Brokerage Fund Custody Business And Risk Management

With the reform of national financial system deepening, fund custody business has broken through the restrictions of commercial banks, allowing non commercial banks and other financial institutions into the fund custody business field. This not only makes the traditional commercial bank have competition in the fund custody business, but also brought new challenges to securities companies to expand new business and to improve management of the fund custody business. Domestic and foreign experts and scholars have begun to pay close attention to the positive impact to the securities fund custody business bringing, however the study on the risk management and prevention of the fund custody business of the security company is scanty.This study is based on the current research background, conducts the research in view of the risk It points out the fund custody risk is part of the fund industry risk.Management problems in the Fund custody business of Security companies, put forward the special risk of securities companies in the fund custody business that is different from the fund custody business of commercial banks. Through the current situations of security companies’ fund custody business, we can find out the classification of the special risk that is:the securities custody risk due to the third party deposit management; the securities cash transferring risk due to the manual online banking; the securities fund accounting risk due to security company incapable of valuation non-standard investment; the securities fund investment monitoring risk due to the security company incapable of monitoring non-standard investment; the securities bankrupt risk due to security company incapable of preventing moral hazard arising from the private equity fund manager because of the private equity fund manager’s bad reputation. After the cause analysis of security companies custody risks, this paper pays attention to the risk management experiences of foreign custody business, and on the basis of reference to the management experience, designed "risk control matrix" to measure and regulate the securities custody risk, the risk management and preventive measures is proposed:Securities custodian should strengthen physical storage inventory managed system to guard against the "securities custody risk"; securities custodian shall strictly follow maker checker function and authorization system to guard against the securities cash transferring risk; Investment monitoring system and manual monitoring method should be combined to guard against the securities investment monitoring risk; securities custodian should specify the terms of the contract to prevent securities fund accounting risk; Securities custodian should strengthen the management of people due diligence and using the operational control method to prevent the securities bankrupt risk. Finally, in order the risk prevention strategy proposed can be effectively put into implementation, this article also put forward the corresponding measures from the external legal environment, the internal management point of view.Through this research, we suppose to help security companies to recognize the managed risk in the process of custody business and to have a reference of the fund custody business risk management.