A Credit Asset Seuritization Product Designed For Securities Firms' Financing Business

After these years development,the scale of securities margin trading has got explosive growth.At the same time,the securities margin trading has became one of the most important factor in China's securities market.But,there is a serious problem of unbalanced development in margin trading currently,it doesn't have fundamental change to securities company's profit model because of the high proportion of financing business.Because of over-dependent on secondary market,the develop of securities companies was restricted.When secondary market is booming,the increasing demand result in the amount of financing is insufficient;but when secondary market is recession,the sluggish demand lead to excess amount of financing,which causes a capital waste.So securities companies are looking for a flexible and low-cost way to be funded in order to reply the financing need in secondary market.China Securities Regulatory Commission promulgated the measures for administration of the securities lending and borrowing business of securities companies,while allowing securities companies to carry out the margin trading asset securitization business.The new regulations make it possible for securities companies to use a financing method which not only cost efficient but also liquidize remnant assets by the way of asset securitization.This paper attempts to design a financial capital asset securitization product under the background of the latest policy and market environment,in order to not only meet the financing needs with the way of asset securitization,but also provide investors with a variety options of financing.The first chapter of this paper mainly elaborate background of the market and design concept of the product.The part of market background mainly includes: the origin of margin trading,the positive impact to the financial market,the development situation of current securities lending and borrowing business and the existing problems.The part of design concept of the product mainly includes: the operation mode of asset securitization,the characteristics of term structure of financial capital,the basic idea of asset securitization and specific transaction structure.In addition,this chapter also briefly summarized the features and functions of the product.The second chapter mainly elaborate the design scheme of the product.In this paper we choose China Merchants Securities as a sample,to design a practical and competitive asset securitization product by drawing up detailed parameters and terms.At the same time,in this chapter we also calculate the expected return rate of product,and described the risk control in detail.The third chapter mainly elaborate the advantages and the market prospect of the products.The products have two advantages,one is the market blank filled up,the other is improve the financing function of capital market.The outlook of the market mainly analysis from two aspects too,one is demand side,the other is supply side,in order to prominent the advantages of it's high yield and high liquidity,and the big supply of underlying assets.The fourth chapter mainly elaborates the promotion strategy of the products.It include making a product marketing plan and give a rough estimate of the promotion cost.The article possesses the following innovations:In traditional financing channels,there are not a lot ways for securities companies to raise funds and the costs is expensive.But when we design an innovative product through asset securitization to expand founding sources,in this way,it can help us not increase the cost,also,with use of the means of off-balance-sheet financing,we can reduce the financial leverage,optimize the balance sheet.Meanwhile,it enrich the product market which give investors more choices,and achieve “win-win” situation.