The CSRC has published the ‘New 9 articles for China’ to reform of Chinese capital market. This is a reflection of support from government. The market will be more open and competitive through innovation and price competition. The release of ‘New 9 articles for China’ means the time is ripe for market reform， harmonization for both direct investment and indirect investment， as well as increase of the capital market weighting in China national economy. The tremendous opportunity for securities industry is coming.
It is observed that different business lines accounts for significant different percentages for China and the U.S. By comparing the business percentages in two countries in chart 1， we see too much reliance on brokerage business while the asset management business is too small in China. Also， according to our survey， respondents believe that new business， such as OTC derivatives， interest rates product， structural product and PE， will triple the average income for securities industry in 5 years， as shown in chart 2.
Ⅳ.Conclusion
The new guidelines published by SAC are aimed at resolving situations like the ‘cash crunch’ last year. For securities companies， new requirements are beneficial for improving their comprehensive risk management and liquidity risk management. However， certain refinement may be appropriate or it may limit the development of securities industry in the future. With the ‘New 9 articles for China’， the government has shown their determination to promote growth of the capital market in an orderly fashion. Securities firms will have their golden opportunities to expand aggressively. However， talents， capital and regulatory oversight are the biggest challenge in the future.
Author brief introduction
Mr Andy Chen， EMBA， MEng， FRM， PMP
Head of China，
Chappuis Halder & Co
Mr Andy Chen is currently Head of China for Chappuis Halder & Co. He has advised many of his Financial Services clients on how to integrate risk into strategic decision making and financial performance， and developing corporate risk monitoring， mitigation， and transfer frameworks.
Mr Chen possesses more than 15 years of experience in the banking and consulting industry. Prior to CH&Co， he was a Director at Barclays Capital and worked in Credit Suisse and ICBC Asset Management.