Violations Of Securities Company And Its Governance Based On Statistical Analysis Of CSRC Punishment

Stock market plays an important role in national economic development. It is also an important component of the socialist market economic system. Securities Company functioning as a securities intermediary institutions, is one of the most important participants in the securities market. It is also an important integral part of the securities market. Also, it plays an increasingly prominent role in the development and expansion of the stock market. Since the first securities company (Shenzhen Special Economic Zone Securities Company) established in our country on September 27,1987, many securities firms across the country have been established. Our country securities market has expanded rapidly since then. However, with the development of securities markets around the country, a large number of scandals of illegal securities company burst. For example, Dapeng Securities was punished because of its irregularities in the purchase of the stock of Ningbo Bird Co., Ltd. which was underwritten by it. Before and after the year 2004, including Southern Securities, Han and Tang Securities, Yunnan Securities and other 19 securities was ordered to close by the Commission due to misappropriation of client funds, illegal import and other reasons. In recent years, Nanjing Securities, Pingan Securities and Minsheng Securities were broken because of not subject to due diligence and the Commission in the brokerage downgrade penalties and classification ratings in the IPO sponsor activities. Emergence of these illegal acts not only damages the interests of many investors, but also seriously hindered the healthy development of the securities market norms. Thus, it is imperative to further strengthen the supervision of securities firms as well as for violations of governance.Then, what features do violations of securities companies showing? How to take targeted measures against violations of securities companies be regulated? In this paper, we do statistical analysis about penalties for violations of the securities company which China Securities Regulatory Commission issued between 2001-2013, summing up the characteristics of securities companies related violations, and finally giving targeted supervision and regulation recommendations for violations of securities companies.The study found that, the penalty announcements for securities firms count most in the penalty notice on securities intermediary administrative announced by CSRC. The securities company plays an important role in the stock market, so we analyzed the feature of violations of securities companies from various angles. (1) Noticing from the time span of the violations of securities companies, majority violations of securities companies last more than one year. At same time, we found that CSRC punishment for most securities companies have serious lag. (2) Viewing from the type of securities firms from violations of view, we found that " misappropriation of settlement funds", "over range of securities and other business operations " and " margin to customers "living in the top three. In recent years, more violations of securities companies happened in the underwriting and sponsorship business. (3)Violations of securities companies in different periods showed different characteristics. In 2001-2003 the acts of investigating irregularities in the margin to the customer as well as illegal import show higher frequency. While in the three-year period of 2004-2006, the comprehensive management of large number irregularities of misappropriation of the customer transactions settlement funds and operations beyond the scope have been investigated. In recent years, more violations of securities companies happened in the IPO process. (4)In the analysis of executives of the securities company and other persons responsible for violations related to, we found that these violations have features of commonalities based, exception supplemented, clustering and concealment. (5) From the analysis of the effect of non-compliance penalties, we see sanctions securities regulatory authorities on securities firms played a deterrent effect, but did not prevent the occurrence of violations related.The repeated violations of securities companies not only harm the interests of many investors, but also led to more serious negative impact in the community. At the same time, it seriously hindered the healthy development of the securities market and impact the rationally and effectively configuration of capital market resources. Therefore, it is necessary to strengthen our regulatory and governance for violations of the securities company.In view of this, we propose recommendations to strengthen governance for violations of securities companies. In terms of prevention in advance, we recommend to improve the legal system of China’s securities market, improve the corporate governance structure of the securities, strengthen internal control and risk management, regulate securities companies operation and improve the quality of personnel. In the matter of monitoring, we propose to conduct real-time monitoring of the operation of securities companies and to improve the timeliness of inspection. We also need strengthen the supervision of the securities company executives and employees, and improve government regulation means to establish a comprehensive regulatory system. In terms of discipline afterwards, we recommend to aggravate penalties for violations of securities companies and improve the timeliness of punishment to securities company executives. Meanwhile, our country need perfect imputation system to strengthen the protection of investors’ interests. In addition, we should track the results of punishment in order to make sure our treatments play a good effect.