China's Securities Companies Financing Model Study

The securities company is always unacceptable to the financial supervise institutions. The funds of commercial banks are prohibited flowing into stock market by PBC, and the financing of the securities are banned by supervision departments of the government. Furthermore, because the inflowing amount and rates of social insurance funds and company annuity and QFII are restricted, the financing activities of the securities company are controlled strictly by the supervision department. Coincident with the blocking of the currency market of China, the inflowing market institutions which subject the securities company and other organization as the main body of fund managing have not formed. Overseas, America has shaped a financing model of the managing organizations marketing for 100 years, which attaches importance to financing tools and measures of market. And the financing company of Japan, Korea and Taiwan pay attention to the model of financing by the institutions.The problem of financing by securities company are determined by the insufficiency between the paid in capital and the capital employed. This situation restricts severely the fund demand of securities company.Along with the development of capital market and the enlarging business of securities company, the demand of fund increases gradually. The securities companies of China have to face the competition with the overseas large investment banks after China is admitted in WTO. How to develop a financing model adapted to the securities company of China has been a necessitous task.By comparing the main international financing model, reviewing the financing experience of overseas securities companies, This paper explores a financing model adapted to the securities company of China—form the specialized financial company of stock. Its main business consists of absorbing the deposit of funds and securities, loaning to the other managements to resolve the want of money supply in credit deal. As the only channel of loaning funds and securities in market, the financial company of stock simplifies the transferring process of financing and is convenient for...