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ABN Amro Holdings NV, the biggest Dutch bank, got regulatory approval to set up China's first foreign-invested futures venture with Beijing-based Galaxy Securities Co, an ABN Amro spokeswoman said.
"We were verbally informed, and are still waiting for formal notice," Yuk Min Hui, media manager of ABN Amro's Hong Kong unit said, declining to give further details. Foreign investors can own up to 49 percent of a Chinese futures venture.
The deal allows ABN Amro to tap demand for futures trading in the world's biggest consumer of commodities such as copper and aluminum. Refco Inc, the US futures broker acquired by Man Group Plc, is among other foreign investors that have been seeking ventures in China, where futures trading reached US$1.8 trillion last year.
China in August published new rules that allow foreign brokers registered in Hong Kong or Macao to form ventures with Chinese partners, formalizing deregulation made possible under a trade accord signed between Chinese mainland and Hong Kong in 2004, known as the Closer Economic Partnership Agreement.
ABN Amro and Galaxy, China's biggest brokerage by outlets, signed an agreement to set up the venture last October.
New York-based Refco submitted a proposal to the Chinese Government to set up a venture with Jingyi Futures Co, the nation's sixth-biggest futures broker. The deal is on hold after Refco, which owes creditors about US$16.8 billion, filed for bankruptcy on October 17. Man Group, the world's biggest publicly traded hedge fund, last month bought the customer accounts and assets of Refco's regulated futures business.
Companies with at least 50 million yuan (US$6.2 million) of registered capital that have been in the futures broking business for at least five years and have made profits in the latest two years can apply to form joint-venture brokerages in China, the China Securities Regulatory Commission (CSRC) said on August 26.
(China Daily December 7, 2005)
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