Caixin
Jun 18, 2021 08:27 PM
FINANCE

Japanese Firm Poised to Open First Fully Foreign-Owned Money Broking Business in China

The Beijing Banking and Insurance Regulatory Bureau announced that Ueda Yagi Money Brokerage (China) Co. Ltd. was approved to open business on June 11. Photo: CCTV.com
The Beijing Banking and Insurance Regulatory Bureau announced that Ueda Yagi Money Brokerage (China) Co. Ltd. was approved to open business on June 11. Photo: CCTV.com

Ueda Yagi Money Broking (China) Co. Ltd. is poised to become the first fully foreign-owned money broker to open its doors for business in China after receiving regulatory approval, in just the latest sign of the further liberalization of the nation’s financial sector.

A wholly owned subsidiary of Tokyo-based money broker Ueda Yagi Tanshi Co. Ltd., the Japanese money broker, received approval to start operations in China, according to an official statement (link in Chinese) issued Wednesday by the Beijing branch of the China Banking and Insurance Regulatory Commission (CBIRC).

Ueda Yagi Money Broking has a registered capital of 60 million yuan ($9.3 billion) and is licensed to provide brokerage services for forex, money market, bond, and derivatives trades between financial institutions, according to the statement.

It is China’s sixth such company (link in Chinese), said the CBIRC branch in a separate statement. The five others are joint ventures between foreign and local companies.

“The setup of the firm will effectively expand the supply of financial services and allow institutions to have more choices and opportunities to participate in market transactions,” said the regulator. “Money brokers … can provide financial institutions with professional and sophisticated brokerage services, and can especially help small and midsize financial institutions expand their access to information, improve their bargaining power, which can facilitate the maintaining of open and transparent financial markets, and improve the efficiency of financial asset allocation.”

Liberalization of this sector was one of 11 measures (link in Chinese) China announced in July 2019 to speed up the opening of its financial sector to foreign companies. The measures also lifted previous caps (link in Chinese) on foreign shareholding in some financial companies earlier than planned, which was originally scheduled for 2021.

Over the past decades, China’s liberalization efforts have attracted some of the world’s biggest interdealer brokers, who have set up joint ventures with local financial powerhouses.

Among them is Tullett Prebon SITICO (China) Ltd., which was the first money broker to open in China. It was set up in 2005 under a pilot scheme and is invested by Shanghai International Trust Co. Ltd. — a unit of Shanghai Pudong Development Bank Co. Ltd. (600000.SH) — and Tullett Prebon (Europe) Ltd.

Contact editor Lin Jinbing (jinbinglin@caixin.com)

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