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Securities industry in China is an article on the securities industry in mainland China.


History

*1995, China's first joint venture investment bank –
China International Capital Corp China International Capital Corporation Limited (CICC; 中国国际金融股份有限公司) is a Chinese partially state-owned multinational investment management and financial services company. Founded in China in 1995, CICC provides investment ...
(CICC) was established, shareholders included
Morgan Stanley Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fi ...
International. *March 2002, Changjiang Securities and
BNP Paribas BNP Paribas is a French international banking group, founded in 2000 from the merger between Banque Nationale de Paris (BNP, "National Bank of Paris") and Paribas, formerly known as the Banque de Paris et des Pays-Bas. The full name of the grou ...
signed the Sino-foreign joint venture securities companies’ framework agreement, establishing the first joint-venture securities company after China entered the
WTO The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and e ...
. *June 2002,
China Securities Regulatory Commission The China Securities Regulatory Commission (CSRC) is a government ministry of the State Council of the People's Republic of China (PRC). It is the main regulator of the securities industry in China. History China's first Securities Law was ...
issued the "Establishment of Securities Companies with Foreign Equity Participation Rules", setting the maximum stake at 33% for foreign
joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to access ...
partners. The measure was implemented on July 1, 2002. *2004,
Goldman Sachs Group Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Hong ...
joined with Gao Hua Securities to establish a joint venture Goldman Sachs Gao Hua Securities in order to enter China market. *September 2005,
UBS UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Sw ...
Restructuring of Beijing Securities Project, preparation of
UBS Securities UBS Group AG is a multinational Investment banking, investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres ...
was approved by the State Council. This was the first time for mainland to allow foreign institutions to own the management rights of mainland securities companies. This was also the first case for foreign institute to own the mainland securities license. *September 2006,
China Securities Regulatory Commission The China Securities Regulatory Commission (CSRC) is a government ministry of the State Council of the People's Republic of China (PRC). It is the main regulator of the securities industry in China. History China's first Securities Law was ...
(CSRC) announced a suspension on approval of new securities companies (including foreign-invested securities companies) and commercial offices. *May 2007, in the Second Sino-US Strategic Economic Dialogue (SED), Chinese Government promised to resume approval of new securities companies and declare a gradual expansion in the business scope of joint venture securities companies before the Third
SED sed ("stream editor") is a Unix utility that parses and transforms text, using a simple, compact programming language. It was developed from 1973 to 1974 by Lee E. McMahon of Bell Labs, and is available today for most operating systems. sed w ...
. *December 2007, CSRC announced the resume of approval of Joint-venture securities companies and qualified securities companies can apply to set up. *July 2007, CSRC announced a new regulatory classification base on securities companies risk managing ability and classified them into A (AAA, AA, A), B (BBB, BB, B), C(CCC, CC, C), D and E 11 classes. *December 2007, SCRC started to launch business license management on securities companies which indicate that securities companies’ ability on risk management will directly affect their capability in business scope, especially in the innovation business license *2007, 17 brokerages received A-class rating, in which 2 of them are AA while 15 are A in rating. *July 2008, 31 brokerages received A-class rating, in which 10 of them are AA while 21 are A in rating. *May 26, 2009, CSRC announced a new securities regulatory classification in order to improve the existing classification criteria of securities companies. Under new regulation, 30 brokerages received A-class rating, 58 in B-class rating and 17 in C-class rating. *China's securities companies are facing more fierce competitors from outside investors.
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Hong ...
,
UBS UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Sw ...
and many other international foreign institutions started to set up joint venture securities companies in China.


Regulation

In mainland China, the
China Securities Regulatory Commission The China Securities Regulatory Commission (CSRC) is a government ministry of the State Council of the People's Republic of China (PRC). It is the main regulator of the securities industry in China. History China's first Securities Law was ...
is the primary regulator; however, it has delegated certain activities to a
self-regulatory organization A self-regulatory organization (SRO) is an organization that exercises some degree of regulatory authority over an industry or profession. The regulatory authority could exist in place of government regulation, or applied in addition to governmen ...
called the Securities Association of China (SAC). Mainland China began an IPO sponsor system began in 2004, which is similar to a sponsor system in Hong Kong began in 1999.Changxin G. (2011)
Lack of due diligence makes it difficult for traders to take stock
''Chinadaily''.
In order to be publicly listed in China, a prospective listing firm must be sponsored by a securities company (investment bank) and the sponsor must assign sponsor representatives to the listing firm. This In 2012, the SAC took over registration of sponsor representatives. The exam to become a sponsor representative is extremely difficult, with a one percent passing rate, and sponsor representatives have been highly compensated, with $1 million annual salaries in 2010. Despite this, they are viewed as often ineffective.


Equity share types and foreign investment

Mainland shares are known as A-shares and are not typically available for purchase by foreigners. B-shares are available to foreigners, but are reputed to be more risky as they are available for less desirable companies. H-shares are for mainland China companies which are traded on the
Hong Kong Stock Exchange The Stock Exchange of Hong Kong (SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. As of the end of 2020, it has 2,538 listed companies with a combined market capitalization of HK$47 trillion. It is repor ...
. Institutional investors can apply to become
Qualified Foreign Institutional Investor The Qualified Foreign Institutional Investor () program, one of the first efforts to internationalize the RMB, represents China's effort to allow, on a selective basis, global institutional investors to invest in its RMB denominated capital market ...
s (a program which began in 2002) and then are allowed to buy A-shares; the minimum assets under management was reduced from $5 billion to $500 million in 2012. On 10 November 2017, China allowed foreign participation up to 51% in securities ventures. On March 13, 2020, the Securities Regulatory Commission announced that the restriction on foreign shareholding ratio of securities companies will be abolished from April 1, 2020, and qualified foreign investors may submit applications for the establishment of securities companies or change of the actual controller of the companies in accordance with the requirements of laws and regulations, relevant regulations of the SFC and relevant service guidelines in accordance with the law. In the presence of the huge Chinese market, foreign-owned brokerage firms are coming in drove


Securities companies classification

The
China Securities Regulatory Commission The China Securities Regulatory Commission (CSRC) is a government ministry of the State Council of the People's Republic of China (PRC). It is the main regulator of the securities industry in China. History China's first Securities Law was ...
in 2021 has classified securities companies as the following:


AA

* China International Capital Corporation, CICC *
China Galaxy Securities China Galaxy Securities Co., Ltd. () is a Chinese brokerage and investment bank. It raised US$1.1 billion on the Stock Exchange of Hong Kong in its debut in May 2013. In January 2015, the company announced plans to issue new shares worth US$2.3 ...
* China Merchants Securities *
CITIC Securities CITIC Securities Co., Ltd. is a Chinese full-service investment bank. It offers services in underwriting, research, brokerage, asset management, wealth management, and investment advisory. CITIC Securities was established in 1995 and it is ...
*
CSC Financial CSC Financial Co., Ltd. trading as China Securities, is a Chinese investment bank and brokerage firm established by CITIC Securities and China Jianyin Investment in 2005 in a 60–40 ratio, as a successor of bankrupted China Securities Co., Lt ...
* Essence Securities *
Everbright Securities Everbright Securities Company Limited is a securities brokerage by assets in China, controlled by state-owned financial conglomerate, China Everbright Group. It was founded in 1996 and is based in Shanghai. It was listed on the Shanghai Sto ...
*
GF Securities GF Securities ()is a securities firm in China which engages in the operation of large-scale comprehensive securities broking and trading services. The company was founded in 1991 and is headquartered in Guangzhou, China. History The securities ...
* Guosen Securities * Guotai Junan *
Huatai Securities Huatai Securities () is a securities firm in China which engages in the operation of large-scale comprehensive securities broking and trading services. The company was founded in 1991 and is headquartered in Nanjing, China. History Huatai Sec ...
* Industrial Securities *
Orient Securities Orient Securities Co., Ltd. also known as DFZQ is a Chinese investment bank and brokerage firm headquartered in Shanghai. Orient Securities is a constituent of SSE 50 Index, the blue chip index of Shanghai Stock Exchange. It provided services i ...
* Ping An Securities *
Shenwan Hongyuan Shenwan Hongyuan () is a securities brokerage company in China which engages in the operation of large-scale comprehensive securities broking and trading services. The company was founded in 1996 and is headquartered in Xinjiang, China. History ...


A

* AVIC Securities * BOC International * Beijing Gaohua * Caida Securities * Caitong Securities * Capital Securities * CDB Securities * Changjiang Securities * Credit Suisse Founder * Dongguan Securities *
Dongxing Securities Dongxing Securities Co., Ltd. is a Chinese investment bank and brokerage firm. The firm was a constituent of SSE 50 Index (since 28 November 2016) and CSI 100 Index.
* Eastern Fortune * Founder Securities * Great Wall Securities * Guoyuan Securities * Huaan Securities * Huachuang Securities * Hualin Securities * Huaxin Securities * Minmetals Securities * Nanjing Securities * Open Source Securities * Shanxi Securities * Sinolink Securities * Soochow Securities * Southwest Securities * Tianfeng Securities * Tokai Securities *
UBS Securities, China Branch UBS Securities Co., Ltd. is the investment bank and brokerage firm of the Swiss bank UBS with offices in many countries, amont the China. Its Chinese arm is a joint-venture according to the restrictions of foreign investments in China, especially ...
* Warburg Securities * West China Securities * Western Securities * Zheshang Securities * Zhongtai Securities * Zhongtian Guofu


BBB

* Bohai Securities * Caixin Securities * Central China Securities * Cinda Securities * Fed Securities * Gold Dollar Securities * Goldman Sachs Gao Hua * Great Wall Guorui * Guohai Securities *
Haitong Securities Haitong Securities is a securities firm in China, providing services in stocks and futures brokerage, as well as investment banking, corporate finance, M&A, asset management, mutual fund, and private equity. Haitong was listed on the Shangha ...
* HSBC Qianhai * Huajin Securities * Hualong Securities * Huaxing Securities * Morgan Stanley Huaxin * Northeast Securities * Shengang Securities * Zhongtian Securities


BB

* Century Securities * Datong Securities * East Asia Qianhai * First Capital Securities * Guolian Securities * Guorong Securities * Hongta Securities * Huafu Securities * Intime Securities * Kyushu Securities * Minsheng Securities * Wanlian Securities * Xiangcai Securities * Yingda Securities * Yongxing Securities * Yuekai Securities


CCC

* Aijian Securities * Chase Securities * China Post Securities * Guosheng Securities * Hengtai Securities * Horizon Securities * Huarong Securities * Jianghai Securities * New Era Securities * Pacific Securities * Zhongshan Securities


CC

* Guodu Securities


C

* Chuancai Securities


D

* N-Securities


Rankings

Data as of March 31, 2017 Source:
S&P Global S&P Global Inc. (prior to April 2016 McGraw Hill Financial, Inc., and prior to 2013 The McGraw–Hill Companies, Inc.) is an American publicly traded corporation headquartered in Manhattan, New York City. Its primary areas of business are financ ...


References

{{Reflist, 2


External links


Securities Industry in China: Finding the bullBloomberg.comSac.netSac.net.cn
Securities (finance) Industry in China Finance in China