The Study On Risk Disposal Mechanisms Of Chinese Securities Companies

Securities companies as the main market fundamental to the healthy development of the securities market are playing an extremely important role. Along with the development of the securities market, the scale of securities companies in China has been expanded in the nearly 20 years of development. In the time of Chinese securities market transition, the securities regulation system and the corporation internal control mechanisms are both flawed. Many securities companies have accumulated considerable risks. Since 2002, more than 30 high-risk securities companies have been disposed by China Securities Regulatory Commission. As the legal system failures, we have encountered a lot of problems faced by a lot of doubt in practice. Therefore, how to properly handle the risks facing the security companies has become an important topic. This article attempts to explore the establishment of a long-term mechanism to dispose of the securities companies' risks, based on analyzing the risks of China's securities companies in their development and the pros in practice, learning from international experience. This dissertation comprises four chapters.Chapter One Disposal backgrounds of Chinese securities companies. This chapter demonstrates from hereinafter aspects: 1. to introduce the change and the disposal situation of Chinese securities companies. 2. to analyze the deep-rooted reasons for the accumulation of the securities companies' risks: unsound corporate governance structure, short of capital and financing constraints, small scale, Weak profitability, and imperfect regulatory system.Chapter Two Empirical analysis of the disposal of Chinese securities companies. On the basis of analysis of the disposal of Chinese securities companies, this chapter sums up the approaches taken and factors considered in practice. Furthermore, this part points out the pros in practice: single source of aid funds, imperfect laws and regulations and lack of effective mechanism.Chapter Three Experiences from the risk disposal of foreign financial institutions. By analyzing the disposal practice in USA and Japan, this chapter points out the experiences that can be learned from in the design of the risk disposal mechanism of Chinese securities companies: perfect legal system, warning indicator system, mechanisms for the protection of small investors and accurate positioning of the securities regulatory departments in the dispose practice.Chapter Four Solutions to improve risk disposal mechanisms. On the basis of the previous three parts, this chapter tries to build a long-term mechanism to dispose of the securities companies' risk: First is to establish a comprehensive mechanism of risk identification and risk control. Second is to establish a risk management mechanism from the early corrective measures to save the administration and disposal of the Corporation until the bankruptcy. Third is to establish a sound mechanism to support the dispose of securities companies.