UBS to Become First Foreign Brokerage to Take Control of China Unit
Zhang Yuanke
DATE:  Dec 03 2018
/ SOURCE:  yicai
UBS to Become First Foreign Brokerage to Take Control of China Unit UBS to Become First Foreign Brokerage to Take Control of China Unit

(Yicai Global) Dec. 3 -- UBS Group, the Swiss multinational investment bank and financial services provider, has received the go-ahead from Chinese authorities to become the first overseas brokerage to gain majority control of a securities joint venture in the country.

UBS will increase the shareholding in its Beijing-based JV to 51 percent from 24.99 percent by buying a 12.01 percent stake from state-owned China Guodian Capital Holdings and 14 percent from China National Cereals, Oils and Foodstuffs, the Basel-based firm said in a statement.

UBS is the first of many global banks, including Goldman Sachs and Nomura, to apply to assume greater control of their JVs after the China Securities Regulatory Commission moved in May to ease ownership limits in 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.

"Growing our China business is key element of our strategy," UBS Chief Executive Sergio Ermotti said in a statement. "The further opening up of China's financial sector represents great opportunities for our wealth management, investment bank and asset management businesses."

The CSRC confirmed the approval in a statement, adding that it will continue to promote the opening-up of the country's capital market and conduct relevant reviews of brokerage firms that want to further develop their local operations.

Foreign brokerages have been reluctant to invest in China, citing a lack of control and stringent management of licenses. They were previously limited to a 49 percent stake.

The country is home to nine securities firms with offshore investors, which have struggled to compete at the highest level because they cannot obtain the funds they need to expand. 

Editor: William Clegg

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Keywords:   UBS AG,CSRC,Securities Joint Venture