A Study On The Development Of Direct Investment Business Of The Securities In China

The direct investment business of securities is that the securities make a equity investment for the non-public offering companies (Pre-IPO), which are benifit from selling the shares after the companies IPO or acquisition. It is an extension of the seller business to the broker and it may be a new profit model to the broker, too. In the foreign countries, most of the revenue of the broker is from the direct investment in the equity market. But in our country the direct investment business of the securities just started in a short time. Therefore, it is significant for us to research the development of the business in China.In this paper, based on the history and current situation of the development of direct investment business of the domestic securities firms, I analyzes the motivation theory the securities involved in private equity investment, conclude the development experience of the United States, Britain and Japan. After that I make a case study to explore the organizational model the broker involved in the venture capital and how the regulatory system works. At the end of paper I give some policy recommendations.