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Foreign Investors Approved to Hold Controlling Stakes in JV Securities Firms

In a bid to reassure foreign investors that they are now entitled to hold controlling shares instead of minority shares in securities firms on the mainland, the Rules for the Establishment of Securities Companies with Foreign Shares have been revised and renamed as the Administrative Measures for Foreign-Invested Securities Companies.

Issued by the China Securities Regulatory Commission, the change took effect as of 28 April 2018, with a number of amendments enacted on the same date:

  • Foreign investors are officially approved to hold controlling shares in joint venture securities companies.
  • The business scope of joint venture securities companies is to be gradually expanded in line with the new regulations, including approval for all such newly established companies to apply for any securities-related business licence deemed appropriate for their operational remit and resources. The initial remit of any such company, however, must be aligned with the experience of the controlling shareholder or the largest overall shareholder.
  • The cap on foreign ownership in the case of both listed and unlisted securities companies is to be unified. Under the new regulations, the aggregate foreign ownership of any listed domestic securities company must comply with the overall principle of staying within the agreed parameters with regard to the mooted opening-up of the Chinese securities sector.

For further details (in Chinese), please visit the following link:

Administrative Measures for Foreign-Invested Securities Companies

Content provided by Picture: HKTDC Research
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