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China allows brokers to launch PE funds
By Lydia Chen |
February 28, 2011, Monday
|
Online Edition
Online Edition
CHINA'S securities supervisor has allowed asset management units of five brokerages to launch private equity funds on a trial run basis for the first time.
The move is expected to lift brokerages' incomes as traditional trading commissions fell sharply over the years in a sloppy market while competition in the industry is getting fiercer.
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, which aims to help brokerages transform their business model to be more international.
But the funds are allowed to raise capital in Chinese yuan only. The business can start after the brokerages get green lights from company boards and provincial governments, Securities Times reported today.
Previously, CITIC, CICC and Haitong have been allowed to conduct private equity business using their own capital.
Guotai Junan also has set up its own asset management unit, hoping to grab a place in the competition with bigger mutual funds to attract wealthy Chinese investors.
The move is expected to lift brokerages' incomes as traditional trading commissions fell sharply over the years in a sloppy market while competition in the industry is getting fiercer.
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, which aims to help brokerages transform their business model to be more international.
But the funds are allowed to raise capital in Chinese yuan only. The business can start after the brokerages get green lights from company boards and provincial governments, Securities Times reported today.
Previously, CITIC, CICC and Haitong have been allowed to conduct private equity business using their own capital.
Guotai Junan also has set up its own asset management unit, hoping to grab a place in the competition with bigger mutual funds to attract wealthy Chinese investors.
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