Research On Compliance Risks Management Of JY Securities Company’s Brokerage Business

Compliance management is a vital prerequisite for securities company’s survival and sustainable development, and it is where is real valued rooted. China’s securities industry experienced the industrial crisis in the earlier period, and then regulators start a comprehensive treatment for the industry from August2004, which achieve great outcome. Under this background, from2008securities industry began to implement compliance management system. On one hand, compliance can help to avoid risk to prevent losses or retrieve losses, which is the value of compliance management. On the other hand, compliance management is linked to Securities Company’s classification, which is directly linked to Securities Company’s business qualification. So in turn, compliance management will have direct influence on Securities Company’s business qualification and development opportunities. Brokerage business as the important and basic business of JY Securities Company that contributes a big part of company’s revenues has significant influence on JY Securities Company’s overall development. Therefore, it is obvious that brokerage business’compliance risks management are very important to Securities Company. Apparently, illegally buying or selling securities for client, illegally using client’s securities deposits, or large losses in proprietary trading will results in operation crisis in Securities Company. But if we look at these at large, the deep-seated reason is the absence of external risk supervision and weak internal risk control. The implement of compliance management need to consolidate laws, rules and regulations related to every business. In order to make the compliance endogenous and initiative, it is important to make property compliance conduct standards for each link of all business, which requires a system that formed by relevant laws, rules and regulation that can penetrate to each business and in turn can solve the compliance risks from root.This study uses normative research methodology and comparative analysis to discuss domestic securities company’s compliance risks management’s past and current conditions, by presenting research background of brokerage business’compliance risks management, based on theories, laws, rules and regulations from both domestic and overseas markets, such as COSO’s "Internal Control-framework", IOSCO’s "Risk Management and Control Guidance for Securities Firms and Their Supervisors","Securities Company Compliance Management Pilot Requirements". This study focuses on factors that can influence compliance risks management in JY Securities Company’s brokerage business, uses overseas securities company’s advance experience and research outcome on compliance risks management, and takes example of Canadian Securities Company’s compliance risks management to analyze background and related theories of compliance management and risk control in securities industry. In addition, this paper makes some proposals and suggestions to solve the problems in compliance risks management based on risk management theory and real situation.