Foreign Securities Firms Apply to Buy Local JVs to Take Lead in Eased Market
Zhou Ailin
/SOURCE : Yicai
Foreign Securities Firms Apply to Buy Local JVs to Take Lead in Eased Market

(Yicai Global) July 2 -- A slew of foreign-funded securities firms have applied to take a controlling stake in their joint ventures with local companies as the Chinese government has eased the shareholding restrictions for overseas firms.

The United Bank of Switzerland, Japanese brokerage firm Nomura Securities and US investment bank JPMorgan Chase are among the applicants, the China Securities Regulatory Commission reported.

The UBS Group will show less hesitation about its investment of capital and resources with a stronger sense of ownership given a 51 percent stake in its joint venture securities firm, Qian Yujun, president of UBS China, told Yicai Global in a recent financial development forum. The Swiss investment bank currently owns only 24.99 percent of UBS Securities, its JV securities arm in China, to which the European parent holds exclusive management rights.

There are only two fully licensed securities brokers under foreign management in accordance with the current rules. One is UBS Securities, and the other is Goldman Sachs Gaohua Securities, which was co-founded by US bank Goldman Sachs Group and Gaohua Securities in Dec. 2004. 

The next step for the applicants will be the Shanghai-London Stock Connect, and a number of firms are aiming to play an active role when the bourse connect scheme opens, potentially this year, Qian suggested.

For the qualified firms the Shanghai-London Stock Connect involves market-making business and helping Chinese companies go public in London, Qian said, adding that this will be an opportunity for foreign securities firms to provide underwriting services at home and abroad.

Editor: Emmi Laine 

Follow Yicai Global on
Keywords: Financial Regulation , Joint Venture , Business Analysis , NBS , The United Bank of Switzerland , Nomura Securities , JPMorgan Chase