Research On Risk Control Of Margin Financing And Financing To Buy Non-standard Securities

The development of margin financing and securities lending business has increased the income of securities companies and changed the trading mode of investors' one-way(no-shorting)transactions.At the same time,it makes the “one-way transaction” of China's 20-year securities market a history.Our A-share market has entered an era of "two-way trading" in which trading can be reversed within T+0 days.However,the margin financing and securities trading has advantages and disadvantages.It is a “double-edged sword”.The leveraged trading mechanism has created potential risks for investors and the financial system.After the implementation of the new regulations on the stock pledge business,the shareholding reduction of shareholders of listed companies was restricted,and the proportion of financing through stock pledges was greatly reduced.When the listed company's stock pledge financing can't meet the demand,the shareholders will finally focus on the financing and securities lending business.Some of the company's shareholders will use the margin financing and securities lending business to cash out the pledge ratio of beyond 300% out of the credit account,and even more use cash funds to speculate on securities that are not within the securities of the margin financing and securities lending sphere designated by the stock exchanges,which will undoubtedly increase The risk of a securities company.For high-risk innovative business margin trading,although HY Company has established a risk control system,formulated risk management measures and emergency response mechanism,but in the process of business development,there is still frequent insolvency after closing positions,which shows that the existing risk control system still has shortcomings.This paper takes the risk control system of margin trading of HY Company as the research object,and focuses on the risks brought by customers' using margin trading to cash out or buying non-designated securities.First of all,this paper introduces the basic concepts and regulatory requirements of margin trading,and lists the existing ways of margin trading to cash out and buy non-designated securities in the securities market without violating regulatory requirements.And on this basis,it simulates the maximum threshold value and risk threshold value of cash out and financing to buy non-designated securities through stress test.Secondly,it introduces the basic situation of HY Company in recent years,focusing on the closing position of HY Company under the premise of financial deleveraging,high stock pledge rate and Sino-US trade war in 2018,and introduces the existing risk control system of HY Company's margin trading,especially the prevention of cash out through non-designated trading.Finally,through the analysis of typical cases,the paper points out the deficiencies of the existing risk control system of HY Company,especially the deficiencies of the risk prevention of the margin trading and securities arbitrage,which can be used as a reference for companies in the same industry to reduce the risk of through positions,and puts forward suggestions for improving the deficiencies in the risk control system of HY Company.This paper takes several methods of cashing in the margin financing and securities lending business as the starting point.According to the regulatory requirements of the margin financing and securities lending business and the theoretical proofs of various formulas,the maximum amount of the non-designated-securities financing and the various items after the non-designated-securities financing are obtained.Based on the results of the inference,ways to reduce risk are introduced.