Analysis of the Management Model of Chinese Securities Companies
In this chapter we systematically describe the historic shifts and current status of the global investment banks management model. We begin by investigating their business division and functional orientation from the perspective of financial institutions and financial functions. Then we theoretically and empirically analyze the management model of foreign investment banks in the last century.
The long-term development of investment banks in the United States and Europe is market oriented. However, Chinese securities companies, in the context of the profound financial transformation and development, have their own unique management model. Beginning with 1987, this model can be divided into the following three phases:
1. Primarily mixed operation phase
2. Stringent separated operation phase
3. Coexistence of the mixed and separated operation phase
This section also comprehensively introduces today's management model and characteristics of Chinese securities companies. It clarifies the history of that management model, which has significantly been subject to the overall policies of China's financial reform. In addition, it has been closely related to the competitive landscape and market demands.
We then conclude that it is imperative for major investment banks to prefer the model of the financial holding company, which is a conglomerate organizational management model. However, the independent brokerage will not likely disappear in China's future. Also likely to remain in place for a long time are medium- and small-sized securities companies, which are a necessary complement to the financial holding company model. Even the private investment banking institutions with their partnership model will exist for a long time.
Finally, we look at an overall policy framework based on the forward transformation of Chinese securities companies. The choice of different models of various securities institutions will depend on their nature, strategic plans, and professional focus. All of these should be considered for regulatory policy making, which should coincide with different disciplines and characteristics in order to ensure that regulatory resources are well allocated.