China resumes establishment approval for domestically funded securities firms

Source: Xinhua| 2019-07-07 10:58:02|Editor: Liangyu
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BEIJING, July 7 (Xinhua) -- The China Securities Regulatory Commission (CSRC) has resumed requiring approvals for the establishment of domestically funded securities companies.

The CSRC released a set of new rules including dividing brokerages into two groups, professional securities firms and comprehensive securities firms, based on the complexity of their business.

The regulator will apply close oversight of shareholders' background and sources of funds used to establish securities firms.

The comprehensive securities firms are granted a five-year transitional period. It shall not continue to carry out high-risk businesses such as stock option market making and over-the-counter derivatives if it would fail to meet the requirements after the period.

The resumed approval is aimed at introducing more high-quality domestic investors into the securities market and promoting healthy market competition, according to Chang Depeng, a spokesperson with the CSRC.

To boost financial opening-up, China unveiled 11 measures last year, including allowing foreign firms to have 51-percent ownership of their brokerage ventures, up from the previous 49 percent.