With the continuous opening of China’s capital market to the outside world, at present, the restrictions on the proportion of foreign shares in the three major fields of securities, funds and futures have been fully liberalized, and the wholly-owned foreign holding mode has also been successfully implemented.
In 2021, China’s securities industry will usher in opportunities and challenges. According to the data, the number of domestic and foreign holding securities companies has increased to 9, including JPMorgan securities (China), the first wholly foreign-owned securities company; In addition, 21 foreign-funded securities companies are queuing up to apply for establishment.
In this regard, Chen Li, chief economist of Chuancai securities and director of the Research Institute, said in an interview with Securities Daily, “Under the background of accelerated opening of China’s capital market, the entry of foreign capital will make the competition in China’s financial market more intense, and foreign-funded institutions will develop more mature in business, technology, management, talent cultivation, risk control and other aspects, which has obvious advantages compared with Chinese securities companies.”
21 securities companies with foreign background
is queuing to apply for the establishment of
In July 2019, the office of the financial stability and Development Commission of the State Council issued the relevant measures on further expanding the opening of the financial industry to the outside world, which advanced the time point of canceling the restrictions on the proportion of foreign shares of securities companies, fund management companies and futures companies originally scheduled for 2021 to 2020, and officially implemented from April 1, 2020.
In this context, the long-term allocation value of A-share assets has been fully reflected; At the same time, many foreign-funded institutions have expressed their willingness to actively participate in the construction and development of China’s capital market.
Specifically, during the year, two foreign-funded holding securities companies officially launched the exhibition industry. In June, Daiwa Securities (China), a Japanese holding securities company, and DBS securities, a joint venture securities firm from Singapore, obtained the license to operate securities and futures business issued by the CSRC; In the same month, Credit Suisse Founder Securities Co.Ltd(601901) was also renamed “Credit Suisse Securities (China) Co., Ltd.”.
According to incomplete statistics by the reporter of Securities Daily, at present, the number of foreign holding securities companies has reached 9, including Morgan Stanley Securities (China), Credit Suisse Securities, DBS securities, Daiwa Securities, Goldman Sachs Gaohua securities, UBS Securities, HSBC Qianhai securities, Nomura Oriental International Securities and JPMorgan securities (China).
In terms of new securities companies, in April this year, Citigroup announced that it would withdraw from its personal business in 13 global markets, including China, but would continue to actively seek and evaluate new business opportunities in line with its own advantages and development characteristics in the Chinese market, including seeking to prepare a securities company and a futures company. On December 2, Citigroup’s application for the establishment of Citigroup securities (China) Co., Ltd. was received by the CSRC.
Subsequently, on December 24, the CSRC gave feedback on the application documents for Standard Chartered Bank (Hong Kong) Co., Ltd. to establish a wholly-owned securities company, Standard Chartered securities (China) Co., Ltd., including please supplement whether the punishment or investigation of the institutions controlled by Standard Chartered group has been comprehensively sorted out, and further demonstrate that the overseas shareholders “have ranked among the top in the world in terms of business scale, income and profit in recent three years”, And the proposed general manager, the joint director and managing director of the capital market department of Morgan Stanley Huaxin securities from 2011 to 2021, is the head of the first level department. Please provide the relevant work certificate issued by Morgan Stanley Huaxin securities, and clarify the reporting path of relevant positions and whether it is the head of the first level department.
According to the reporter’s incomplete statistics, at present, a total of 21 foreign-funded securities companies are queuing up to apply for establishment. Among them, in 2021, materials submitted by four companies including Huayi securities, faba securities (China), Rixing securities and Citigroup securities (China) were accepted by the CSRC, while those still in the process include Wenzhou Zhongxin securities, Yunfeng securities, Guangdong Hong Kong Securities and Hanhua securities.
foreign “catfish”
frequent movements in the year
Under the background of the two-way opening of the capital market and the substantial relaxation of the access of foreign institutions, the “catfish” of foreign capital moved frequently during the year.
Many foreign investors want to “go to a higher level” after obtaining the absolute control of joint venture securities companies in China. In March, 16% of the equity of UBS Securities was listed and transferred on the official website of Beijing Equity Exchange, and the transferee UBS group may increase its share of UBS Securities to 67%; In July, Morgan Stanley’s shareholding in Morgan Stanley Securities (China) increased to 90%; In August, China Securities Regulatory Commission approved JPMorgan International Finance Co., Ltd., the controlling shareholder of JPMorgan securities (China) Co., Ltd., to file the transfer of equity held by five domestic shareholders to become the sole shareholder of JPMorgan securities (China), which also marks that China’s first foreign-owned securities firm will spend JPMorgan Securities (China); In addition, in December last year, Goldman Sachs started the process of acquiring 100% equity of Goldman Sachs Gaohua, and there is no new progress at present.
In order to obtain more business qualifications, in July, after Goldman Sachs Gaohua obtained the qualification of wealth management and proprietary business and increased the business of securities brokerage, securities investment consulting, securities proprietary and consignment sales of financial products, the CSRC approved Goldman Sachs Gaohua to engage in follow-up investment on the science and innovation board and gem through its subsidiaries. In addition, Shengang securities, East Asia Qianhai securities and Morgan Stanley Securities (China) all applied to the CSRC for changing their business scope; In terms of the latest progress, on December 15, the CSRC approved the qualification of margin trading of securities in Hong Kong. On the same day, the CSRC also approved the qualification of East Asia Qianhai securities margin trading business and engaged in alternative investment business through the establishment of East Asia Qianhai investment (Shanghai) Co., Ltd.
It is worth mentioning that Goldman Sachs, Gaohua and UBS Securities are on the “white list” of securities companies recently released by the CSRC.
With the development of economic globalization and capital market reform, China’s capital market has entered a new pattern of comprehensive opening-up. Chen Li said, “From the perspective of opportunities, the entry of foreign-funded institutions into China will drive the influx of overseas funds, promote the further expansion of the scale of China’s financial market, continuously improve the market mechanism, promote the integration of China’s financial market with the world, and bring a series of development opportunities such as business expansion and internationalization to Chinese securities companies. At the same time, foreign-funded institutions will also bring more advanced technology and business model and more complete Good management and risk control system will help Chinese securities companies optimize their own weaknesses and improve their business level. Especially from the perspective of investment and research business, large overseas financial institutions have perfect research mechanism and rating system, and the professional ability of employees is high as a whole, which can accelerate the improvement of investment and research specialization of Chinese securities companies. ”
(Securities Daily)
