A circle of friends has spread, what is the current situation of the two financial institutions?

Finance Associated Press, January 31 (Reporter Lin Jian) A screenshot of the circle of friends of South China brokerage employees made the tension about the liquidation of the two financial institutions spread for a while. The screenshot mentions that "the number of customers in the company's business department today is the largest since 2018, more than in April 2022." What is the truth? The reporter of the Financial Associated Press conducted a comprehensive investigation.

The overall feedback is that there are risks, but they are controllable at present.

"If the financing customer touches the liquidation line, the company will first call the customer to communicate, or add margin, or sell stocks, or replenish funds. The company generally does not directly force liquidation, and will give customers a buffer time of 1-2 days. The person in charge of the relevant business of the brokerage replied to the reporter.

In addition, the reporter learned that in recent days, some financial customers have indeed touched the warning line of maintaining the guarantee ratio and there is a forced liquidation, but it is not a large-scale abnormal situation. A person from a brokerage in East China said that many customers had taken the initiative to withdraw from the two financial businesses in advance.

In addition, according to the feedback of brokers, the regulator also pays close attention to the situation of the two brokerages and communicates the situation at any time.

What is the real situation of the two integrations?

Through interviews with the two financial business departments and business departments, the reporter has a more consistent view that the current financial risks are controllable as a whole, but with market shocks, the potential risks will increase.

Specifically, on the one hand, the situation of the two financial customers touching the warning line of maintaining the guarantee ratio has indeed increased, but with the gradual standardized development of the market and the continuous improvement of the relevant regulatory rules, the risk control awareness of investors has been improved, and the pre-risk prevention and control of the two financial businesses of securities companies has also been gradually improved.

On the other hand, potential business risks remain. There is widespread concern among practitioners that a sustained decline in the market could lead to greater risks.

At present, the balance of the two financial institutions has continued to shrink. Wind data shows that at the beginning of January, the balance of the two financial institutions was 1.65 trillion yuan, and the financing balance was 1.58 trillion yuan, and as of January 30, the latest scale of the two financial institutions was 1.58 trillion yuan, and the financing balance was 1.52 trillion yuan, which shrank, and the balance of the two financial institutions on January 30 decreased by 9.222 billion yuan compared with the previous trading day, which decreased for three consecutive trading days.

On the whole, the recent decline in the balance of the two financial institutions is related to the continued weakness of the market. In January this year, the overall performance of A-shares was weak, and the three major indexes all recorded six consecutive negative monthly lines. Among them, the Shanghai Composite Index fell by more than 6%, the Shenzhen Component Index fell by more than 13%, and the ChiNext Index fell by more than 16%. In addition, the STAR 50 index fell by nearly 20%, and the BSE 50 index fell sharply by 22%.

An interviewed person in charge of the business said, "The time when customers enter the market is different, and every time there is a big fall, there will always be some customers with high costs who touch the liquidation line, but it is relatively linear." However, if the customer is unable to add and replenish funds, he can only choose to sell part of the stock to reduce the maintenance ratio, and this part of the sale will have some impact on the market. If it continues to fall according to this situation, the number of customers who touch the liquidation line will gradually increase, which will exacerbate the downward trend of the market and form a negative feedback. ”

The picture shows the latest data of market margin trading business

It is worth mentioning that the reporter noticed that the data of the securities company showed that on December 29, 2023, the average maintenance ratio of the market was 254.3%, and by January 30, 2024, the average maintenance ratio dropped to 234.5%, a decrease of nearly 20 percentage points.

Some customers have withdrawn in advance or made up positions to avoid risks, and brokerages have increased early warnings

The forced liquidation system of the two financial institutions, the so-called "liquidation of the two financial institutions", refers to the forced disposal of the customer's position by the brokerage firm under certain conditions in the process of margin trading. Specifically, when the assets in the credit account cannot meet the statutory standard, the brokerage will first notify the investor to replenish the margin. If the investor is unable to replenish the margin in time, the brokerage can exercise the system of forced liquidation, direct freezing or deducting the margin in the account or selling the securities in the investor's account, and use the proceeds to pay off the arrears of credit transactions.

"When the customer triggers the liquidation line or emergency liquidation line in the intraday, the sales department will notify the customer to add the guarantee. After receiving the early warning from the account manager, most customers will take the initiative to cooperate with the insurance call or sell the stock, so that the maintenance guarantee ratio will return to the warning line. The interviewed person from the East China sales department said. The reporter learned that since January, the brokerage business department has strengthened the risk warning, and most customers have received early warning tips from the account manager.

Another person from the brokerage and financial business said that many customers have recently chosen to add margin, so there is no large number of liquidations. At present, brokerages generally give customers a buffer period of 1~2 days, and will not force liquidation immediately. At present, the overall maintenance guarantee ratio of brokerage and financial customers is relatively much higher than the liquidation line.

It can be seen that in recent years, the risk control measures of the two financial services have become increasingly standardized and market-oriented. Some brokerage and financial personnel mentioned in an interview that the regulatory authorities have recently understood the situation of customers touching the warning line, and strengthened normalized communication and management.

The reporter recently learned that the regulator has recently adjusted the evaluation criteria for the "white list" of brokers, which is related to the development of securities companies and focuses on the supervision of compliance and risk control of brokers. The new indicator mentions that "in the past two months, the increase in the default scale of self-owned funds and the proportion of the amount of the existing two financial positions in the net capital are significantly higher than the normal level of the industry, and the potential credit risk and liquidity risk of the company's self-operated positions are significantly higher than the normal level of the industry. ”

Focusing on individual brokers, in recent years, on the one hand, brokerages have continued to strengthen the dynamic control of transactions, refine the concentration of positions and volatility monitoring, and on the other hand, they have continuously improved customer credit and maintained a reasonable collateral structure, so as to effectively prevent the risk of default, especially the occurrence of large losses.

(Finance Associated Press reporter Lin Jian)