Guotai Junan Securities' Margin Trading Business Analysis Under The Matching Funds Restrained Background

Margin trading is a kind of credit transaction mode,it is a basic trading system generally implemented in overseas market.China's securities market starts late,the launch of margin trading business is a major progress in China's securities market,not only the introduction of short selling mechanism is conducive to fully play the stock market's functions,but also creates a new way to make money for the securities companies and the investors.Since 2010,the beginning of the implementation of the pilot margin trading,this mechanism has been running nearly six years,in the process,the margin trading business played a role in many aspects also exposed some business development issues.In 2015,the management take deleveraging measures for the huge risk brought by the leverage business,the matching funds outside the stock market has been restrained and the leverage ratio of margin trading business also has been severely restricted.This paper aims to help more investors understand the margin trading business under the background of matching funds outside the stock market has been restrained.Through the analysis of Guotai Junan securities' margin trading business,we hope to reveal the current margin trading's inadequacies of China's securities companies,and further analyze the reasons,put forward a number of issues which is worth to be concerned by investors and social,and give some suggestions might be worth to learn aiming at these problems,at the same time,it will be a pleasure if the analysis herein can make a modest contribution to promote China's margin trading business' further development.In this paper,literature research and field survey are the mainly used methods.Firstly,the research's background and significance are introduced,and related literature are sorted out;secondly,concept and characteristics of margin trading and matching funds outside the stock market are described,and differences and relations between them are analyzed.In the third part,we give an overview of Guotai Junan Securities and its margin trading business development,and then analyze the reasons of its present problem in business development.The final part of this paper is the conclusions and suggestions.The main conclusions of this paper contains the following:(1)The development of financing business and borrowing business imbalance,which may be related to the investors thinking inertia and limited short selling subjects.(2)The development speed of margin trading is instability,it influenced by the stock market's volatility at a large scale,the risk-averse function failed to give full play.(3)Securities regulatory system needs to be improved,and the profession of service staffs needs to be trained.For the above conclusion,the paper puts forward some suggestions as follows: the first is to strengthen the investors education so that to transform the thinking inertia,and further expand the short selling securities pool so the investors can have more selection;Second,we must accelerate the improvement of refinancing and mechanism,smooth the flow of funds and securities between the money market,the stock market and other investment bodies to break dual restrictions of the insufficient number of financing and securities lending,based on this,regulatory authorities also need to strengthen market supervision to reducing acts of unfair competition;Finally,at the micro level,the securities company need to further improve risk control system in order to reduce the liquidity risk and the Customer Credit Risk,at the aspect of customer service,the company need to develop a professional team and emphasis on staff training,thus it can establish a good corporate image and enhance industry competitiveness.