(Yicai Global) May 3 -- Swiss investment bank UBS Group AG has become the first foreign financial institution to apply to take control of its securities firm on the Chinese mainland as the region looks to open up the sector to overseas companies.
The Basel-based institution is looking to increase its stake to 51 percent from just under 25 percent, state-owned news agency Xinhua reported. The China Securities Regulatory Commission has accepted and is processing the application.
UBS is the first of what may be several overseas banks looking to assume greater control of their China venture after the CSRC moved to ease ownership restrictions limiting the country’s CNY253-trillion (USD40-trillion) financial sector. The change comes as part of President Xi Jinping’s pledge to “significantly broaden” market access in the world’s second-largest economy.
Foreign brokerages have been reluctant to invest in China, and the ones who have complain about the lack of control and stringent license management. China has nine securities companies with offshore investors, including Goldman Sachs Group Inc., Credit Suisse Group AG, and Morgan Stanley, and these firms struggle to compete at the highest level because they cannot obtain the funds they need to expand. Among them, only HSBC Qianhai Securities Ltd., formed at the end of last year, has a foreign investment of more than 50 percent.
Editor: James Boynton