Mar 20, 2021 07:57 AM

China Relaxes Requirements on Major Brokerage Shareholders

What’s new: China’s securities regulator relaxed qualification requirements for major shareholders of securities companies, making it easier to invest in the industry.

The China Securities Regulatory Commission (CSRC) issued revised rules Friday regulating securities companies’ equity management, lowering the threshold for investing in brokerage businesses while broadening the definition of major shareholders.

Under the new rules, which take effect April 18, “major shareholders” of securities businesses would no longer be required to be industry leaders, have experience in related financial business or maintain sustained profitability for the past three consecutive years. They would need to have net assets of “no less than 50 million yuan ($7 million),” adjusted down from “no less than 200 million yuan.”

More to know: While lowering the barriers to buying into securities companies, the new rules also broadened the definition of “major shareholders.” Such shareholders of brokerages would include any entity that holds at least 5% of the equity in a securities company, revised from “shareholders who hold at least 25% of equity in a securities firm or the largest shareholder who holds at least 5% of equity.”

The changes were made in response to the changing reality that shareholding structures are becoming more dispersed in many brokerages. The new rules are expected to benefit small and midsize securities companies, easing their access to outside investment, analysts said.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Han Wei ( and editor Bob Simison (

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