Securities Depository And Clearing System

As the backstage supporter of the running of securities market, the efficient andsafe operation of the securities settlement system has a direct impact on thedevelopment of the securities market, and is likely to affect the healthy functioning ofthe entire financial system. Making full use of the advantage of later-comer, China’ssecurities settlement has gained rapid development with its hardware facilitiesbecoming world leader, but the corresponding securities settlement systemconstruction is relatively slow. This paper selects only three of the most importantissues for analysis, aiming to provide help for the improvement of China’s securitiessettlement system. The five parts of this paper is as following:The first part introduces the securities registration and settlement system toprovide background knowledge for this essay based on the introduction of thesecurities registration, custody, and depository and securities settlement legalrelationship and so on.The second part focuses on the securities holding modes, analyzing thecharacteristics of both the securities direct holding and indirect holding modes, aswell as the system establishment of securities holing modes of different countries tofind suggestions for China to build the settlement mode of “direct holding modesupplemented by indirect holding mode”. In addition, the different securitieslegislations of poverty right protection of securities investors in the United States,Germany and Britain have been studied to provide reference for improving China’s protection of the rights of securities investors.The third part discusses the central counterparty system, exploring the importantrole of the central counterparty in improving the efficiency of securities settlementand protecting the security of transactions. By learning the experience of the UnitedStates, European Union, and Hong Kong in building central counterparty systems, itoffers help for China to build an efficient and safe central settlement institution.The fourth part emphasizes the securities settlement and its risk, analyzing therisks faced by China’s securities market and the causes and introducing advanced riskcontrol system of the securities market, in order to find useful lessons for theimprovement of China’s securities settlement risk control system.The fifth part studies how to improve China’s securities settlement system,including improving the securities settlement participants system, the centralcounterparty system, the DVP system and other risk control systems. Theimprovement of market access system and ongoing monitoring of securitiessettlement participants can help to improve the settlement participants system. Thecentral counterparty system should be improved by strengthening legislation andperfecting the internal control system and external supervising of China SecuritiesDepository and Clearing Company Limited. Through comparing advantages anddisadvantages of the three modes of DVP and combining China’s securities marketdevelopment status, DVP3is proved to be the most suitable one for China’s securitiesmarket development status.