Brokers allowed to try PE funds
By Chen Li |
March 1, 2011, Tuesday
|
Print Edition
Print Edition
CHINA'S securities regulator has allowed the asset management units of five brokerages to launch private equity funds on trial for the first time.
Beijing-based China Galaxy Securities, CITIC Securities and China International Capital Corp have lined up with Shanghai's Haitong Securities Co and Guotai Junan Securities Co to join the pilot scheme to tap the country's 2.4 trillion yuan (US$365.22 billion) mutual fund industry.
But the funds are allowed to raise capital in yuan only. The brokerages can start the PE business after getting the green light from their company boards and local governments, the Securities Times reported yesterday.
The China Securities Regulatory Commission's approval is expected to lift the revenue of the brokerages as they saw a drastic drop in traditional trading commissions over the years in a sluggish market.
Brokerages now still depend largely on commissions but profits have been declining in the past three years. The commission rate has slumped to 0.11 percent last year from 0.19 percent in 2007, China Securities News said yesterday.
CITIC, CICC and Haitong could previously do PE business using their own capital.
Beijing-based China Galaxy Securities, CITIC Securities and China International Capital Corp have lined up with Shanghai's Haitong Securities Co and Guotai Junan Securities Co to join the pilot scheme to tap the country's 2.4 trillion yuan (US$365.22 billion) mutual fund industry.
But the funds are allowed to raise capital in yuan only. The brokerages can start the PE business after getting the green light from their company boards and local governments, the Securities Times reported yesterday.
The China Securities Regulatory Commission's approval is expected to lift the revenue of the brokerages as they saw a drastic drop in traditional trading commissions over the years in a sluggish market.
Brokerages now still depend largely on commissions but profits have been declining in the past three years. The commission rate has slumped to 0.11 percent last year from 0.19 percent in 2007, China Securities News said yesterday.
CITIC, CICC and Haitong could previously do PE business using their own capital.
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