Commission: Timely Introduction Of Refinancing Business

Margin trading business has been launched since March 31, 2010. 16 months later, the "refinancing" business is finally breaking the ground.

The China Securities Regulatory Commission yesterday issued three drafts covering the margin trading business, including the revised trial and Approval Measures of the refinancing business (Draft) (hereinafter referred to as the "draft for refinancing"), the revised draft of the "securities company margin financing business trial management method" and the "securities company financing and margin business pilot internal control guidelines" revised draft, and solicited opinions until September 4th.

The introduction of "refinancing" will undoubtedly greatly boost the market influence of the financial instrument.

So-called

No profit making purpose

Securities and financial companies are the main body of refinancing business.

The securities and Futures Commission said that securities finance companies are not for profit.

From the draft of refinancing, we can see that securities and financial companies will also be responsible for monitoring the securities lending and lending business of securities companies in the future. We should monitor the operation of securities margin trading and securities lending and margin trading, monitor and analyze the situation of margin trading in the whole market, etc., and the securities and finance companies can formulate the monitoring rules for securities companies and securities lending businesses, and establish a credit evaluation mechanism to determine the credit lines of securities companies.

The selection of a securities finance company to change its registered capital, shareholders, directors, supervisors and senior management personnel shall be approved by the SFC.

At the same time, securities and financial companies should regularly submit annual reports, monthly reports and interim reports to the SFC.

The refinancing bill gives the securities finance company the right to determine and adjust the refinancing rate and margin ratio by itself.

Judging from the situation before the Morning Post reporter, the current rate of conversion of securities and financial companies is not less than the benchmark lending rate of the same period. The initial rate is up by 10 percentage points, and the rate of conversion to different periods is 6.3% to 6.5%.

The rate of integration of the securities lending is tentatively fixed between 1.5% and 2% of the total market value of the borrowed stocks, and the rate of refinancing is temporarily set at 3.5% to 4%.

Securities and financial companies gain income by integrating and melting interest rates.

Securities finance companies have conditions.

Use

Like securities dealers in developing securities lending and lending businesses to their clients, securities companies must also submit a certain margin to the securities and finance companies for refinancing business as a trust property for financial bonds of secured securities.

The margin can be charged to the securities, but the cash portion should not be less than 15%.

Securities and finance companies will keep the securities deposited by securities companies on a daily basis.

It is noteworthy that the draft of refinancing stipulates that securities and financial companies can make use of the deposit deposited by securities companies with the written consent of the broker.

The specific purpose of the use of securities, such as the use, duration and consideration of the margin, shall be stipulated by the two parties through the refinancing business contract.

However, the draft does not point out which securities companies can use brokerage margin to invest in.

The SFC read out that the provision was designed to revitalize the margin of securities dealers and improve their efficiency, calling it a common practice overseas.

The draft of refinancing also stipulates that the amount of risk capital preparation of a securities finance company must not be lower than its net capital; the balance of securities financing companies' refinancing of a single brokerage firm shall not exceed 50% of the net capital of a securities financial company; the securities securities company shall not exceed 5% of the negotiable market value of the securities.

It is stipulated that the balance of each security margin received by a securities financial company shall not exceed 10% of the total market value of the securities.

The draft has identified 4 ways to integrate capital: issuing corporate bonds; borrowing subordinated debt to shareholders and other specific investors and counting into net capital; integrating funds through the business platform of stock exchanges, such as securities repurchase into capital; and integrating funds through the business platform of securities and financial companies.

And integration into securities can only be integrated into the way through the stock exchange's business platform.

financing

There is a threshold for refinancing.

After 1 months ago, the SFC pferred the direct investment business to the regular business of the broker, and the threshold for margin trading linked to the net capital of the broker was finally dismantled.

The new management method abolished the requirement of higher net capital level and classified evaluation result for the qualification of the business at the pilot stage, and deleted the requirement that the net capital of the applicant should be above 1 billion 200 million yuan.

In addition, it is also determined that the securities dealers who have the qualification of securities underwriting, securities self financing or asset management business shall apply for the increase of margin trading business. The registered capital shall be no less than 500 million yuan, and the registered capital of these three businesses can not be applied without less than 100 million yuan.

However, the new management method retained the access conditions through professional evaluation and system testing.

At the beginning of the launch of the refinancing business, it will only carry out the business for some securities dealers who meet the requirements.

Hard indicators include net capital, classified supervision and so on.

The securities dealers participating in the trial will have different margin lines, and the amount of credit will be linked to the net capital of the securities dealers, and they must pay a certain proportion of margin to the securities and financial companies, but cash will also be owned by the securities companies.

The margin ratio will be linked to the broker's rating, and the high margin ratio is low.