For the theory of industrial organization in China's futures brokerage

[Abstract] China's current statutory bodies engaged in the futures brokerage business only futures companies and futures companies prevalence of small scale, excessive competition, market concentration is low, low market efficiency, it is difficult to adapt to China's economic development requirements in accordance with the futures market the principle of economies of scale restructuring of futures companies, optimize the structure of the futures company, has become the inevitable choice to promote the development of a strong futures companies as well as the futures industry.

[Paper futures brokerage industry; industrial organization, development trends

<< Futures Exchange Management Ordinance, the provisions of the futures company is operating futures business and financial institutions established by law. Futures company is to connect the bridge and link of the Futures Exchange and the investors, whose main business functions according to customers' orders for buying and selling futures contract to handle the clearing and settlement procedures, and customer account management, and control the risk of customer transactions, and futures market information but also for customers, futures trading consulting and act as the customer's trading advisers.

A, futures market structure

The market structure between constitute the market sellers, buyers with each other, as well as between the seller and the buyer such as the relationship between the factors and characteristics, its essence reflects the market competition and monopoly.

1, China's futures companies, market concentration

Market concentration (Concentration Ratio) is an important indicator to measure the market structure, a direct reflection of market dominance or the degree of competition.

China's futures market in the past years of the development process, regulatory authorities in the futures industry, the industry access to strict controls and futures companies, there are a number of small-scale retail dominated "the obvious characteristics of the industry from the market turnover and volume, market share of the turnover and volume of the 2006-2008 years ago, 10 futures companies were 14.8%, 31.6% and 13%, the relative concentration of 2007, the market turnover in the top ten market share proportion of 31.6%, but did not maintain a steady growth trend in the futures market, futures companies' competition performance in a fully competitive situation, calculate the Herfindahl - Hirschman Index, also shows that China's futures brokerage market is a competitive market far from the formation of industry leading companies.

2, the futures brokerage industry market entry barriers

Barriers to entry to enter a market, the obstacles encountered by the sum of the constituent elements of market access barriers are often integrated, including the absolute cost advantage, product differentiation, policies, legal system, the strategic behavior of China's futures approximation of a perfectly competitive market, industry barriers to entry, mainly from the policy and legal system, high-risk futures market characteristics determine the strict regulatory regime of the government regulators of the futures industry from the regulatory regime, China's futures industry is to focus on the regulatory regime on the futures The company's regulatory system: First, the implementation of concession system to enter and business futures company's business, strict management, the provisions of the futures company can not engage in, or engage in futures proprietary trading, the futures company rigorous risk controlled.

Approximation of a perfectly competitive market from the view of the market concentration of China's futures brokerage, futures brokerage industry in China, but China's government departments, the futures industry, but a strict regulatory regime. Completely into the barriers of view, the brokerage industry from China's futures brokerage market competitive market is far from being formed.

Second, futures market behavior

1, the price behavior of futures companies in China

The main features of the market structure of China's futures brokerage industry: There are many enterprises, each enterprise to provide basic undifferentiated products or services on the market there are many needs, the enterprises and demand for the company's products on the market or price of the services with complete information. Therefore, the futures brokerage industry in China in addition to restrictions on market access, close to a fully competitive market structure and futures companies, an average market price taker. long time, because the business of futures companies and operating a high degree of homogenization of the industry into long-term fee vicious competition, this homogenization, low levels of market competition, leading to the slow development of the entire industry. countries, despite the introduction of relevant regulatory requirements, but the length of this vicious competition does not eliminate.

Low processing fee "price war" is the primary means of competition within the industry. Constrained by national laws and regulations, a single content of China's futures business, the main agent in futures trading, fee income of futures companies, the futures company fee vicious competition. However, with the beginning of the futures investment consulting business, the price war of this fee will be a certain ease.

2, the non-price behavior of futures companies in China

Competitive behavior of the non-price competitive behavior outside vendors in order to expand market share, win greater profit purposes, take the price behavior of prominent non-price behavior of futures brokerage industry characterized by innovation, futures companies, mergers and acquisitions behavior, the cooperative behavior of other financial institutions and other non-price behavior, will become the main form of the futures industry competition is also a futures company culture ability.

Product differentiation (1). China's futures market, product differentiation, mainly the geographical differences in product sales, investors involved in the transaction differences, and differences in three aspects of investment products. Development of China's futures companies show great position in the ground imbalance, measured from the volume and margin balances, the development of the eastern part of futures companies in central and western. In addition, currently involved in futures trading only a small part of institutional investors, is basically the retail market. Moreover, in the futures investment consulting business before the introduction of China's futures can provide product differentiation is limited to the increase in futures trading-related services, a single brokerage lead to homogenization of the futures company. Links in the free paper Download Center http://www. (2 futures companies, mergers and acquisitions, cooperation and diversification from the perspective of the development of the international futures market, futures companies, the merger between the joint the same futures industry development trend of the difficulties faced by China's futures companies to force them to improve economies of scale, reduce costs, enhance the ability to resist risks, bigger and stronger futures between the merger and reorganization is an effective way to achieve these requirements. China a considerable part of the futures company as a diversification strategy of the parent company or shareholders enforcement. the same time, China's futures companies before a single brokerage, investment advisory business, diversification will be an important way for futures companies to create greater value.

Third, the futures company's market performance

China's futures brokerage industry subject to stringent regulation of the government at the same time filled with various forms of market competition. Therefore, the market performance of the brokerage industry in China is both a result of market competition, also contains government regulation.

1, the output of the futures company is growing

Futures company's main business is the agent futures, and thus the volume of transactions and trading volume of its output objects for agency transactions. Experience 1993-2000 rectification stage, since 2001, futures trading and gradually active, 2004 In February, the State Council promulgated the << to promote the reform and opening up of capital markets and stable development of a number of observations >> clear the position of a futures market in China's capital market system, and pointed out the direction for the development of China's futures market. With the understanding deepening of the increase in trading varieties of index futures to make China's futures market further expanded the breadth and depth. futures brokerage industry, constantly able to grow and development, its agent transaction amount showed a significant increase in trend, showing China's futures The market is to maintain the good momentum of rapid development.

China's futures lower level of profitability

The current scope of business of futures companies in China do not include self-employed business, futures company profits, a major source of fee income from brokerage services to provide customers with access to the futures brokerage business of the company's profit is also affected by many factors, including the size and structure of the futures company proxy transactions, costs and fees and commission standards, the scale of China's futures market is relatively too small, the futures brokerage business and profit model is relatively homogeneous, limit the growth and development of the futures brokerage industry. China's futures companies have been Since the main profits from the fees, coupled with the limited income through paid consulting and training services to get some futures companies, others, such as asset management, mortgage financing and other services can not be carried out, the futures company's source of income is extremely limited In addition, due to the small scale, economies of scale is not obvious, the relative costs and higher cost, so the futures company's total profit level is low.

Fourth, China's futures brokerage industry trends

1, the size of the futures company will continue to expand

Futures company bigger and stronger has become an important strategic development of the futures company to expand the scale to achieve economies of scale can not only improve the futures company's competitive, but also will greatly enhance the futures companies to participate in the international market competitiveness of the futures brokerage industry market concentration low, the market structure is close to perfect competition, it is difficult to achieve economies of scale gains by promoting the reasonable adjustment of the market structure in the futures brokerage industry, the futures brokerage industry market concentration, thus improving the market performance of the futures brokerage industry.

2, innovation and development trends

From the perspective of the development of futures markets of developed countries and regions, the futures market has a variety of products, business diversification, the diversification of the business model, innovative industry characteristics play a very important role in the development of futures markets in stock index futures after the release of the industry characteristics of financial innovation will become more prominent, futures companies, innovation is mainly reflected in the transaction technology innovation, service and product innovation and organizational model innovation. innovative behavior which led to the differentiation capacity resources to become a futures company's competitive advantage, will become the key point in the future development of the futures company, the same time, the innovation consciousness and futures companies will also become the key success factors of the futures company.

3, the diversification trend

With the development of China's futures market, futures products and the increase in the types of business, will lead directly and accelerate product and service innovation, service innovation and business model innovation, or even bring changes in the pattern of the industry as a whole. The launch of futures products moved faster and faster, and more financial and commodity futures referred to the launch schedule, with the introduction of the investment advisory business, the development of futures market depth and breadth of diversification for futures companies provide a broad platform for the launch of the investment advisory business that the end of the single futures brokerage business model, coupled with the scope of futures products is getting higher and higher to attract more enterprises to participate in the futures market, futures diversification provides more the opportunity will become an important trend in development by the futures company. Share in the free paper download center

Debt Market Papers