The Securities And Futures Commission Has Cancelled The Foreign Capital Shares Of The Securities Firms And Other Institutions Earlier Than The Restrictions, And Increased The Speed Of Introducing Foreign Capital Into The Domestic Market.

The opening of the capital market to meet the milestone event again, the eleven regular session of the first SFC after the long holiday, Gao Li, spokesman, announced that the SFC would implement the Futures Company, fund management companies and foreign shareholding ratio of securities companies in 2020.

Judging from the past development process of joint venture financial institutions, the entry of foreign institutions without shareholding ratio is a huge step forward in the opening up of domestic capital market, which will have a far-reaching impact on the development of domestic capital market from a short to medium term.

"The pattern of opening up the capital market has been going through many years of rapid progress in the past two years. On the one hand, it is the need of the big situation. On the other hand, the domestic market also needs the genuine foreign investment agencies to participate in the market competition and promote the rapid development of domestic institutions. From the previous experience, the proportion of holding shares is a very big obstacle for these joint ventures, causing a lot of internal problems in the joint venture. However, the complete liberalization of the share ratio means that the era of substantive competition for foreign capital in the domestic capital market is coming." The head of a joint venture brokerage company in Beijing area pointed out that

Liberalization of foreign shareholding ratio

The speed of capital market opening to the outside world exceeds the expectation of the market, and foreign capital organizations have only been in a short span of several years from joint ventures, uncontrolled holdings to the release of holding restrictions, and now the liberalization of shareholding ratio.

In 2018, China announced that the proportion of foreign investment in joint venture securities, fund management and Futures Company will be relaxed to 51%, and no restrictions will be imposed after three years. At present, the policy that foreign capital shares have been relaxed to 51% has fallen to the ground. In 2018, the SFC issued the management regulations for the management of foreign investment securities companies and the management measures of foreign investment Futures Company.

At the summer meeting of Davos in 2019, China announced again that it would fully liberalize the financial industry shares in a year ahead of schedule and speed up the full opening of the financial sector. That is to say, next year, that is, 2020, one year ahead of schedule, the ratio of foreign securities, futures and life insurance stocks will be abolished.

In July 20th, the office of the financial stability and Development Commission of the State Council announced a series of policy measures to further open the financial industry to the above contents. In the 11 opening measures of the financial industry, it clearly proposed that the time limit for the cancellation of the ratio of securities companies, fund management companies and foreign capital stocks of Futures Company to 2021 should be advanced to 2020.

Now, the securities and Futures Commission has formally implemented the liberalization of the foreign shareholding ratio of Futures Company, fund companies and securities companies. It is clear that the above three kinds of agencies will complete the deregulation of foreign ownership restrictions in January 2020, April 2020 and December 2020 respectively.

In this regard, the relevant responsible persons of the securities and Futures Commission pointed out: "it is an important measure for the SFC to conscientiously implement the decision making arrangements for the Central Committee and the State Council to deepen the structural reform of the financial supply side and expand the opening up of the financial industry in advance of 2020." it is in line with the objective requirements of the capital market and industry to promote reform and promote development by opening up to the outside world, reflecting the determination and confidence of our country to unswervingly deepen reform and opening up to the outside world in 2020. After nearly thirty years of development, China's securities, funds and futures industry has made great progress. Through expanding industry openness, encouraging healthy competition and continuously enhancing strength, it is conducive to creating a good market ecosystem and business environment and promoting the level of service in the industry.

"The financial stability and Development Committee of the State Council declared that it should be fast and slow, and sooner rather than later," which indicates that the current domestic capital market has the conditions to release the shareholding ratio to foreign institutions, and the sooner the better. The experience of many markets has proved that liberalization is an important step to go out. The introduction of foreign investment institutions by regulators to strengthen competition and enrich the diversity of industries can, to a large extent, speed up the pace of internationalization of domestic institutions. Ze Hao investment partner Cao Gang thinks.

From the point of time, the restrictions on foreign shareholding Futures Company will be released soon. The SFC also made it clear at the October 11th press conference that from January 1, 2020 onwards, the relevant subjects may submit an application for administrative license to me according to the relevant provisions of the "Futures Trading Management Ordinance", "Futures Company supervision and management measures" and "foreign investment Futures Company management measures", etc. the qualified foreign investors can hold a shareholding ratio of 100%, and the SFC will examine and approve the regulation in accordance with the law.

However, reviewing the current progress of the opening up of financial institutions in the capital market is only the fastest progress of brokers. As of October 11th, 3 foreign controlled brokerages have emerged. Among them, UBS has been transformed into a foreign holding brokerage firm for stock joint venture brokerages. The remaining two Morgan chase securities (China) Co., Ltd. (hereinafter referred to as "Morgan chase securities") and Nomura Orient International Securities Co., Ltd. (hereinafter referred to as Nomura Orient) are approved by the securities and Futures Commission at the beginning of this year.

However, only one of the public funds has been invested in Morgan to become a foreign holding institution. Futures Company has yet to have an absolute foreign holding institution. However, with the liberalization of shareholding ratio and the continued support of the capital market's opening up policy, foreign institutions will begin to try to hold the public offering fund and Futures Company.

Fourth quarter, there is also a gift package.

It is the first package to open up the capital market in the fourth quarter of the year, and the chairman of the SFC will easily put forward nine measures to implement the opening of the capital market in the middle of this year. At present, some of them have already landed, so the market expects some of the remaining initiatives to be released in the fourth quarter.

According to the reporters' combing, the nine measures are mainly divided into four major aspects, namely, overseas investors, institution licensing, products and H-share reform.

The reforms involving foreign investors include the following: promoting the revision of the QFII/RQFII system rules, further facilitating the participation of foreign institutional investors in China's capital market; taking appropriate account of the scale and business experience of foreign banks' parent banks, relaxing the access restrictions of foreign banks engaging in securities investment trusteeship business in China, expanding the opening of the exchange bond market, expanding the channels for foreign institutional investors to enter the stock exchange bond market, and liberating the private equity products managed by foreign private equity investment fund managers to participate in the restrictions of "Shanghai Hong Kong Tong" and "Shenzhen Hong Kong Tong" exchange.

The market believes that if the above policies can be successfully landed, it will greatly broaden the investment channels for overseas investors in the domestic market and reduce investment restrictions. For example, in the introduction of foreign investors' access to the exchange bond market, the head of the relevant department of the securities and Futures Commission told reporters that the entry of foreign investors into the supervision of the exchange bond market takes into account three ways: "first, the bond index can be added to the Shanghai Shenzhen Hong Kong Tong pass, and the second is to launch debt securities in the exchange market, and the third is to consider the three modes of qualified foreign investors entering the market directly to meet the requirements."

It is worth noting that the majority of the above measures have not yet come to the ground. Therefore, the four quarter's involvement in the opening up of investors will be the focus of the market, and the introduction of foreign capital into the domestic market is also the theme of the year's opening up throughout the year.

The second is the reform of institutional license, including the principle of consistency between domestic and foreign capital, allowing the foreign shareholders of joint venture securities and fund management companies to achieve "one reference and one control", and rationally setting up the qualification requirements of comprehensive securities company controlling shareholders, especially the requirements of net assets, etc.

In addition to the two items mentioned above, the reporter has learned that the opening of product category includes: continuously increasing the opening of the futures market and expanding the scope of the specific varieties; studying and formulating the management method of the panda debt, and facilitating the offshore institutions issuing bond financing. At present, such initiatives continue to be in the process of landing, and they are also open packages that can be expected in the fourth quarter.