Study On Risk Management Of Equity Pledge Financing Business In Securities Companies

Since securities company equity pledge financing business floodgates on June 24,2013,securities companies with a more obvious advantage in equity pledge financing business position as the industry leader.This paper interpretation of the relevant regulatory provisions and securities company's business norms,the securities company equity pledge financing business regulations and operating standards cannot comprehensively and effectively prevent and control the risk of such business.In the period from June 2015 to August,the stock market fell sharply unilateral market background,equity pledge financing business due to frequent lack of collateral value of forced liquidation risk events,the securities company reflects this business risk management ability of potential problems triggering a chain of risk warning.In addition,with the implementation of circuit breakers in the stock market in 2016,equity pledge financing business once again faced with insufficient collateral value test,related to the underlying stock fell sharply and unable to cash transactions,it further raised the equity pledge financing business risk management alarm.This paper analyzed six aspects risk of the securities company equity pledge financing business,the risk from market risk,liquidity risk,compliance risk,credit risk,legal policy and practice in the industry risk,further combing the main risk factors of securities companies to carry out equity pledge financing business.On this basis,introduction of the concept of process management to strengthen equity pledge financing business risk management processes and measures by securities companies,process management mainly involved in pre management,management and ex post management.This paper through case study analyzes the equity pledge financing business of LETV,analyzes its business risks and deeply analyzes the causes and losses caused by the risk events.Using the management processes and measures to strengthen the LETV equity pledge financing business to prevent the occurrence of risk events,further verify the securities companies to strengthen risk management processes and measures of equity pledge financing business is feasible,it provides practical risk management measures for the future business of risk prevention and follow-up management.This paper through the analysis and demonstration show that the securities company must strengthen risk management,strengthen risk management measures,improve the management level,improve the management process,in order to promote the equity pledge financing business healthy and sustainable development.In this paper,the securities companies to strengthen risk management processes and measures of equity pledge financing business is based on the risk prevention and risk management,which has a certain practical significance and reference value,it despite the shortcomings but higher feasibility to be further improved,this paper suggest the securities company to strengthen risk management of equity pledge financing business in the application and promotion of development.By improving the risk management ability of the securities industry as a whole,the effectiveness of equity pledge financing can be effectively exploited and the financing problems of various enterprises can be solved.In 2017,risk events will continue to expose of the securities companies engaged in equity pledge financing business in the future,for the changes in regulatory policy and the market environment change at any moment.This paper suggest to efficient use of processes and measures to strengthen the risk management of the business to avoid liquidation event.