China: 1st Brokerage JV Approved Under CEPA
China’s securities regulator has approved a brokerage JV (joint venture) between the Mainland and Hong Kong investors, the 1st under the Closer Economic Partnership Arrangement (CEPA) between the Mainland and Hong Kong.
With a registered capital of RMB 3.5-B (US$540), the JV will be set up in Shanghai pilot FTZ (free trade zone) and offer standard brokerage services, Deng Ge, spokesman for China Securities Regulatory Commission (CSRC), said at a press conference on Friday.
The JV will have 6 months to register with regulatory authorities before starting operation, according to a document posted on the CSRC website.
3 Hong Kong investors will have a combined stake of 34.85% in the new company while 11 Mainland investors will take the remaining 65.15%, according to the agreement.
CEPA allows Hong Kong or Macao funded financial institutions to set up one brokerage JV in each of Guangdong, Shanghai and Shenzhen with a maximum stake of 51%. They can also set up 1 brokerage JV in each of the Mainland’s reform pilot zones with a maximum shareholding of 49%.
Have a terrific weekend.
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Paul Ebeling
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