China eased some of its restrictions on foreign participation in
domestic securities companies in a revised regulation published on
Friday.
The move honored a pledge made during a high-profile dialogue
with the United States that concluded earlier this month.
The revised regulation allowed more foreign companies access to
Chinese securities companies. They would be able to do so via more
varied channels, said a China Securities Regulatory Commission
(CSRC) official.
The new rule expanded foreign investors from securities
companies alone, stipulated in the previous 2002 rule, to all
financial institutions and common institutional investors.
Qualified investors would have to be in operation for five
consecutive years, against the previously demanded 10 year
minimum.
At least 30 employees of foreign investors were required to have
the license to be engaged in a securities business, down from the
previous 50.
For joint-venture securities companies, however, the maximum
shares held by overseas investors was maintained and still capped
below 33 percent.
Overseas investors could either hold shares of listed domestic
securities companies via securities trading on the stock exchange
or establish strategic cooperation with a Chinese partner to become
its shareholder, the new regulation said.
The new regulation also outlined the regulatory supervision of
such foreign participation.
Foreign investors would have to report the share purchase and
suspend share trading if they wanted to buy a five percent stake or
higher in a Chinese securities company. The CSRC would decide
whether the related foreign investors were qualified
shareholders.
Foreign investors would also need CSRC approval if they wanted
to become the shareholder of a Chinese company as its strategic
partner.
The new rule said shares held by an individual foreign investor
in a listed Chinese company would be kept below 20 percent.
Overseas investors as a whole were restricted to a combined maximum
25 percent.
(Xinhua News Agency December 29, 2007)