Some people don't know what a securities company does. Securities refer to legal documents used to prove that the holder enjoys certain rights and interests. People often say that stocks and bonds belong to securities. These can be traded in the secondary market.
A securities company refers to a limited liability company or a joint stock limited company with independent legal personality, which is established with the approval of the the State Council securities regulatory authority in accordance with the provisions of the Company Law and the Securities Law and specializes in securities business.
Securities companies specialize in the issuance and trading of these securities. Members who own stock exchanges can underwrite the issuance (investment banking) and buy and sell securities on their own or as agents.
What do securities companies do? The business scope of securities companies includes: securities underwriting and sponsorship business: it refers to the recommendation of securities companies on the issuance, market and sales of securities when enterprises conduct initial public offering. Self-operated business: refers to a securities company that has sufficient funds and can directly enter the exchange to buy and sell stocks; In addition, it also provides financial services for customers' idle funds.
Types and contents of main business of securities companies
There are nine main businesses, namely: securities brokerage business, securities investment consulting business and financial consulting business related to securities trading and securities investment activities; Securities underwriting and sponsorship business, securities proprietary business, securities asset management business, margin trading business, securities company brokerage (IB) business, and direct investment business. Next, let's take a closer look at what these nine businesses do.
Securities brokerage business
Securities companies accept clients' entrustment to buy and sell securities as agents, and the source of business income is to charge them a certain percentage of commission. This kind of agent can be bought and sold through the counter or through the stock exchange, with the latter mainly in China.
When a securities company engages in this business, it may entrust a person other than the securities company to act as a securities broker, but the person must have the qualification of securities practice. Therefore, the securities qualification examination is very important.
Securities investment consulting business
Institutions engaged in this business and their consultants provide paid consulting services such as direct or indirect securities investment analysis, prediction or suggestion for securities investors or customers. Financial consulting business consulting, suggesting and planning businesses related to securities trading and securities investment activities.
Securities underwriting and sponsorship business
Securities underwriting means that securities companies issue securities on behalf of securities issuers, and there are two ways: consignment and underwriting. The main difference between the two is that after the underwriting period, unsold securities will be returned to the issuer by consignment, but underwriting is not the case. Securities companies will buy the rest and package them to the end.
Securities sponsorship refers to the issuer's application for public offering of shares, corporate bonds convertible into shares, and underwriting according to law, or public offering of other securities subject to the sponsorship system as stipulated by laws and administrative regulations, and hiring institutions with sponsorship qualifications as sponsors.
Securities proprietary business
In its own name, a securities company buys and sells securities for itself with its own funds or funds raised according to law to obtain income. A securities company must obtain the business license of the securities regulatory department to carry out its own business or set up a subsidiary to carry out its own business, and a securities company may not provide financing and guarantee for the subsidiary engaged in its own business.
Securities asset management business
As an asset manager, securities companies provide investors with investment management services for financial products such as securities, so as to maximize the return on assets.
Margin trading business
This business refers to the securities company lending funds to customers, so that customers can use the funds to buy listed securities or lend them for sale, while the securities company collects collateral.
Intermediary introduces business practice
After accepting the entrustment of the commission agent, the institution or individual engaged in this business can introduce customers to the commission agent and collect a certain commission from them. This business originated in America.
Direct investment business
Securities companies conducting direct investment business must set up direct investment subsidiaries, which are not allowed to conduct this business in other forms, and follow the principles of fairness, justice, legality and compliance, honesty and trustworthiness, and prudence.