Nov 22, 2019 08:41 PM

Nomura Securities Venture Wins First License to Do Business in China

Nomura Holdings Inc. building in the Shinjuku district of Tokyo. Photo: IC Photo
Nomura Holdings Inc. building in the Shinjuku district of Tokyo. Photo: IC Photo

Japanese financial titan Nomura Holdings Inc.’s majority-owned securities joint venture in China has obtained a securities business license from the country’s securities regulator, allowing it to officially conduct business in the world’s second largest economy.

The license, which is the first securities business license issued to a foreign-controlled securities joint venture on the Chinese mainland, comes almost eight months after Nomura received approval to set up the venture. It marks the latest development in China’s broader drive to grant foreign investors wider access to its financial markets.

The license from the China Securities Regulatory Commission (CSRC) enables Nomura Orient International Securities to operate four businesses — brokerage, investment consulting, proprietary trading, and asset management, Nomura said in a press release on Friday.

“Nomura aims to leverage its global expertise to provide clients with diverse investment products and services for the Chinese market,” the biggest brokerage and investment bank in Japan said, adding that it aims to grow the joint venture into a full-fledged brokerage.

Former Chinese official Yu Qing, who worked at the Ministry of Finance for 20 years dating back to 1989, is set to be Nomura Orient’s chairperson, according to an August CSRC document (link in Chinese). Previously, she was vice president and chief financial officer of Hong Kong-listed China Reinsurance (Group) Corp., the country’s only state-owned reinsurance group.

In April 2018, the CSRC issued rules raising the ceiling on foreign ownership of Chinese mainland-based securities firms to 51% from the previous 49%. In late March this year, Nomura received a green light from the regulator to set up Nomura Orient, in which it holds a 51% stake. Two Shanghai-based state-owned enterprises hold the remainder (link in Chinese).

Several other global financial giants have also won approval to control securities firms on the mainland, including Swiss financial giant UBS Group AG, and U.S.-based JPMorgan Chase & Co. So far, neither of the two has received a securities business license.

Other firms seeking approval to control securities ventures include Swiss conglomerate Credit Suisse Group AG, American investment bank Morgan Stanley, and Daiwa Securities Group Inc., Japan’s second-largest brokerage by assets.

China previously capped foreign ownership in a bid to protect comparatively young domestic financial firms, but after years of development, the time is ripe to loosen restrictions and create a more level playing field for foreign investors, industry insiders told Caixin.

In July, Chinese Premier Li Keqiang said the country will abolish caps on foreign ownership of securities, futures and life insurance firms in 2020, one year earlier than planned.

For foreign investors operating in China, one of the foremost challenges is strictly following the country’s regulations. Everything needs to be locally tailored, including risk control, compliance and network security, Clare Zhao, general manager of Vanguard Investment Management (Shanghai) Ltd., mutual fund giant Vanguard Group Inc.’s wholly-owned China subsidiary, recently said at an industry event.

 Read more 
In Depth: Despite Financial Opening-Up, Foreign Firms Still Face Challenges in China

Data security is a major concern, an overseas financial firm staffer told Caixin, elaborating that all the data and information they collect on the Chinese mainland must be physically stored on the mainland according to the country’s Cybersecurity Law, which could pose numerous issues when they try to share the data with overseas colleagues.

Quan Yue and Thomas Zhang contributed to this report.

Contact reporter Lin Jinbing (

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