Securities Markets Become More Open
Clouse, Thomas, Global Finance
China will allow foreign brokerage firms to play stronger roles in the country's securities markets, according to new guidelines that took effect at the beginning of the year. Security firm joint ventures can now sponsor and underwrite stock and bond offerings, the rules said. However, foreign firms can still own only up to one-third of joint-venture brokerage firms, and those joint-venture companies are prevented from trading domestic A-shares. Foreignen can also buy strategic stakes in listed Chinese brokerages, which have more freedom to trade than joint-venture companies. These stakes are capped at 20% for one firm, however, and total foreign ownership is limited to 25%.
China Investment Corp., the investment fund formed to manage a portion of China's foreign exchange reserves, announced in December that it would invest $5 billion for a 9.9% stake in US investment bank Morgan Stanley. The deal marks the third major investment for China Investment Corp., formed in September of last year, which already owns stakes in US-based private equity company Blackstone and China Railway Group, listed in Hong Kong. …