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Does a number of futures companies change the cost constraints of closing the business department or the transformation and upgrading?
Jun 20,2019 16:13CST
The content below was translated by Tencent automatically for reference.

SMM News: as a bridge and link between traders and exchanges, futures companies are playing an important and irreplaceable role in serving national strategies, serving the real economy, providing professional services, disseminating information about the futures industry, helping clients improve trading skills, effectively controlling traders' risks, and so on. Every move of futures companies will not only affect the development of the industry, but also affect the heartstrings of traders.

Recently, the Futures Daily combed the changes in the business department of the futures company from the beginning of the year to now. It is found that the changes in the business premises of the futures company since the beginning of this year not only reflect the development of the brokerage business of the futures company, but also reflect that the whole industry is changing imperceptibly.

Heavy cost burden, a number of futures companies change and terminate their business departments

According to incomplete statistics, since January this year, according to incomplete statistics, a total of 107 futures companies have changed their business premises and places of registration, 16 have opened their business departments, 10 have set up new branches, and 29 have ceased business.

In an interview with the Futures Daily, a number of futures companies said that the change of the business place and place of registration of the business department and the closure of the business department are generally based on several major reasons, such as reducing operating costs, meeting regulatory compliance requirements, facilitating business development, changing marketing positioning, optimizing the internal management of the company, and so on.

Undeniably, in the current futures company brokerage business development shows an overall profit decline trend, the operating cost of the business department is too high, regulatory compliance requirements become stricter, business development is more difficult for futures companies, there is no doubt become a burden and difficulties. In the case of no open source, futures companies can only "cut expenditure" and adjust the business department.

According to founder medium-term futures president Xu Danliang, in 5, 6 years ago, the office space of the business department of the futures company is still relatively large, but at present, the operating cost of the business department is much higher than before. The main reason for the increase in operating costs is that compared with before, the business volume of futures companies has increased, regulatory compliance requirements have improved, futures company compliance specialists and other backstage personnel must also be full-time personnel, the cost of the business department has also increased.

"so now our business department will choose higher quality, but not too large office space as the office space. The opening of the business department of Shanghai Futures Building in April and the adjustment of the office space of Xi'an Business Department in May are based on this consideration. " Xu Danliang said.

Zhao Xi, deputy general manager of Guantong Futures, told Futures Daily that the business department of Guantong Futures opened in Shijiazhuang in April, and that the change of place in Dalian Business Department in June was related to the change of marketing direction of the company, but also in response to regulatory compliance requirements.

"as the competition in the futures market has intensified in recent years, and the company has actively responded to the guidelines of the CSRC on compliance, a new business department has been set up according to the business process." Zhao Xi said.

Opening an account on the Internet to accelerate the continuous downsizing of the Business Department

With the continuous development of the Internet, more and more customers choose to open accounts and trade online, which also promotes the continuous simplification of the business department of futures companies.

Huang Xiao, general manager of Beijing's first futures, told the Futures Daily that with the development of the Internet, opening an account on the Internet has reduced the cost of the business department to a certain extent. Under this influence, when a business department has little potential for development, there are few sources of capital for institutions and industrial customers, and when they continue to lose money, futures companies will consider shutting down.

According to Huang Xiao, Beijing's first futures company has also shut down several business departments in recent years. In April this year, the company found that the market expansion of the Langfang business department was difficult, and the potential was not great, and did not achieve the desired results. Considering the problems of venue rent, inconvenient transportation, increased labor costs, and so on, the company shut down the business department in time.

Guo Feng, general manager of CIC Anxin Futures, also told the Futures Daily that based on the continuous progress of the Internet, for futures companies, most of the brokerage business can be handled through the network, and only a few businesses need to be on the counter, such as the modification of the capital code.

"therefore, the intensive management of futures companies will become the development trend in the future, a lot of business will be concentrated in the headquarters, the business department, branch will evolve into a pure front desk management department, more is the development customer, the service customer, the business processing quantity will be less and less." GE Feng said.

The policy supports the establishment of a new branch, with subsidies ranging from tens of thousands of yuan to 1 million yuan

According to the reporter of the Futures Daily, at present, in order to promote the development of the local financial industry, many local governments have certain preferential policies and financial support for the establishment of business departments and branches of financial institutions, but the standards vary from tens of thousands to hundreds of thousands of dollars. With the help of policies, a number of futures companies have increased their enthusiasm for setting up branches.

In September last year, in the "policies and measures for promoting the Construction of Dalian Regional Financial Center" (hereinafter referred to as "measures") issued by the General Office of the Dalian Municipal people's Government, there were provisions encouraging the introduction of various financial branches. "measures" said that the newly introduced futures companies and other financial institutions of the first-class branches, to give a one-time settlement award of 1 million yuan. For the newly introduced futures company business department, give a one-time settlement award of 200000 yuan. In addition, the "measures" also encourage the headquarters of financial institutions to set up branches in different places, and stipulate that the headquarters of financial institutions shall be rewarded with 100000 yuan for each branch and branch office, and a 50, 000 yuan reward for each branch set up at the headquarters of a financial institution.

It is reported that Jianxin Futures in March to set up a new northwest branch has received subsidies from the local government.

"the establishment of the Northwest Branch is mainly to develop and serve the industrial customers in the western region. The previous network of the company is mainly concentrated in the central and eastern part, and the northwest is in a blank state, so it is necessary to fill it. In addition, the subsidy policy provided by the local government has also played a role in promoting the establishment of our network. " Li Hongwei, general manager of Jianxin Futures Marketing Management Department, said.

Xu Danliang said that from the business department to turn the brand into a branch, hundreds of thousands of government subsidies will also have indicators for the exhibition of futures companies. After upgrading from the business department to the branch, the assessment indicators will be biased towards industrial and institutional customers. We also have to bear more responsibility for the indicators of the organization's business.

Futures companies will move further and further along the road of transformation and upgrading

Generally speaking, since the beginning of this year, the change and closure of the business departments of a number of domestic futures companies and the new establishment of branches reflect the general trend of timely transformation of the marketing positioning of many futures companies and adapting to the continuous standardization of regulatory compliance requirements. A number of futures companies continue to closely adhere to the purpose of serving the real economy, and gradually embark on the road of characteristic and brand management, and futures companies are constantly adjusting and actively transforming.

According to the China Futures Industry Association, the overall operating income of the futures industry fell by 4.72% in 2018 compared with the same period last year, and the net profit fell by 83.65% compared with the same period last year. Industry insiders pointed out that compared with 2018, the development of the futures market this year is still severe.

From the perspective of the profits of the brokerage business of futures companies, the income of traditional fees in 2018 generally showed a downward trend.

The operating income of many futures companies has increased significantly, mainly from the contribution of risk management subsidiaries. The main business of the risk management subsidiary, the current business and the over-the-counter derivatives business grew rapidly last year.

Although the money in the brokerage business is becoming more and more difficult to earn, it seems that the resources of the traditional brokerage business will not dry up any time soon.

GE Feng told the Futures Daily that the future development prospects of the futures brokerage business are still very broad, and there will be more and more opportunities, and the key lies in the futures companies to find a model to serve the real economy and serve the development of the entire industry. Cultivate and enhance the ability to meet the needs of risk management of real enterprises, based on this, futures brokerage business will have more room for development.

In Xu Danliang's view, the brokerage business in the next 5 to 10 years is still one of the very important sources of revenue and profits for the futures industry, and cannot be given up lightly. More importantly, on the basis of the development of brokerage business, futures companies should study the transformation and turn the traditional channel brokerage business into a brokerage business with wealth management and risk management as tools.

"in China, it is very difficult for retail investors to invest in the futures market to make money, and the key point is to turn retail investors into product investors. For retail investors, futures companies make more efforts in enriching product sales; for institutional customers, it is hoped that with the adjustment of industry policies, the risk management business can be transferred to futures companies, and futures companies can make use of over-the-counter trading, so as to provide comprehensive services for the personalized risk management of institutional and industrial customers, and form a supplement to the brokerage business of futures companies. "

Zhao Xi also said: at present, the prospects for China's economic development are getting better, and in the future, futures companies will increase their characteristic operations in professional areas, take asset management, investment consulting, and other businesses as a starting point, and increase specialization, transformation and upgrading, and serve the real economy more professionally.

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