Standard Chartered Bank (Hong Kong) Limited has been granted in-principle approval by the China Securities Regulatory Commission (CSRC) to set up a securities firm in Mainland China.
With an initial capital injection of RMB 1.05 billion (US$155.6 million), the new firm, Standard Chartered Securities (China) Limited, will cover underwriting, asset management — restricted to asset-backed securities only — own-account trading and brokerage activities.
The move is set to play a key role in Standard Chartered Group’s business strategy in China. Based in Beijing, the new firm will provide products and services related to China’s onshore capital markets for onshore and offshore clients.
Standard Chartered says this is the first time the CSRC has granted in-principle approval for the set-up of a securities firm wholly owned by a foreign shareholder via greenfield investment in its onshore market, since the lifting of ownership restrictions for foreign financial institutions in 2020.
The bank will appoint John Tan, head of financial markets, Asia at Standard Chartered, as chairman-designate of the new securities firm, and Grace Geng as CEO-designate.
In February 2022, Standard Chartered announced that it will invest US$300 million in China-related businesses over the next three years, aiming to help clients capture opportunities brought by China’s continuous opening up.
Commenting on the milestone, CEO of Asia, Standard Chartered Benjamin Hung says: “We are confident of the continued opening of financial markets in China and are very positive about the country’s development prospects.
“In particular, the promising investment value of the onshore capital markets and the growing attractiveness of Renminbi assets in offshore markets. This is another major milestone for our China franchise, one we remain very committed to.”
Jerry Zhang, executive vice chairman and CEO of China, and Cluster CEO (China and Japan), Standard Chartered, adds: “As China continues to open up its capital markets rapidly, the importance of Chinese assets in the global markets keeps growing, while the efficiency of its resource allocation is also improving.
“With the official approval granted, we expect that when the securities firm launches its business, Standard Chartered will be able to better serve our Chinese and overseas clients, providing holistic and high-quality financial services, including in exchange markets to both mainland and international enterprises and institutions ‘going in’ and ‘going out’ of China’s markets.”
Geng says the firm will have a unique business strategy and focus on fixed-income businesses. She continues: “Riding on the bank’s international network, strong capacity in product innovation and structuring in the fixed income area, as well as its full commitment to serving China’s capital markets, the securities firm will adopt a differentiated business model.”
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