(Yicai) Feb. 13 -- Several Chinese mainland securities firms have been approved to accelerate the expansion of their overseas operations since the start of this year, including setting up new offshore subsidiaries or injecting capital into existing ones.

Northeast Securities has been given the green light from the China Securities Regulatory Commission to establish a Hong Kong unit with HKD500 million (USD64 million) of its own funds, the Changchun-based brokerage announced on Feb. 11. This will be its first overseas business.

On the same day, Hefei-based Huaan Securities said that the CSRC has approved its plan to pour HKD500 million into its Hong Kong subsidiary, set up in 2020. The unit holds securities trading, futures trading, securities investment consulting, and asset management licenses.

In addition, Huatai Securities completed the issuance of HKD10 billion (USD1.3 billion) worth of zero-coupon convertible bonds, which will be listed on the Vienna MTF, a multilateral trading facility operating on the Vienna Stock Exchange, the Nanjing-based company also announced on Feb. 11, adding that the proceeds will be used to support the development of its overseas business and to supplement working capital.

On Jan. 7, GF Securities said that it will raise over HKD6 billion (USD767.7 million) through rights issues and issuing convertible bonds. The funds will be used to inject capital into the Guangzhou-based firm's overseas units, boosting its international business.

The Hong Kong Stock Exchange ranked first globally by initial public offering proceeds last year, boosted by the surge of mainland companies going public there, which further prompted such firms to speed their expansion into the market. Last year, more than 10 mainland securities firms announced plans to establish subsidiaries in the city or increase the capital of existing ones.

The advantages of leading securities firms are becoming more evident compared to smaller and medium-sized enterprises amid the overall industry accelerating its overseas expansion.

The top 10 Chinese securities firms by amount of IPO underwriting on the Hong Kong bourse included China International Capital Corporation, Citic Securities, and Huatai Securities last year, collectively accounting for about 54 percent of the market share, with CICC alone making up 24 percent, according to data from Wind Information. In comparison, some smaller securities companies had a market share of less than 1 percent.

Many small and medium-sized securities firms have limited actual business operations despite having established the structure of their Hong Kong subsidiaries, a non-bank financial industry analyst told Yicai. They are mainly constrained by insufficient capital, weaker attractiveness to overseas talent, and a lack of accumulated cross-border resources, the person added.

Small and medium-sized securities companies should adopt different strategies compared to leading firms when expanding overseas, Yu Fenghui, a senior researcher at Pangoal Institution, said to Yicai. For example, they can focus on specific regional markets or niche industries to conduct investment banking activities or offer distinctive financial products and services to create differentiated competitive advantages, Yu pointed out.

Editors: Dou Shicong, Martin Kadiev