Investment Policy News
- Brokerage cap to be lifted for foreigners
Date: 31-May-2007 Sources: (Shenzhen Daily)
THE government will raise the ceiling for foreign investment banks' stake holdings in domestic brokerages and joint ventures before the year-end, to open the sector wider to overseas investors, domestic media reported yesterday.
A foreign investor can currently only buy up to a 20 percent stake in a domestic securities firm, while the maximum for foreign stakes in Sino-foreign joint ventures is 33 percent.
Tu Guangshao, vice chairman of the China Securities Regulatory Commission, was quoted by domestic media as saying that the government plans to gradually raise the ceiling by the end of this year.
He made the remarks at a domestic financial forum Tuesday, domestic securities newspapers reported.
The U.S. Treasury Department last week announced a series of reforms that it said China had committed to during the second round of the U.S.-China strategic economic dialogue.
As part of those commitments, China will lift a freeze on the entry of new foreign securities firms and resume licensing securities companies, including joint ventures, in the second half of 2007.
Overseas banks looking for new sources of growth are eager to enter the Chinese market, whose key stock index has nearly quadrupled in value since the start of last year on surging turnover. The number of brokerage accounts this week surpassed the 100 million mark.
Citigroup and Merrill Lynch are tipped to be among the first beneficiaries of the fresh market opening, industry analysts said.
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