China is moving to provide securities licenses to commercial banks in a renewed effort to expand banks’ business reach and empower domestic players to compete with global rivals, reported Caixin.
China’s top securities watchdog will begin granting securities licenses to commercial banks, Caixin sources said, in a move to create “aircraft carrier-size” investment banks amid the opening-up of China’s financial market to foreign firms.
At least two major commercial banks are likely to be granted securities licenses initially to pilot the policy, starting with investment banking business rather than a full range of securities services, which include brokerage, proprietary, underwriting and sponsorship, and margin-financing and securities-lending services, the sources said.
This could mark a significant change in China Securities Regulatory Commission policy, which currently locks almost all domestic commercial banks out of offering securities services on the Chinese mainland. Presently, many Chinese banks provide these services overseas via Hong Kong-based subsidiaries.