A securities company refers to an enterprise that provides securities business services. In recent years, with the development of the securities industry, many securities companies have set up many subsidiaries, but there are also many problems, so the government has also issued relevant regulations to manage the subsidiaries of securities companies.

All securities companies shall define the business boundaries of various subsidiaries and shall not carry out non-financial business. In principle, only one subsidiary can be set up to operate a class of business, and the subsidiary should operate professionally and not concurrently. Private equity subsidiaries are limited to private equity investment fund business and other private equity fund business; Alternative subsidiaries engage in alternative investment business such as financial products and equity other than the List of Securities Self-investment Varieties of Securities Companies, and may not engage in business other than investment business; Where a securities company establishes a subsidiary to provide other non-securities financial services, it shall be managed with reference to the Regulations on the Administration of Subsidiary Companies for Alternative Investment.

1. Conditions for a securities company to set up a subsidiary: A securities company shall meet the following prudential requirements when setting up a subsidiary:

1) The risk control indicators in the last 12 months have continuously met the prescribed standards, and the net capital in the last 1 year is not less than1200 million yuan;

(2) It has a sound corporate governance structure, risk management system and internal control mechanism, which can effectively prevent the risk transfer and conflict of interest between the securities company and its subsidiaries;

3) Having strong management ability, setting up subsidiaries to engage in securities brokerage, securities underwriting and sponsorship or securities asset management business, and its market share in the company in recent 1 year is not lower than the medium level in the industry;

(4) Other requirements of China Securities Regulatory Commission.

2. The business rules of securities companies include: business risk isolation system, securities self-discipline management rules, independent management rights, customer fund management, etc. Article 139 of the Securities Law stipulates that the transaction settlement funds of clients of securities companies shall be deposited in commercial banks and managed in the name of each client. Specific measures and implementation steps shall be formulated by the State Council.