A Research On The Trading System Of The Catastrophe Compensation Fund

Catastrophe is a familiar and terrible word for people who make many people familiar and fear. Once it appears, occurs, there would be so many lives die and so many homes collapsed. So many lives will die and so many houses will be destroyed.The catastrophe brings a huge loss to the victims who can’t be satisfied only by the assist of the government and other countries in the world. Catastrophe Do enormous economic losses and casualties to human beings. The work of resuming production and rebuilding after the catastrophe can proceed with the help of the governments. But government effort alone is not enough the life of the victims after the catastrophe falls into predicament. The purpose of framing setting up the catastrophe compensation fund is to provide the indemnification economic security to the victims, reduce the government’s financial pressure, keep maintain the good momentum of economic growth the development of the economy, and ensure the stability of the society. This paper is formed by consists of seven parts, which discussed discuss about the trading system of the catastrophe compensation fund.In the first part, the paper introduces the essential features of the catastrophe compensation fund. Firstly, we introduce the definition of catastrophe, the current situation of catastrophe and the countermeasures. Then we propose the urgency of setting up the catastrophe compensation system in our country. after analyzes the catastrophe insurance system which is popular in the world and the economic environment of our country.this paper makes the conclusion that the traditional insurance system isn’t suitable to our country. We need set up the catastrophe compensation system in our country. Finally, we introduce the operation features and the advantages of catastrophe compensation fund.The second part of the paper mainly introduces the features of the trading system It comparatively analyzes the trading system of the social security fund, the securities investment fund and some catastrophe insurance products. Then we propose that the catastrophe compensation fund’s trading system should take the purchase method of open-end fund and the trading method of closed-end fund in the secondary market together as the basic trading method. Finally, the paper discusses the risk which may take place in the transaction.The third part of the paper mainly introduces the participants in the transaction of catastrophe compensation fund. It includes the investor, the issuer, the custodian, the underwriter and the? These participants originate from the trading subjects of securities investment fund, but there are some differences. The paper adds the enterprises to the investor. The issuer is not the administrator, but is the subject who paid the compensation. The custodian holds some not in circulation’s funds. The sale style is just only the consignment. The registration bodies include the general fund’s registration body, the sales agent and the issuer.The fourth part of the paper mainly introduces the purchase method of catastrophe compensation fund. The purchase method takes purchase method of the open-end fund and the trading method of closed-end fund in the secondary market together, which has its own features.The last three parts mainly introduce three special trading systems. They are the minimum holding time, the highest holding amount and the registration system of catastrophe compensation fund.The minimum holding time means that if the catastrophe happened, only the investor who handheld the fund more than one year, would be given the complete compensation by the fund. This "one year" is defined by comparative analysis two methods. The one is based on discounting cash flow; the one is based on the normality catastrophe. Finally, it is defined by the second method.The catastrophe compensation fund’s highest holding amount means that if the catastrophe happened, only when the holding amount is less than the highest holding amount, the fund would give this inventor complete compensation. There are two methods could define this highest holding amount. The one is based on the catastrophe’s loss; another one is based on the inventor’s a certain percentage of assets. Finally, the highest holding amount is defined by the inventor’s a certain percentage of assets. This certain percentage is the reciprocal of the maximum compensation coefficient. The registration system is means that when the inventor purchase the catastrophe compensation funds, the inventor would be asked to choose an area which is in accordance with his registered residence as his registering area, when the catastrophe happened, if the area is the legal disaster area, the inventor would be given compensation. In the secondary market, if the registered area changed with the holder changing, the catastrophe compensation fund’s hold time should be renewed.The last part, the paper discusses the deficiency in this paper, the catastrophe compensation fund’s trading system just be the initial concept. Next, the researcher should take it in empirical study. Through the simulated trading test, the researcher should repeated verification all enactment, propose new problem, modify program and perfect the trading system.