The full name of "third party depository" is "third party depository of customer transaction settlement funds". In the past, in securities trading activities, the settlement funds of investors (that is, customers) were kept by a securities company. Later, the CSRC stipulated that customers' transaction settlement funds should be uniformly deposited by third-party depository institutions. Third-party depository institutions here refer to commercial banks with third-party depository qualifications.
"Third-party depository" is a business provided by commercial banks, which is often used in securities, futures, real estate and other trading activities. Taking the third-party depository in securities trading as an example, it means that according to the requirements of laws and regulations, the depository bank is entrusted to take charge of the deposit and withdrawal of customers' funds and the delivery of funds, and the securities trading operation remains unchanged. Securities trading settlement funds of clients of securities companies shall be deposited by banks.
This business follows the principle of "securities firms manage securities and banks manage funds", and strictly separates investors' securities accounts from securities margin accounts. Under the third-party depository mode, securities brokerage companies no longer provide customers with access services for transaction settlement funds, but are only responsible for customer securities transactions, share management and clearing and settlement.
Depository banks are responsible for managing customers' transaction settlement fund management accounts and customers' transaction settlement fund summary accounts, providing customers with transaction settlement fund access services and providing settlement support for securities brokerage companies to complete enterprise fund settlement with registered settlement companies and foreign exchange recipients.
The bank is responsible for completing the transfer of clearing funds between the investor's special deposit account and the brokerage bank settlement account, and handing over the brokerage clearing and settlement procedures to the bank, which will complete them on its behalf.
Advantages of third-party hosting:
1. Funds are more assured: in the past, customers' deposits were deposited by a securities company, and misappropriation often occurred. The customer's transaction settlement funds are uniformly deposited by the third-party depository bank, and the customer's margin is guaranteed by the dual credit of commercial banks and brokers, so as to ensure the payment of the customer's funds, and the customer's capital security can be guaranteed and more assured;
2. Access is more worry-free: customers can not only complete the transfer through the original way of brokers, but also complete the deposit and withdrawal of funds and the transfer between bank accounts and margin accounts through bank counters, telephone banking and online banking;
3. More intimate service: customers become the same customer of the brokerage and the bank, and can not only continue to enjoy the investment and wealth management services provided by the original brokerage, but also enjoy various comprehensive wealth management services of the bank.
4. As the deposit is kept by commercial banks, it is convenient for the state to supervise the illegal funds entering the securities market.
To sum up, after implementing the third-party depository system, there are many benefits.