The Study On China’s Securities Company Brokerage Business Profit Model

As we all know, the vast majority of China’s brokerage industry revenues from the brokeragebusiness, the vast majority of the brokerage business income from "traditional" brokerage business, that is,the commission business.As China began in2002, a floating rate of commission system,Major small andmedium-sized securities companies scramble to lower commission rates, resulting in the war of’’commission intensified ’’,and reached its peak in2009and2010.This "short board" phenomenon ofChina’s securities market will definitely limits the overall business development and innovation of oursecurities in the near future.Therefore, in such a context, studying the brokerage business profit model, inorder to put forward countermeasures for some of the new profit model, in their own survival anddevelopment of the securities companies need in this regard as well as to withstand the impact of foreigninvestment banking to meet the financial globalof competition, it becomes urgent and practicalsignificance.This article rational analysis the profit model of China’s securities brokerage business from the"identify problems-analysis of the problem-to solve the problem".The first is a question stage, described in detail the current situation and existing problems ofChina’s brokerage business and its calendar years’ brokerage business income, the cost situation andprofitability, to make such a quantitative analysis, We generally will form the overall perceptions of abrokerage business profit mode.Followed by the analysis of the profit model, including the cause of the problem of thebrokerage business profit model (from the income and costs) and the brokerage business and market concentration empirical analysis of the two sub-part.We know that the reason why the total income of thebrokerage business also continues to maintain a relatively high level, completely the role of tradingvolume, which rely on to win the low end of the extensive profit model is urgent need to change.Throughobservation, we found that at this stage of China’s brokerage business competition is in a state of theprimary similar to perfect competition, and its degree of market concentration is very small relative to theforeign is, so we would naturally think, is not to increase market concentration corresponding increase inthe total income of the brokerage business, follow this line of thought, we have established an empiricalanalysis of the model focus on brokerage business and brokerage business Value EViews regressionanalysis, we draw firm conclusions.Finally, solve the problem of profit model stage, that is to identify countermeasures to avoidonce the atrophy of the entire capital market transactions, the total income level of the brokerage businessis bound to accelerate the decline in trading volume and commission rate of double factors of this issuesolutions and innovative.For the above causes and empirical analysis, we know that increased marketconcentration is to increase the total income of the brokerage business, which determine the increase inmarket concentration is a method to solve the problem of the profit model.We can learn a foreignbrokerage business innovation road, can also be some other way to resolve and innovation measures.