With its strong capital strength and strict risk control system, Yingtong Securities has withstood the test of several financial storms in the past 40 years, even safer than banks. At the worst of the financial crisis in 2008, Lehman Brothers, a famous American investment bank, went bankrupt. American investors turned their assets from banks to Yingtong and regarded Yingtong as a safe haven. Thanks to the stable financial strength of Yingtong, from June 2008165438+1October to June 2009165438+1October, Yingtong's customer assets and customer cash increased by 77% and 65% respectively.
Strict risk control, safer than banks
A. Yingtong Securities attaches great importance to the protection of investors. Yingtong will determine the cash and securities owed to customers on a daily basis, and allocate funds specifically to repay these liabilities, and maintain a large emergency fund. Yingtong is the first trading broker approved by FINRA (according to 15c3-3) to calculate the customer's reserve obligation on a daily basis, while the industry standard is to calculate the value on a weekly or monthly basis.
Yingtong's optimized customer protection mechanism can reduce the risk that customers will not be able to get the full return of funds due to the liquidation of the company. In almost all other trading brokers, the amount owed by the company to customers is calculated in weeks or months. This means that the funds deposited by customers after the calculation node will be risky, because these companies generally only guarantee the funds deposited in the final calculation. Yingtong will calculate the liabilities to customers every working day and allocate repayment funds. In the extreme case of company dissolution, it will be easier for the trustee to determine the company's debt to each customer. If other trading brokers are dissolved, the trustee needs to replicate the activities of the past week, which will greatly extend the time to return funds to customers, as happened in the bankruptcy case of Lehman Brothers.
B. Yingtong applies real-time risk margin requirements to customer accounts, while most peers apply end-of-day risk margin requirements. If the customer's assets are not enough to cover the risk of open position, Yingtong will usually close the position in real time to make its account meet the margin requirements again. Other trading brokers usually allow customers to keep this risk for a few days.
C. Yingtong Securities has no proprietary position. Act as a promoter of customer transactions and do not make any directional bets. The two biggest bankruptcies of trading brokers in the past decade (Lehman Brothers and MF Global) were caused by the risks caused by proprietary positions.
Because Yingtong does not hold proprietary positions, the risk of bankruptcy and client's funds being trapped is much smaller than that of other trading brokers holding proprietary positions. In addition, Yingtong's customers don't have to worry about their brokers placing the opposite self-operated orders.
D. All trading brokers can lend securities (called "re-mortgage") if the customer requests to borrow with margin. When the customer's securities are re-mortgaged by Yingtong, funds will be reserved on a daily basis, and the amount is 103% of the market value of the re-mortgaged securities. Most other brokers just set aside money every week.
E. Similarly, unlike other trading brokers, Yingtong will also distribute cash on a daily basis for securities that are owed to customers and are not in well-controlled places (custodians or trustees who hold customers' assets with the approval of the US Securities and Exchange Commission). This is a very common phenomenon in the industry and is called "isolated deficit". Other trading brokers may let this deficit last for a few days before taking necessary measures.
F finally, yingtong is not an affiliated company of the bank, but most of the trading brokers with the same asset size are affiliated companies of the bank. In the global financial crisis, this independence from banks will enable the company to provide a more stable platform for its customers.
Because the trading brokers associated with banks are faced with supervision from banking regulators, when bankruptcy occurs, the ownership of assets will be unclear. Since Yingtong is not a bank broker, it will be more efficient than the trading broker under the bank in returning customers' assets. In addition, in the event of a financial crisis, all financial resources of Yingtong will be used to ensure the continuous and smooth operation of the trading brokerage business. On the contrary, the equity of bank-type trading brokers comes from banks, which are usually established as holding subsidiaries of banks. Unlike Yingtong, these banks are trading brokers, not self-sufficient independent entities, which brings an extra layer of risk to customers. In the event of a financial crisis, these brokers will compete with their bank branches for capital and liquidity. This may lead to the flow of funds from trading brokers to relevant banking entities, thus harming the interests of broker customers. Lehman Brothers and Bear Stearns are lessons from history. They grabbed capital from trading brokers in the financial crisis and tried to save banks, which was the root cause of their financial difficulties. Both companies finally filed for bankruptcy. Therefore, their customers have gone through a long process of asset evaluation and account transfer.
Customer assets are managed in isolation to ensure the safety of funds.
The customer assets of Yingtong Securities are isolated in special custody bank accounts designated for Yingtong customers, such as Citibank, Standard Chartered Bank and Wells Fargo. This protection measure is strictly implemented in accordance with the requirements of the Securities and Exchange Commission (SEC) of the United States. No institution or individual, whether it is Yingtong Securities or Xue Ying Securities, can touch or misappropriate customers' assets.
As the assets of clients are completely separated from those of brokers, the assets of clients of Yingtong Securities are deposited in the accounts of clearing institutions, and brokers have no right or ability to dispose of any assets in clients' accounts. Even if Yingtong Securities or Xue Ying Securities go bankrupt, customers' funds are still safe and will not be affected.
Only accounts with the same name can deposit and withdraw money to avoid the risk of misappropriation of funds.
The transfer-in and transfer-out of customer funds need to be carried out through the customer account with the same name. Every time a customer withdraws money, a series of security checks will be carried out. If it does not meet the security check, even if it is an account with the same name, Yingtong will require additional materials to prove that this bank account belongs to you, thus completely avoiding the risk of misappropriation of account funds.
It is strictly protected by American supervision and enjoys high insurance compensation.
The customer accounts of Yingtong Securities are also regulated by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Company (SIPC).
The customer accounts of Yingtong Securities are protected by the Securities Investor Protection Company of the United States (SIPC) with a maximum of 500,000 US dollars (with a cash limit of 250,000 US dollars). According to the excess SIPC compensation policy agreed between Yingtong Securities and the underwriters of Lloyd's Insurance Company of London, a single securities account also enjoys an additional protection of up to 30 million US dollars (with a cash limit of 900,000 US dollars), with a total limit of one hundred and fifty million US dollars.
Securities Investor Protection Company (SIPC) is a non-profit company established by the US Congress and funded by SIPC member brokers, which is used to protect the clients of securities brokers when they are in bankruptcy crisis.