Study On Risk Management Of Private Fund Custody Business Of G Securities Company

With the revising and issuing of “The Law of the People's Republic of China on Securities Investment Fund” in 2013,non-bank financial institutions obtained the professional qualification for the business of fund custody.On March 15 th,2013,the China Securities Regulatory Commission issued “Interim Provisions on the Securities Investment Fund Custody Business Conducted by Non-Bank Financial Institutions”,breaking the monopoly of commercial banks.As a large number of securities companies enter the custody business market,they not only bring competitions with commercial banks,but also deal risk management challenges.G Securities Company is a medium sized company which started the private fund custody business in 2015.In this paper,G Securities Company is a typical subject for identification and evaluation of its risks in the business of private fund custody,by using knowledge in MBA class and relevant theoretical models,which has theoretical value and practical significance in risk management of private fund custody industry.This paper is divided into five parts.Part one: explaining theoretical basis of risk management of private fund custody business after searching domestic and foreign literature.Part two: business situation analysis of this company and the whole industry,emphasizing the necessity of risk management.Part three: risk identification of G Securities Company via Delphi Method.Part four: risk evaluation by Risk Matrix.Part five: listing risk prevention measures for G Securities Company.This paper argues that common risks of private fund custody business include staff shared risk,account abuse risk,assets custody risk and other 12 risks.Just as mentioned above,G Securities Company faces risks in investment supervision,assets custody,funds settlement,valuation accounting,fund managers' credit and contract management.Risk evaluation proves that investment supervision is the riskiest,while assets custody,funds settlement,valuation accounting are less,and fund managers' credit and contract management are the least.As a result,risk probability of G Securities Company can be reduced and has a minimal impact through improvement of outer and inner systems,refinement of business process,adjustment of personnel allocation and reinforcement of internal control.Research Significance: according to the evaluation results and company's current condition,this article evaluates risk exposure of G Securities Company's business,and that establishes measures of risk prevention as future reference.