FINANCE

Citadel Files Application for Foreign-Owned China Brokerage After Short Delay

Published: Jan. 18, 2025 3:47 a.m. GMT+8

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A monitor displays signage for Citadel Securities LLC on the floor of the New York Stock Exchange in New York on March 27, 2017. Photo: Bloomberg

Citadel Securities’ application to establish a wholly foreign-owned brokerage in Shanghai was received by China’s securities regulator on Friday, marking a delayed step in the American market maker’s plans to expand its specialized services in China’s financial market.

Citadel Securities intended to submit the application in late 2024 but faced delays due to the complexity of preparatory work.

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Citadel Securities applied to establish a wholly foreign-owned brokerage in Shanghai, delayed from a planned late 2024 application.
China’s securities regulator takes up to six months for application decisions; Mizuho Securities' similar application shows the lengthy process.
Citadel aims for a niche focus on institutional clients in China, not retail, pursuing specialized licenses with Tang Xiaodong leading efforts.

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Who’s Who

Citadel Securities: Citadel Securities, led by Kennith Griffin, seeks to expand in China by establishing a wholly-owned brokerage in Shanghai. Delayed in its application due to complexity, the firm focuses on institutional clients, excluding retail brokerage. Tang Xiaodong, an expert with extensive CSRC experience, leads the licensing process. Citadel aims for niche operations and leverages Zhao Peng's expertise in the region. They obtained Qualified Foreign Institutional Investor status in 2023, participating in the A-share market.

Mizuho Securities: Mizuho Securities submitted its application for a wholly foreign-owned brokerage in China in November 2023. The process showed the lengthy nature of approvals; their application wasn't formally accepted until June 2024, with rectification feedback issued in September.

UBS: UBS, following its merger with Credit Suisse, has a securities venture in the Chinese mainland. Due to regulations preventing it from holding two licenses, UBS was required to divest one. Citadel Securities attempted to acquire Credit Suisse's China joint venture but was outbid by a Beijing-backed fund.

Credit Suisse: Citadel Securities sought to acquire Credit Suisse’s China joint venture following its merger with UBS. However, due to regulations requiring UBS to divest one of its licenses in China, Citadel was outbid by a Beijing-backed fund for the joint venture.

Citadel Group: Citadel Group, founded by Ken Griffin, oversees two main businesses: Citadel Investment, a hedge fund managing $64 billion, and Citadel Securities. Griffin, an advocate for enhanced U.S.-China relations, aims to expand Citadel Securities in China. The group employs over 400 staff in Asia, with Hong Kong as the largest regional office, and is committed to recruiting top global talent, viewing China as a crucial source.

Citadel Investment: Citadel Investment is one of two core businesses overseen by Citadel Group’s founder, Kennith Griffin. It is a hedge fund managing $64 billion. Griffin emphasizes expanding the company's footprint in mainland China and is a vocal supporter of improved U.S.-China relations.

BlackRock: The article mentions that Tang Xiaodong, the individual leading Citadel Securities' licensing process in China, previously held the position of China head at BlackRock.

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What Happened When

By November 2023：: Mizuho Securities submitted its application to establish a wholly foreign-owned brokerage in China.

June 2024：: Mizuho Securities' application was formally accepted by the CSRC.

August 2024：: Kennith Griffin and Zhao Peng funded the renovation of the San Diego Zoo's 'Panda Ridge.'

September 2024：: Feedback was issued for Mizuho Securities' application by the CSRC.

Before late 2024：: Citadel Securities intended to submit the application to establish a wholly foreign-owned brokerage in Shanghai.

Friday before 2025：: Citadel Securities' application to establish a wholly foreign-owned brokerage in Shanghai was received by China's securities regulator.

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