The pace of foreign securities companies entering the mainland market is fast.
According to the CSRC on January 10, the materials submitted by BNP Paribas for the approval of the establishment of securities companies have recently been accepted by the CSRC. It is proposed to initiate the establishment of securities companies, and the name is tentatively determined as “France Pakistan securities (China) Co., Ltd.”.
With the further opening of China’s capital market to the outside world, overseas investment banks have taken the Chinese market as a strategic highland for future business development. The entry of foreign capital will make the competition in China’s financial market more intense. Foreign institutions will develop more mature in business, technology, management, talent cultivation, risk control and other aspects, which will promote the integration of China’s financial market with the world, Bring a series of development opportunities such as business expansion and internationalization to Chinese securities companies.
the proposed establishment of France Pakistan securities by BNP Paribas was accepted by the CSRC
According to the CSRC on January 10, the materials of the approval for the establishment of securities companies submitted by BNP Paribas have been accepted by the CSRC. It is proposed to initiate the establishment of securities companies, and the name is tentatively determined as “France Pakistan securities (China) Co., Ltd.”.
On April 27, 2021, the CSRC received the approval materials for the establishment of securities companies from BNP Paribas. It is understood that BNP Paribas is a well-known financial institution in Europe. According to the information on the official website, BNP Paribas currently has nearly 500 employees in China, providing banking, financing and consulting services to customers through corporate and institutional banking and international financial business departments. In addition, BNP Paribas is also committed to enterprise consulting and overseas equity financing in China. BNP Paribas currently holds shares in Bank Of Nanjing Co.Ltd(601009) and Haifutong fund.
According to the data, by the end of the third quarter of 2021, BNP Paribas was the largest shareholder of Bank Of Nanjing Co.Ltd(601009) with a shareholding ratio of nearly 14%; In 2003, BNP Paribas and asset management company Haitong Securities Company Limited(600837) established Haifutong fund company, which currently holds 49% of the shares of Haifutong fund company.
In September 2019, faba became one of the first batch of foreign financial institutions approved to carry out class a lead underwriting business of non-financial enterprise debt financing instruments, and landed the first business in December of that year, which is also one of the first batch of two foreign banks to obtain this qualification. Previously, three foreign banks, including France Pakistan bank and HSBC, were approved to conduct the lead underwriting business of “overseas enterprise Panda Bonds”.
foreign capital is rushing to the mainland market
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. Up to now, there are 9 domestic and foreign holding securities companies, 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 addition, there are many foreign investment banks in line.
The entry of foreign financial institutions is not only attracted by favorable policies, but also optimistic about the performance of the Chinese market. In terms of policies, the door of China’s opening up is opening wider and wider. Even in the face of the impact and impact of covid-19 pneumonia, the pace of reform and opening up of China’s capital market has not slowed down, but further accelerated. The pilot registration system of science and innovation board and gem has been implemented smoothly; The proportion of foreign shares and business scope of the securities, funds and futures industry and the national treatment have been fully implemented; The Shanghai Shenzhen Hong Kong stock connect, Shanghai London Stock connect and ETF interworking have continued to expand; The innovation and opening-up of public REITs, futures and options and other products have been steadily promoted, and their attraction to global financial institutions and investors has been significantly improved.
Wang Jianhui, a senior person in securities business, expects that more foreign wholly-owned securities companies will enter the Chinese market in the future. In terms of medium and high-end business, foreign capital will rapidly expand its share in relevant fields and constantly consolidate this existing advantage.
then, what impact will foreign securities companies frequently layout China have on China’s securities institutions and markets?
Chen Li, director of Chuancai Securities Research Institute, said that the accelerated entry of foreign capital will bring a certain “catfish effect”, forcing Chinese securities companies to improve their management level and internationalization. For the market, the participation of multiple participants will enhance the activity of the market. Of course, foreign securities companies also need to conduct compliance operations in combination with Chinese laws and regulations in China.
“The core competitiveness of foreign securities companies lies in the scientific management system and more experience in product innovation and design.” Chen Li said that the advantage of domestic securities companies lies in a deeper understanding of local industries and enterprises. The participation of foreign securities companies may intensify industry competition in the short term, and small and medium-sized securities companies face greater competitive pressure. On the other hand, it will also urge Chinese securities companies to improve their competitiveness, promote the optimization and adjustment of industry structure, and go farther and farther on the road of specialization.
At present, foreign capital accounts for about 5% of the circulating market value of the A-share market, which means that there is much room for the opening of the capital market to the outside world. Fang Xinghai, vice chairman of the CSRC, said at the 2021 China Singapore (Chongqing) strategic connectivity demonstration project financial summit that the CSRC will continue to strengthen the construction of capital market system and improve market depth and liquidity by focusing on the reform of registration system. We will continue to optimize and expand cross-border investment channels such as connectivity, enrich product supply and supporting systems for cross-border investment, and facilitate cross-border investment and risk management. Strengthen regulatory cooperation and information sharing among regulators, and improve cross-border capital flows and risk monitoring and prevention mechanisms. Improve the completeness, transparency and predictability of systems and rules, and consolidate and improve the market-oriented, legal and international business and investment environment.
(source: China Securities Company)
