Design And Implementation Of Securities Market’s Trading Settlement Capital Monitoring System

In order to protect the legitimate interests of securities investors and guarantee the safety of the customers’funds, on February23of2010, CSRC(China Securities Regulatory Commission) released the No.2010-06Notice which officially approved the construction plan for securities trading settlement capital monitoring system and authorized SIPF to be responsible for the system’s construction, maintenance and routine management.The Notice specified the general progress and working requirements for the monitoring system construction. The monitoring system has been subjected to external testing, test running and full promotion&application in early March, July and September of2010respectively, with the increasing number of institutions and bodies involved. By the end of February,2011,73entities (depository and clearing corporation,21commercial banks, and51securities companies) have been involved in monitoring system construction and testing, accounting for60%of total market institutions to be tested. Specifically,21custodian banks all have participated in the testing;51securities companies with brokerage business in Beijing, Shenzhen, Shanghai, Jiangsu and Zhejiang all have been tested, accounting for more than50%of total securities companies to be tested; more than48.8million brokerage accounts have been involved, accounting for60%of the market total, covering various counter systems (Kingdom, Hang Seng, Apex, Rootnet, Sunguard) and corporate clearing system (Shine Technology) adopted by securities companies.At each stage, the monitoring system testing consists of three parts, i.e. interface testing, link testing and joint testing. So far, the monitoring system has completed6rounds of large-scale joint testing, data submission by tested entities has considerably improved regularity, accuracy and integrity, the number of problems identified during the testing are reduced, interface specifications and other important technical documents have received quite comprehensive review and amendment, testing scenarios have been enriched continuously, and the testing effects are prominent.The purposes and meaning of Monitoring System Construction includes: The monitoring system is a special system with which CSRC carries out the routine supervision, dynamic supervision and construct the long-term effective supervisory mechanisms for securities trading settlement capital.The monitoring system is intended to compare data related to securities market and client capital, timely identify and report misappropriations of client capital by securities companies, further improve the monitoring mechanism for client trading settlement capital, establish an industry-wide client capital monitoring system, monitor the securities market capital changes, timely discover market the manipulations, and earnestly protect the legitimate rights of securities investors.The monitoring system’s construction and application has an important role in facilitating SIPF to perform the functions of "monitoring securities company risks" and "protecting the legitimate rights of securities investors".The main Functions of Monitoring System includes:Data comparison:horizontally, data from securities companies are compared with those of depository and clearing institutions as well as the custodian banks, and vertically, the client capital is compared at the general account, sub-account and detailed account levels.Problem warning:through calculation and comparison, problems that might affect the capital safety can be timely identified and reported to supervisory institutions.Information sharing:share information as authorized with supervisory institutions and self-discipline organizations.Statistical analysis:in-depth data mining and study, a variety of estimation and analysis, generate data for different purposes, automatically generate analytical reports with a fixed format, and assist with statistical analysis for the entire securities market.5.Analysis and monitoring:undertake the long-term, collective and comprehensive date analysis of the client capital, study and establish a long-term effective mechanism for client trading settlement capital protection.