China said yesterday it has suspended approvals for new domestic and foreign-invested security brokerages, a blow to overseas firms looking to get in on the booming Chinese markets.
The securities regulator said it would also suspend expansion of domestic brokerages and would not issue new licenses, according to a statement carried in the official Shanghai Securities Journal.
The China Securities Regulatory Commission, or CSRC, said exceptions would be made only for deals judged to be capable of reducing risk.
The move appeared to reverse for now plans by Beijing to draw on foreign investor capital and management expertise to help clean house in a sector plagued for years by corruption, poor management and heavy losses.
Speaking at a forum in Beijing, the head of the CSRC Shang Fulin (
"By the end of October next year, everything can be completed and then we can run the pilot project for joint venture securities institutions," Shang said.
The announcement would seem to scuttle foreign securities dealers' ambitions to buy into domestic brokerages -- plans that had already been thwarted by regulatory resistance.
Swiss investment bank UBS has secured preliminary approval from the CSRC for its 1.7 billion yuan (US$214 million) purchase of a 20 percent stake in Beijing Securities but it has not yet gained final clearance.
CLSA, the Asian investment banking arm of French bank Credit Agricole, was seeking to set up brokering operations in China by buying into an existing domestic player but never won final approval.
Regulators argued yesterday that the temporary suspension was aimed at strengthening domestic brokerages as part of program that seeks to better control the financially unruly sector.
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