China May Grant Securities Licences to Two Major Banks – Report

Source: Regulation Asia Editors, Regulation Asia 2020-06-30

At least two major banks are expected to be allowed to conduct investment banking business intially, rather than the full range of securities services.

China is moving to provide securities licenses to commercial banks in a renewed effort to expand banks’ business reach and empower domestic players to compete with global rivals, Caixin has reported.

The CSRC (China Securities Regulatory Commission) will begin granting securities licenses to commercial banks in an attempt to create “aircraft carrier-size” investment banks as China opens up its financial market to foreign firms, introducing new competition in the domestic market.

At least two major commercial banks are likely to be granted securities licences to pilot the policy, allowing them to commence investment banking business rather than a full range of securities services intially.

Traditionally the CSRC has locked almost all domestic commercial banks out of offering securities services on the mainland, though many Chinese banks provide these services overseas via Hong Kong-based subsidiaries.

“The development of high-quality investment banks is needed to implement the State Council’s decision to develop the capital market, and is also an important means to promote and expand direct financing,” said a CSRC spokesperson, in respose to reporters’ questions.

He was unable to provide additional information, saying there are multiple options for implementation which are still under discussion.

commercial banks

China Securities Regulatory Commission

China May Grant Securities Licences to Two Major Banks – Report

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