The Revolution Of Commission Institution And The Research On Security Brokerage Development

Commission system is a systematic arrangement for commission charge object, standard and pattern. Lowering of commission charge standard contributes to the improvement of security market's efficiency and resource allocation. Since 1970s, we have witness a wave of deregulation in world's main security markets. The similar change-abolish of fixed commissions and introduction of negotiated commissions ?is also seen hi china's security markets. The limitations of fixed commissions brought a negative effect on china security markets' efficiency, commission-return phenomenon arose as a result of malignancy competition among security companies. It is believed that adoption of negotiated commissions is inevitable. The influence brought by such a change on security markets is a comprehensive one, which focus on brokerage services. Facing a fiercer competitive environment, many security companies make efforts to develop new brokerage services, and undertake strategic transformation of brokerage earning pattern, which, in America, can be represented by ML model, model and E*Trade model. Valuing creation, providing specific services for customers and developing own competitive advantage are the common concern of there models.Brokerage service are an important activity of security company, especially for china security companies, commission earnings take more than half a share of their total earnings. After the introduction of negotiated commission system, china security companies' brokerage activities face great challenge, which is mainly from: changes in cost and profit; challenge on the traditional brokerage service managing pattern; request for new brokerage services; ask for brokerage service managers.Based upon study on successful brokerage service patterns hi America and research on the operation of some security companies' brokerage departments, this article aims to give a comprehensive analysis of the challenges on china brokerage service brought by adoption of negotiated commissions, further to put forward some suggestions summarized as: 1) reforming brokerage earning pattern; 2) function changes of brokerage departments: from purely trading place to "finance market"; 3) strengthen security brokerage institution; 4)create new security products and transactional market, which will benefit the development of security brokerage hi China.