China’s securities watchdog is looking to relax qualification requirements for major shareholders of securities firms, lowering the threshold for investment, reported Caixin.
On Friday evening, the China Securities Regulatory Commission (CSRC) published a set of draft amendments to regulations on securities companies’ shareholding, relaxing requirements for their “major shareholders.”
Under the new draft rules, “major shareholders” would include anybody that holds at least 5% of the equity in a securities firm, revised from “shareholders who hold at least 25% of equity in a securities firm or the largest shareholder who holds at least 5% of equity.”
Despite broadening the definition of major shareholders, the CSRC plans to significantly lower barriers to buy into securities firms, lowering or removing a number of requirements for such major shareholders. They would be no longer be required to be industry leaders, have experience in related finance business, or maintain sustained profitability for the past three consecutive years. They would need to have net assets of “no less than RMB 50 million ($7 million),” adjusted down from “no less than RMB 200 million.”