control; briefly describes the theoretical research status in China and overseas; analyzes current internal control status and problems in China's securities companies; states the objective, principle and basic requirement for developing internal control for securities companies; and describes general outline of internal control system for securities companies. The major business models of securities companies include investment banking, brokerage, proprietary business, asset management, cash management, etc. Chapter Two analyzes the above-mentioned business models and their major risks; also performs further research on the internal control system for these models and brings forward practically instructive ideas. Internal control is not only for various business models, but also involved with companies'daily operation management. Chapter Three deals with specific practices of internal control in the management of securities companies from the aspects of: corporation governing structure, organization structure, human resource management, authority system, firewall system, risk control and check system, working process, system building and corporation culture. Internal control is required to be a long term task for securities companies. It not only needs to be continuously adjusted in order to be adapted to new environments and requirements, but also is equipped with more advanced, real-time and quantified measures and systems in order to improve the effectiveness of risk monitor, prevention and control.