Market specialization and relative risk isolation.
At present, in Taiwan Province Province, almost all large securities companies have set up wholly-owned futures subsidiaries, and these securities companies participate in the financial futures market through subsidiaries. Mr. Xie Menglong, Secretary General of Taiwan Province Futures Association, said that there are three main reasons for the formation of such a pattern in Taiwan Province futures market: First, it follows international practice. Whether it is the developed European and American financial futures markets or the emerging markets around the United States, South Korea and Singapore, trading financial futures in specialized places is conducive to risk control and management. Second, relatively isolate market risks. Keeping the spot market and futures market relatively isolated can effectively prevent the systemic risk of one market from spreading to the whole capital market when it occurs. Third, follow the existing laws and regulations. Article 12 of Taiwan Province Province's Futures Trading Law stipulates that' futures trading shall be conducted in futures exchanges'. Therefore, the participation of securities companies through futures companies has become one of the effective ways. Of course, in Taiwan Province Province, securities companies can directly participate in financial futures trading as members of the exchange, but the fact for many years is that without a high-level internal risk control system, securities companies are unwilling to participate directly. Because once directly involved in futures trading, once default occurs, securities companies need to fulfill their repayment obligations with all their assets.
So, how do all kinds of financial institutions in Taiwan Province Province participate in the financial futures market? There are three main ways to choose. First, securities companies, commercial banks, insurance companies, trust and investment companies and other institutions directly apply to become members of futures exchanges to participate in financial futures trading after being approved by their respective competent departments. At the same time, when the market defaults, all their own assets are used as financial resources for performance. The second is to set up or hold a futures company, with the participation of financial institutions such as securities, insurance and banks. Third, securities companies, as the introduction brokers of futures companies, attract customers or introduce their existing customers to commission merchants, and at the same time charge commission for introduction.
The trading assistant model in Taiwan Province futures market originated from the United States, and the improved trading assistant system in Taiwan Province Province only allows securities companies to apply. The introduction of this mechanism has played a positive role in the development of Taiwan Province's futures industry: on the one hand, its appearance has expanded the marketing channels of related futures products and facilitated the participation of market investors; On the other hand, for securities companies, it is realized that they can participate in futures trading with all their own assets without having to bear the liability for compensation; At the same time, for futures traders, it has also increased a large number of stable customer resources. However, the IB mechanism in Taiwan Province Province also has some shortcomings. The main manifestations are as follows: because IB will eventually submit customer orders through futures commission merchants, once the market fluctuates greatly, the futures commission merchants' own customer orders may take precedence over IB customers, thus causing great losses to IB customers; Secondly, IB mechanism objectively increases the intermediate links of transactions, which in turn increases the cost for customers to participate in the market.
Actively guard against risks
Introduce capital adequacy ratio and adjusted net capital to actively guard against risks.
As for the business scope that a securities company can engage in, Taiwan Province Province of China evaluates it by introducing the capital adequacy ratio index, and stipulates that the ratio of qualified net self-owned capital of a securities company to the amount of operational risk shall not be less than 65,438+0.50%. If the standards are not met, the business scope that securities companies can engage in will be limited.
For futures companies, Taiwan Province Province introduced the concept of adjusted net capital to effectively manage the excessive speculation of futures companies in the financial futures market. The adjusted net capital consists of adjusted assets (usually current assets plus margin) minus liabilities and other adjustment items. The adjusted net capital is not only an important standard to measure the company's risk tolerance, but also directly linked to the open position of futures contracts held by the company in Taiwan Province financial futures market. Futures companies and clearing members shall calculate the adjusted net capital on a daily basis, and the adjusted net capital of futures companies shall not be less than 10% of the total amount of their customer margin accounts.
Therefore, if futures companies want to expand their business capabilities, they can only expand their scale by increasing capital investment and improving their financial capabilities.
Strengthen daily settlement monitoring
The daily settlement monitoring operation of Taiwan Province financial futures market in China is basically the same as that of the three existing futures exchanges in Chinese mainland, which can be divided into online monitoring and offline monitoring.
But unlike Chinese mainland, in order to control risks more effectively, Taiwan Province Futures Exchange divides the risk control system into three parts: pre-monitoring, in-process real-time monitoring and post-monitoring. Among them, intra-day real-time monitoring includes intra-day liquidation operation, intra-day entrustment operation and intra-day position monitoring operation. In a trading day, the Exchange will make a three-day profit and loss trial calculation of the open positions of clearing members according to the real-time market price or a specific price (determined by the Exchange considering the changes in the market conditions at that time) to understand the rights and interests of the margin accounts of clearing members during trading hours. If the margin of the clearing member is lower than the maturity level, it will issue an intraday resumption notice and restrict the operation of adding new positions as appropriate.
Margin setting in settlement
Margin is the guarantee of performance, and both buyers and sellers may default. Therefore, the Taiwan Province financial futures market implements the full margin method, that is, the margin is calculated by the sum of the positions held by the clearing members of the trading places of the buyers and sellers.
As far as margin setting is concerned, the margin in Taiwan Province financial futures market can be divided into two levels: settlement margin and trading margin. Among them, the settlement deposit is the deposit charged by the exchange to the settlement members; Trading margin refers to the margin charged by a settlement member to a non-settlement member or a non-settlement member to a customer. Trading margin can be divided into two parts: initial margin and maintenance margin. Initial margin is the margin that traders must pay when they engage in futures exchanges, while maintaining margin is the minimum margin standard for traders after holding positions, which serves as the benchmark for margin payment.
Financial resources in case of default
In the process of dealing with risk events, establishing a fair and reasonable financial resource system in the futures market can not only enhance the confidence of market participants, but also help regulators to deal with default events effectively and quickly.
For clearing institutions, Taiwan Province financial futures market has established a four-level repayment chain in terms of financial resources of default events. From the beginning to the end, the chain is: settlement margin-exchange risk reserve-settlement funds paid by each settlement member-shared by settlement members. The settlement fund mentioned here means that all companies applying to become settlement members must pay 20% of the paid-in capital as the settlement fund. If a settlement member increases the entrusted institution or new branch of a non-settlement member, the settlement fund shall be increased accordingly, so as to improve the risk payment ability of the settlement member.