The Investigation Report On The Feasibility Of Stock Pledged Repo Transaction Between XY Fund Company And A Company

In recent years,with the Chinese economy into the new normal,some enterprises have urgent need for transformation but find difficult in financing problem.As a innovative type of financing in Chinese financial market,stock pledged repo refers to the qualified financiers get funding from qualified investors by pledging listed company's shares they hold and agree to return the principal and interest in the future and receive their shares at the same time.Since it has similar characteristics of the bank credit business and has a certain effect of economic leverage,along with relatively low financing costs and convenient procedures,it achieves highly concern and actively participation by the financial market once lunched.Stock pledged repo plays an important role in invigorating securities market,revitalizing customer stock of assets,promoting the real economic development and increasing the income sources of financial institutions.Because this business is essentially a debt financing with clauses of pledge,however,it may has a negative impact on financial institutions,financial markets and the real economy if the process of risk control is improper.At present,imperfect risk management mechanism generally exist in this business,investors will be difficult to resist the impact of risk when facing credit crisis of financiers and difficulties in transforming pledge into cash.Therefore,it is of great practical significance to control and avoid the risk and minimize the default risk when carrying out the stock pledge repo business.The research report select a stock pledge repo business which the financier is A company.I handled this business during 2016 summer when I was a intern in XY fund company and mainly responsible for the due diligence.I deeply researched the basic situation of A Company and its pledged stock,collected a lot of first-hand information,combined with the theoretical knowledge of the research and analysis,and finally came to conclusions of feasibility of this business.On this basis,combined with the key issues encountered in the research process,the report gives recommendations of risk prevention to the financial institutions when carrying out stock pledged repo.