Banking News
- Approval of brokerage
Date: 14-Dec-2007 Sources: (Shenzhen Daily)
THE government would soon publish rules that would allow the resumption of foreign investment in domestic brokerage ventures, but a 33.33 percent stake cap would likely remain in place for the near term, the China Securities Journal reported Thursday.
The China Securities Regulatory Commission had submitted a proposal to the State Council, or Cabinet, to open the country's capital markets wider to foreign investors, according to the newspaper.
Foreign investors were allowed to take no more than a 33.33 percent stake of a domestic brokerage joint venture, according to current securities rules, but the investment cap may be raised to a maximum of 49 percent in the future, the newspaper said, citing unidentified sources.
Under the new rules, Sino-foreign brokerage joint ventures would be allowed to underwrite bonds and local currency A-share listings in primary markets but would not be allowed to offer stock broking and asset management services in secondary markets at the initial stage, the newspaper said.
Foreign investors would be allowed to increase their stake and to expand the scope of their brokerage joint ventures gradually when conditions were ripe, the newspaper said, without elaborating.
The new rules would also further ease restrictions of the qualification of foreign institutions, which may want to invest in Chinese brokerages, the newspaper said.
Foreign investors could either choose to set up brokerage joint ventures with their local partners or directly invest in an existing Chinese securities house to tap the country's booming securities business, it added.
The government said in May it planned to resume issuing licenses for securities ventures in the second half of the year after a two-year overhaul of the country's brokerage sector.
A group of senior U.S. government officials, including U.S. Treasury Secretary Henry Paulson, are in China this week to push China for wider access for foreign investors to the country's rapidly expanding capital markets.
Last week, Credit Suisse signed a memorandum of understanding to establish a strategic relationship with Founder Securities in a move aimed at setting up an investment banking joint venture to expand its business in China, according to an internal memo.
Morgan Stanley also inked an initial agreement with China's Fortune Securities for a proposed investment banking joint venture, in which the Wall Street bank aimed to own at least 33 percent, industry sources said.
On Thursday, Zhang Xiaoqiang, vice head of the National Development and Reform Commission, China's top economic planner, said the securities, banking and insurance regulators had reaffirmed at high-level talks with the United States this week that China could open its financial markets only gradually.
Zhang, speaking to reporters on the sidelines of the 'strategic economic dialogue?at Xianghe outside Beijing, said China also wanted the United States to be more open to Chinese investments.
'I feel there is a very big gap between the real investment climate in the United States and the free investment they have portrayed to us,'Zhang said.
Sponsor Results:
