Our company size and global strength mean that we have unique advantages to help Chinese companies achieve global growth and help international investors enter China’s increasingly mature capital market.” Since the CSRC announced in April 2020 that the restriction on the shareholding ratio of foreign shareholders of securities companies would be abolished nationwide (that is, the previous restriction on 51% of foreign shareholders would be completely abolished), there have been continuous news of major foreign giants expanding their business in China.
At present, there are a total of 9 foreign holding securities companies, of which 7 are operating in 2020.
to 100%.
Statistics show that Credit Suisse became the controlling shareholder of the securities joint venture after the capital increase transaction was completed last June; On July 13, Morgan Stanley announced that its China securities joint venture, the former Morgan Stanley Huaxin Securities Co., Ltd., was officially renamed Morgan Stanley Securities (China) Co., Ltd.
For example, China’s stocks and bonds are included in the international mainstream index, and the investment limit of QFII and rqfii is cancelled; On the other hand, China has increased the opening-up of the financial industry, such as liberalizing the business scope of joint venture securities companies and canceling the restrictions on the proportion of foreign shares in securities companies, which has cleared the institutional obstacles for foreign securities companies to fully enter China.
and Shanghai Binhe Investment Management Center (limited partnership) all hold 4.9%.
On August 6, JPMorgan announced that JPMorgan securities (China) would become a securities company wholly controlled by foreign capital.
The largest shareholder of the securities firm is DBS Bank, the largest commercial bank in Singapore, with a shareholding ratio of 51%.
The impact of foreign securities companies on domestic securities companies is limited.
From the opening of insurance industry to banks, funds and securities companies, China’s financial market is opening to the outside world more and more.
What challenges will their emergence bring to domestic securities companies in the short term? According to public information, as one of the first batch of newly established foreign holding securities companies, JPMorgan securities (China), established in 2019, invested 408 million yuan in the equity structure of JPMorgan securities (China), with a shareholding ratio of 51%.
With the further promotion of the financial opening-up policy, especially after the CSRC lifted the restrictions on the proportion of foreign shares held by securities companies in April last year, the major foreign giants are actively seeking to expand their business in China and realize holding or setting up new securities companies.
In terms of business environment, according to the ranking of business convenience index released by the world bank in 2020, China’s ranking has risen sharply from 46th to 31st, which provides a good environment for the development of foreign securities companies in China.
On the other hand, domestic leading securities companies have also continued to transform, upgrade and become bigger and stronger in recent years.
They have strong competitiveness in the domestic market in terms of capital scale, customer and business coverage..
The company shall, within 15 days from the date of renewal of its business license, apply to the CSRC for renewal of its securities and futures business license.
In addition, the Shanghai Securities Regulatory Bureau requires the company to complete the industrial and commercial change registration within 6 months from the date of issuance of the reply.
Its business scope includes securities brokerage, securities underwriting and recommendation, and securities self operation, which means that this Japanese holding securities firm has officially expanded its business abroad; On June 30, Credit Suisse announced that its China securities joint venture had been renamed Credit Suisse Securities (China) Co., Ltd.
Foreign securities companies have entered China.
On August 3, the official website of Shanghai Securities Regulatory Bureau issued the reply on Approving the change of business scope of Nomura Oriental International Securities Co., Ltd., which approved the change of business scope of Nomura Oriental International Securities Co., Ltd.
The opening ceremony was held in Shanghai on June 18; On June 10, Daiwa Securities (China) officially obtained the license for operating securities and futures business issued by the CSRC.
holds 14.3%, and Beijing Langxin Investment Co., Ltd., Xinjiang Zhongwei Equity Investment Co., Ltd.
Jamie Dimon, chairman and CEO of JPMorgan, said: “China is one of the biggest opportunities in the world for JPMorgan and many of our customers.
JPMorgan Chase became the first foreign bank to wholly control a Chinese futures company.
holds 20%, Zhuhai mailand Fund Management Co., Ltd.
On the one hand, the capital market is further in line with international standards.
The successive establishment of Shanghai and Beijing Financial courts has helped to create a good financial development environment and promote the prosperity and standardization of the financial market.
The transferee is UBS group.
On July 29, Citibank (China) was approved to officially launch the securities investment fund custody service for public and private funds in China.
For the upcoming wholly-owned brokerage license, Guo Libo, chairman and CEO of JPMorgan Asia Pacific, said that the establishment and operation of a wholly-owned securities company in China is another important milestone in this key market.
Shanghai Waigaoqiao Group Co., Ltd.
Recently, the central bank held a working meeting in the second half of 2021 and proposed to further promote financial opening in an orderly manner.
from 49% to 100%.
On April 3, 2020, Morgan asset management announced that it had preliminarily reached a business consensus with Shanghai International Trust Co., Ltd., the holding company of Shanghai Pudong Development Bank, to acquire the equity of the joint venture Shanghai Investment Morgan Fund Management Co., Ltd.
and increased the business of selling financial products on a commission basis.
In recent years, China has made great progress in financial law enforcement and business environment.
Zhu Baoqin said that in the short term, the impact of foreign securities companies on domestic securities companies is limited.
Under the background of foreign capital entering the bureau one after another, in addition to JPMorgan Chase having obtained the license of wholly-owned securities companies, several foreign securities companies such as Goldman Sachs and Credit Suisse are also actively seeking wholly-owned control, and the fierce market competition in the domestic securities industry will be inevitable.
In addition, China’s financial opening to the outside world continued to advance.
In terms of economic volume, China is the world’s second largest economy, the world’s largest trading country and a major trading partner of more than 120 countries and regions such as the United States, Japan, the European Union and India; From the perspective of capital market, the scale of China’s stock market and bond market is the second in the world, the scale of public funds is the first in the Asia Pacific and the fifth in the world.
Moreover, China’s financial development environment continues to improve.
Talking about the reasons and impact of foreign securities companies entering the Chinese market one after another, Zhu Baoqin, partner of Financial Services Department of Ernst & Young Greater China, said that the attractiveness of China’s economy and capital market continues to improve.
On March 15, 2021, 16% of the equity of UBS Securities was listed and transferred on the official website of the Beijing stock exchange.
According to JPMorgan’s latest confirmation, its shareholding ratio will reach 100%.
The total operating revenue of these 7 companies in 2020 is about 2.5 billion yuan, accounting for about 0.6% of the operating revenue of the whole industry, and some are still in a state of loss, However, this is not only related to the license and shareholding ratio of foreign securities companies in the early stage, but also related to the small scale of capital.
As one of the world’s largest financial services groups, JPMorgan Chase continues to seek a wholly-owned financial license in China.
After the transfer is successful, the equity of UBS Securities held by UBS group will increase to 67%; On June 7, the newly established joint venture securities firm DBS securities also obtained the securities and futures business license issued by the CSRC.
On the one hand, foreign securities companies in China are still in the early stage of development in terms of both quantity and business scale.
From these data, it is not difficult to see that China is a market that foreign securities companies can’t miss and one of the biggest opportunities in the world.
On June 18, 2020, JPMorgan announced that it had obtained the approval of the CSRC to increase its shareholding in JPMorgan Futures Co., Ltd.
As China accelerates the opening of the financial industry, in recent years, a number of foreign financial institutions have entered China, the number of foreign securities companies in the mainland is growing, and a higher level of financial opening based on the negative list is proceeding in an orderly manner.