On the evening of November 3, the “securitiesThe “Standard Regulations for Calculation of Corporate Risk Control Indicators” has received the latest revision. Judging from the revision and launch of the current indicators in 2020, the industry has continued to develop steadily and no major risk events have occurred. What profound changes will this revision bring? Which businesses will develop more steadily under the new regulations? Which ones will be subject to strong constraints?In this regard, reporters from the Financial Associated Press interviewed manyBrokerage firmBusiness unit heads and non-bankProfessional researchers interpret the impact of this indicator adjustment.
Respondents generally believe that this revision aims to improve the scientificity, effectiveness and guidance of risk control indicators, to promote securities companies to increase their services to the real economy and residents’ wealth management, and to enhance the initiative and effectiveness of comprehensive risk management. sex, to enhance investmentbankLay a good foundation for service capabilities.
At the same time, strengthening capital constraints on key businesses reflects the orientation of strict supervision and ensures that no systemic risks occur. It will also help high-quality securities firms open up capital space and improve capital use efficiency and investment.bankservice capabilities, thereby improving the spatial ability of securities firms to serve the real economy and residents’ wealth management, which is conducive to maintaining the stability and development of the financial market.
Guotai JunanThe relevant person in charge of the Assets and Liabilities Department told reporters that the four simultaneous efforts of “promoting functions, supporting the good and limiting the classified supervision of the bad, comprehensively strengthening supervision, and consolidating the foundation of risk control” will stimulate the vitality of securities companies, better participate in the construction of capital market functions, and further strengthen the The efforts to serve the real economy and residents’ wealth management, while actively pursuing the path of capital-intensive, professional and steady development, will have a clear and specific guiding effect and help comprehensively promote the high-quality development of industry institutions.
Huatai SecuritiesWhen interviewed, the relevant business person in charge stated that this revision is based on the existing risk control indicator system, further improves the scientific nature and effectiveness of risk control indicators, and guidessecuritiesThe company optimizes its business structure and asset allocation to effectively prevent and control risks.
At present, our countrysecuritiesThe purpose of industry capital supervision is risk control, and the core risk control indicators are risk coverage ratio, capital leverage ratio, liquidity coverage ratio, and net stable funding rate. Compared with the January 2020 version, the core changes are as follows:
Capital leverage ratio (= core net capital/total on- and off-balance sheet assets): For three consecutive years, the denominator of AA-rated securities companies has been discounted by 30%.
Net stable funding rate (= available stable funding/required stable funding): Optimize the calculation of the denominator and lower itCSI 500short-term assets.
The risk coverage ratio and liquidity coverage ratio have also been optimized. For example, the risk capital calculation coefficient of high-quality securities companies has been reduced. The conversion coefficient of AA-level and above (inclusive) securities companies has been reduced from 0.5 to 0.4 for three consecutive years. After approval by the China Securities Regulatory Commission, it can be piloted Advanced risk measurement methods such as the internal model method are adopted to calculate risk capital reserves.
Interpretation 1: Helps in market making and investment in standardized stocks, bonds and other asset management plans.
After sorting out by reporters, this adjustment mainly involves five calculations in the “Calculation Standards”, including the risk capital preparation calculation sheet, the total on- and off-balance sheet assets calculation sheet, the liquidity coverage ratio calculation sheet, the net stable funding rate calculation sheet, and the risk control indicator supervision report. surface. Among them, optimizing and improving the risk control indicator calculation standards for securities firms to carry out market making, asset management, participation in public offering REITs and other businesses is the core content of this revision and is also of concern to the industry.
In the draft for comments, for securities firms that carry out market-making business recognized by regulatory agencies, the market risk capital reserves for financial assets and derivatives held in market-making accounts are calculated at 90% of each calculation standard; for a single investment in standardized assets The specific risk capital reserves for asset management plans and collective asset management plans are simultaneously adjusted from 0.3% and 0.5% to 0.1%.
Based on the above,Huatai SecuritiesRelevant business leaders said that a 90% preferential factor in risk capital reserve measurement for market-making businesses approved by the China Securities Regulatory Commission will help promote the development of securities firms’ market-making business and increase the trading activity of the securities market; for single assets that invest in standardized assets The risk capital preparation calculation standard for management plans and collective asset management plans has been lowered from 0.3% and 0.5% to 0.1%, which will help promote the scale growth of securities companies’ investment in standardized stocks, bonds and other asset management plans, and serve the financing of the real economy and the needs of residents’ wealth management.
The Xukang Financial Team of Huachuang Securities also told reporters that it can be seen that the draft for comments proposes that the asset management discount of securities companies that actively invest will be reduced from 0.5% to 0.1%. According to this adjustment, securities companies and asset managers may be encouraged to actively invest.
Guotai JunanThe relevant person in charge of the Assets and Liabilities Department further mentioned that the above revisions can further promote the active capital market and enhance the efficiency of serving residents’ wealth management needs.
Interpretation 2: Release the capital space of high-quality securities companies and improve capital utilization efficiency
Strengthening support for the good and limiting the bad, classified supervision, and releasing the capital space of high-quality securities firms are also important impacts of this revision. In this revision, the risk capital reserve adjustment coefficient and the conversion coefficient of the total assets on and off the balance sheet of securities firms with the highest classification evaluation for three consecutive years will be appropriately adjusted. Among them, the risk capital reserve adjustment coefficient of securities firms with Category A and AA level or above (inclusive) for three consecutive years will be adjusted from The previous 0.5 was lowered to 0.4, and the adjustment coefficient for the total assets on and off the balance sheet was clearly set at 0.7.
according toGuotai JunanAccording to the relevant person in charge of the Assets and Liabilities Department, this item was previously only applicable to institutions included in the pilot consolidation supervision pilot, but this time it covers all securities firms with excellent classification evaluations;Huatai SecuritiesRelevant business leaders believe that this adjustment is intended to encourage securities companies that are compliant and sound to become better and stronger and fully serve the real economy.Main forceIt plays an important role as a ballast in maintaining financial stability.
There is another amendment worth noting in the latest solicitation draft. “Whitelist” securities firms that have been rated AA or above for three consecutive years, after being approved by the China Securities Regulatory Commission, can pilot advanced risk measurement methods such as the internal model method to calculate risk capital reserves. In addition, for securities companies that have been approved by the China Securities Regulatory Commission to implement consolidated supervision, the calculation standards for relevant risk control indicators may be separately stipulated by the China Securities Regulatory Commission.
Guotai JunanThe person in charge of the Asset and Liability Department believes that this differentiated measure will provide greater room for serving the real economy for institutions with a higher level of risk management.Huatai SecuritiesRelevant business leaders said that this will help further improve the capital utilization efficiency of high-quality securities firms.
Interpretation 3: Risk management is highlighted, and the effectiveness and adaptability of indicators are further enhanced.
Highlighting risk management and further enhancing the effectiveness and adaptability of risk control indicators are also the impact and focus of this revision that cannot be ignored.
Guotai JunanThe relevant person in charge of the Assets and Liabilities Department believes that the consultation draft further improves the calculation standards and details the stable funds required for assets with different maturities based on business risk characteristics and maturity matching. Specifically, all other assets are adjusted from 100% to 100%. Within 6 months, more than 6 months – within 1 year (inclusive), and more than 1 year, they are measured at 50%, 75%, and 100% respectively. For some other asset classes with maturity periods within 1 year, the impact on long-term stability will be effectively reduced. The demand for funds contributes to the intensive use of capital. Among them, the measurement standards for over-the-counter derivatives and other products should be appropriately improved, and some regulatory indicators should be made clearer and more specific, which will help improve the effectiveness and adaptability of supervision.
Huatai SecuritiesThe relevant business person in charge also mentioned that based on the characteristics of business liquidity risk, the calculation of cash outflows and required stable funds in the next 30 days for on-site futures will be adjusted from bilateral calculation to calculation based on the unilateral maximum nominal principal of a single product, and calculation of all other assets. The required stable funds are adjusted from 100% to 50%, 75% and 100% according to different maturity dates, further improving the scientific nature of risk control indicators.
He also said that for higher-risk businesses such as equity OTC derivatives that have not achieved effective hedging risks, the risk capital reserve calculation standard will be increased from 20% to 30%, and risk supervision will be strengthened.
Interpretation 4: The ROE level of securities companies may be expected to increase in the future.
Focus on the development of the securities industry,Cinda SecuritiesChief of Non-Banking Financial IndustryanalystWang Fangchao said that the reform on the investment side has begun, and the wave of equity institutionalization may increase the capital market’s demand for the institutional business of securities companies, providing securities companies with opportunities to expand their balance sheets and develop. The current ability of leading brokerage companies to use tables continues to improve, and the ROE level of brokerage companies may be seen to increase in the future.
Guotai JunanLiu Xinqi, chief analyst of non-bank finance, also believes that it is expected that leading securities firms with competitive advantages in institutional business will directly benefit from policy dividends such as “appropriate relaxation of capital constraints on high-quality securities firms” and optimization of risk control indicators, effectively boosting ROE and relying on Stronger product specialization capabilities will allow us to better seize the reform opportunities on the investment side of the capital market. Calculated based on 2022 data, assuming that the leverage level of leading securities firms increases by “1” unit, the overall ROE will increase by approximately 2.1%-2.8%.
Founder SecuritiesXu Yishan, chief executive of non-bank finance, said that under this round of revisions, high-rated securities firms are expected to benefit more from the optimization of risk control indicator calculation standards.
Industrial SecuritiesXu Yizhou, chief analyst of the African Bank, also believes that the reduction of the calculation coefficient of risk capital reserve and the calculation coefficient of total assets on and off the balance sheet will have a direct benefit on the two indicators of risk coverage ratio and capital leverage ratio, and will help further improve the bond ROE level. promote.
Important measures to strengthen financial supervision and enhance investment banking service capabilities
It is understood that this revision of the calculation standards for risk control indicators for securities companies is an important measure to implement the Central Financial Work Conference’s recommendations on comprehensively strengthening financial supervision and enhancing the service capabilities of investment banks. In the previous series of measures to “activate the capital market and boost investor confidence” proposed on August 18 this year, in terms of stimulating the vitality of market institutions and promoting high-quality development of the industry, it was clearly stated that the calculation standards for risk control indicators of securities companies would be optimized and appropriately This revision is the implementation of the above-mentioned measures to relax capital constraints on high-quality securities companies. Among them, the revision has 7 core highlights:
First, this revision is an important measure to implement the Central Financial Work Conference’s plan to comprehensively strengthen financial supervision and enhance the service capabilities of investment banks.
Second, all business activities of securities firms are included in the scope of risk control indicators, and risk calculation standards are strictly set for innovative businesses and higher-risk businesses.
The third is to strictly set risk indicator calculation standards for securities companies to carry out OTC derivatives and other businesses, strengthen capital constraints, and enhance supervision.
The fourth is to optimize and improve the risk control indicator calculation standards for securities firms to carry out market making, asset management, participation in public offering REITs and other businesses.
The fifth is to appropriately adjust the risk capital reserve adjustment coefficient and the conversion coefficient of the total assets on and off the balance sheet of securities firms with the highest classification evaluation for three consecutive years.
Sixth, we will promote high-quality securities companies to pilot advanced risk measurement methods such as the internal model method.
Seventh, securities firms are required to adhere to the principles of penetration and prudence in setting aside risk capital, and prudently control business scale and growth rate.
It is worth mentioning that this revision of the calculation standards for risk control indicators for securities firms is an important measure to implement the Central Financial Work Conference’s recommendations on comprehensively strengthening financial supervision and enhancing the service capabilities of investment banks. It mainly reflects the four aspects of regulatory orientation:
The first is to promote functional performance. Further leverage the “baton” role of securities firms’ risk control indicators to guide securities companies to optimize their business structure and asset allocation, and increase efforts to serve the real economy and residents’ wealth management.
The second is to support the good and limit the bad, and conduct classified supervision. Appropriately expand the capital space of high-quality securities firms, improve capital utilization efficiency, become better and stronger, and serve as the main force serving the real economy and the ballast stone for maintaining market stability.
The third is to comprehensively strengthen supervision. All business activities of securities firms shall be included in the scope of risk control indicators, and risk calculation standards shall be strictly set for innovative businesses and higher-risk businesses.
The fourth is to lay a solid foundation for risk control. Through the revision of risk control indicator calculation standards, securities firms are guided to proactively strengthen risk management and follow the path of capital-intensive, professional and steady development.
(Source of article: Financial Associated Press)
Source of article: Financial Associated Press
Original title: Which securities companies will benefit from the latest adjustment to risk control indicators of securities companies? How does it affect the business landscape?Strive to follow the path of steady development of capital-intensive specialization
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