The Internal Control Of Group's Futures Subsidiary

With the adjustment of national policy on the development of the futures market,and the establishment and improvement of the regulatory system,Chinese Futures have gone through the process from blind development to regulatory rectification,and reach the orderly development at last.As an effective complement to the Spot Market,Futures Market makes sense in guiding spot production.By taking advantage of the function of hedging,spot companies can lock in costs and achieve the expected profit.Nowadays many Groups own futures-brokerage subsidiaries,of which the research of Internal Control Management is badly needed.Examples of cases can be found from the development of the domestic and foreign futures market,related to the Internal control problems that lead to the bankrupt of Futures even the Groups.Under this background,it is very important to emphasize the Internal Control Management of Futures subsidiary.Through the special nature of the Group's futures subsidiaries,risk points on function of the futures brokerage company and client risk,the paper focus on the risks which the futures subsidiary must face to.An Internal control risk evaluation system is established according to the above risk points.First of all,the paper analyzes the level of the risks of Groups and the corporate function from four aspects including possibility,the profit ratio,compliance and reputation.And then,the client risks are analyzed from the two aspects: the safety of customer funds and the risk ratio of customer positions.Some methods and ideas for increasing the awareness of Internal control and evaluating Internal control in futures brokerage company are supplied in this paper.