Research On Straits And Measures Of The Securities Firm

The securities firm is an institution that mainly works with stock market,including issue, underwriting, M&A and asset management. From the firstsecurities firm setting up in Shenzhen special zone to now, it made greatachievements in the structure of interior control and the scale of assetexpansion. But these years, there were a lot of problems about the securitiesfirm, many of them were broken or taken by government, e.g. Dalian Security,the South Security, Anshan Security, Liaoning Security, because both thestock market system and the securities firms'interior structure are not perfect.We should quicken the step on establishing the macro system of stock market,consummate the superintendence mechanism, improve the innovation abilityof securities firms, find out the new financing way, and train the new sourceof profits, which are all effective methods in disposing of the problems.In this article, first, we depicted the history and activity of securitiesfirms, analyzed the deep reasons, and then put forward the solving measures.We have three chapters as follows.In the first chapter, we looked back the history of the domestic securitiesfirms, and then describe the fact that the profit of securities firms decreased.There were many cases about which the securities firm diverts the customers'security trading margin, break the laws in exchanging at the secondary stockmarket. The writer introduced the usual way to repurchase government bondsillegally. The first chapter also analyzes the difference of ROE betweenAmerican investment banks and the domestic securities firms through data. Itis the diversity of Debt to Total Capital that leads to the diversity of ROE,which expounds the relatively limited financing ways of the domesticsecurities firms in a certain degree. It cannot satisfy the capital need ofsecurities firms at all, and the present financing ways are difficult to matchcapitals with debts in liquidity.The second chapter points that the straits faced to securities firms is theresult of internal and external force on action together. Above all, on theaspect of the macro economy, one of the most important external reasons isthat there are some disadvantages in stock market system. The disadvantagesthat have existed already were exposed in the decline of stock market. Thereare two kinds of shares——the circulated shares and the non-circulatedshares in the stock market, which is the characteristics of stock marketstructure. The circulated shareholder and the non-circulated shareholder arenot equated in status, rights and returns. They have different price in deal.The price of non-circulated share is on the base of the equity, but thecirculated share forms its own price in the open market. We should take somemeasures to solve this problem. If we couldn't dispose of this problemrationally, it will do harm to the development of stock market in the longperiod. As the principal part, securities firms will be into crisis. At themeantime, the unilateral market function and the immature procedure ofsupervision also enlarged the market risks of securities firms. Secondly, it isthe essential reason of the securities firms'straits that they have not a perfectinterior administration and they have the same source of revenue. The 50percent of the domestic securities firms'revenue comes from thecommissions, which makes them lack some ability to defense the risks.Meanwhile, the securities firm became the moneymaker for the holdingcompany because of the shares over centralized.The third chapter brings forward many suggestions to settle the crisis ofsecurities firms. The first, we should found a perfect interior administration toreinforce the government within the enterprise, and set up a mechanism tobalance the rights between shareholders. It is just the good mechanism thatinclude not only to make efficient rules, but also to put these efficient rulesinto practice. In order to act on the administrations effectively and avoid thecontrol risks, the regulations that use in the company should occupy all fieldsabout the management. The second, we should strengthen supervision andquicken the process of legalism. We must act everything in accordance withlaws. The person executed the laws should perform his duties strictly. Ifsomeone violates the laws, he must be punished in the light of laws. The third,we can draw on the experience of the advanced foreign investment banks,and use these advanced government experience and pattern for reference,which can help the domestic market overcome its disadvantages and developbetter. The fourth, the domestic securities firms should improve theirinnovation ability to invent the new products that are applied for the marketneeds properly, on the base of learning. Meanwhile, securities firms shoulddo some investigations to find out relative superiority about them, developtheir own characteristics, avoid the competition among the same industry,nurture and educate the talented person, and bring up the new growth point ofprofit. The fifth, they should enhance the scale of their customers, anddecrease the products'costs. Improving the ability of withstanding therunning risks and strength through M&A. The last, we should exploit the new...