Foreign investment banks will be able to establish joint ventures with securities firms in China by the end of the year, the Financial Times reported yesterday.
The policy follows China's promise at the last round of strategic economic talks with the US in May to implement the change amid foreign frustration at being effectively shut out of China's booming stock markets.
Chinese authorities will launch a pilot program permitting a few overseas firms to take 20 percent stakes in existing domestic brokerages, the newspaper reported, citing senior government officials and banking executives.
Under the revised regulations, foreign investment banks would be allowed to own up to 33 percent of a new securities joint venture with a local partner, officials said.
China said last year that approvals for new domestic and foreign-invested brokerages had been suspended to allow the troubled industry time to prepare for overseas competition.
But China agreed to remove barriers on the entry of new foreign securities firms and resume licensing securities companies, including joint ventures, in the second half of this year.
The head of China Securities Regulatory Commission, Shang Fulin (尚福林), said last September that the brokerage issue would only be looked at again after China completed its overhaul of the industry.
"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 at the time.
However an official at the China Securities Regulatory Commission said yesterday there was no timetable for the release of the rules.
One sign that firms had been made aware that changes were imminent was a state press report last month that identified Credit Suisse and Citigroup as vying for a joint venture with China's Founder Securities.
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