The Orientation Of The Securities Brokers’ Development In China’s Capital Market

It has been more than twenty years since the modern capital market in China was established. By viewing the evolvement of the Chinese security market, it might be perceived that, in the past, most of the security companies were operating passively by just "waiting for new customers and taking care of existing clients". Now, they have shifted their marketing strategies and services to a more positive way. At the same time, it has been found that brokerage is making more profit than ever before and it has been taken notice that brokerage should be one of the key engines to make a profit for the business. Hence, in such circumstance, it could be concluded that the brokers taking more and more important role within the daily business and management of the security companies. Taking the example following in this study, it has been shown that from2008to2011, the commission fees made by brokerage take up47%、38%、43%and35%of total revenues, respectively for each year.Additionally, by viewing the brokerage operation of security companies in China, it might be summarized that, firstly, disparity has been existing among the huge number of brokers resulting from the difference of abilities and capabilities. Moreover, because of the specific job character of brokerage, mobility is high, comparatively to the employees on some other positions. Therefore, the companies’risk management seems to be difficult to some extent due to the lack of the training of brokers. Secondly, it has been implied that the service by brokers appears to be not comprehensive to clients. Thirdly, it has been also accepted generally that the input and output of marketing by brokers differ largely. Even though it could be seen that those problems described above are still waiting to be resolved, brokers’role is taken a greater notice of. Thus, in order to survive and develop in the competitive market, it might be suggested that security companies must make an improvement of management on brokers innovatively and practically. Synchronously, compatible broker team should be attached for companies’further strategic development.This study is arranged into five chapters. The first part depicts the background, objectives and methodology of this study. Then, the revelatory management policies and methods by some global investment companies are enumerated in the second part and the possible implications to Chinese security companies are given as well. Further, the third chapter discusses briefly about the development of management policy on brokers among companies in China. Meanwhile, some visible problems are outlined. In the fourth part, several feasible ways to those problems in the third section are analyzed in detail and eight constructive suggestions are brought forward. Finally, the study is concluded in part five.Based on the understanding of laws and policies on brokerage management in China and the literature review on larger amount of case studies, this study generates a few advantages and disadvantages among several cases of brokerage management by employing the comparative research method. In addition, aimed at the problems with brokerage management in China, this study provides several doable advices to those problems and prospects the future of brokerage management.I have been working within the security market for more than fifteen years, on the start of which, I was working as a counter. At the moment, I am a manager of operation on risk controlling and policy following. By this fifteen years experience, I have been witnessing almost the entire development of the security market in China. Twenty years ago, the security companies competed confusedly, sometimes even illegally in the market. In the result of stricter authorizing by government, companies are operating more and more compliantly. Meantime, the important role of a broker has been regarded as basic. Hopefully, this study could offer some significant instances and proposes with my experiences and those from others. Whereas the limitation of the depth and extent of my knowledge, it will be fairly helpful if anyone points out any drawbacks.