The first foreign wholly-owned futures company is here!
htmlOn June 18, the China Securities Regulatory Commission issued an announcement to approve the equity change of JPMorgan Futures Co., Ltd. JPMorgan Futures was approved to become China's first foreign-owned wholly-owned futures company, which is also the first foreign-owned financial licensed institution born after the introduction of China's financial industry's policy of expanding its opening up to the outside world.
CSRC stated that in order to further expand the opening up of the futures market, the CSRC recently approved JPMorgan Chase Futures as my country's first foreign-owned wholly-owned futures company in accordance with the law. In the next step, the CSRC will continue to deepen the opening up of the futures market and introduce foreign shareholders of futures operating institutions that meet the conditions to promote the healthy and stable development of futures operating institutions.
According to a reporter from Securities China, JPMorgan Chase Futures has developed rapidly since last year. The company focuses on serving large institutions and achieves breakthrough business development by seizing the opportunities of internationalization of futures products. Industry insiders believe that the emergence of wholly foreign-owned futures companies will promote the overall high-quality development of the industry and at the same time help the opening up of the domestic futures market.
JPMorgan Futures becomes wholly foreign-owned
In the relevant approval, the China Securities Regulatory Commission stated that in accordance with the "Regulations on Futures Trading Management", " Futures Company Supervision and Administration Measures " and " Foreign-Invested Futures Company Management Measures ", after review and approval, the company shall handle the change of the equity of JPMorgan Futures in accordance with the law and other related matters.
Previously, the shareholders of JPMorgan Futures were Zhuhai Myland Fund Management Co., Ltd., Jiangsu Weiwang Venture Capital Co., Ltd. and J.P. MORGAN BROKING (HONG KONG) LIMITED, with shareholding ratios of 50%, 1% and 49% respectively. After this change, the company became a wholly-owned shareholding of J.P. MORGAN BROKING (HONG KONG) LIMITED.
JP Morgan Futures was formerly Zhongshan Futures. It was established in May 1996 and was changed to a Sino-foreign joint venture in September 2007. The latest industrial and commercial information shows that the company's registered capital is 460 million yuan. According to the official website of the China Securities Regulatory Commission, the application for JPMorgan Futures to change its equity was submitted at the end of last year and was officially accepted on April 23 this year.
JPMorgan Chase Group (NYSE :JPM) is a world-leading financial services company with total assets of US$3.1 trillion and its business is all over the world. It has been operating in China since 1921. David Martin, head of the Asia-Pacific region of JPMorgan Global Clearing, said when applying for a change in futures company equity: "With the continued opening of China's financial market, we are very happy to further expand our business strength in China. With JPMorgan's leading position and business expertise in the global futures market and close cooperation with global investors, we will be able to provide customers with better channels and liquidity to enter China's increasingly mature futures market, and contribute our strength to help the further development of China's financial industry."
Milestone Event of China's financial industry opening up to the outside world
0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 Previously, foreign private equity funds were allowed to register with the association as a wholly owned person, but private equity funds are not traditional licensed institutions in China.
On July 20, 2019, the Office of the Financial Stability and Development Committee of the State Council issued the "Measures on Further Expanding the Opening of the Financial Industry", which advanced the time when the foreign-investment share ratio restrictions of securities companies, fund management companies and futures companies were lifted in 2021 to 2020. Starting from January 1, 2020, the restrictions on foreign equity ratio of futures companies will be lifted. Relevant entities may submit administrative license applications to the China Securities Regulatory Commission in accordance with the "Regulations on Futures Trading Management", "Regulations on Supervision and Administration of Futures Companies", "Regulations on Management of Foreign-Invested Futures Companies" and other relevant provisions. The proportion of equity holdings of futures companies that meet the conditions can reach 100%, and the China Securities Regulatory Commission will approve them in accordance with the law. This cleared the obstacles for the birth of a wholly foreign-owned futures company.
Futures companies took the lead in releasing wholly foreign-owned enterprises, playing a leading role in trying out, and foreign-owned wholly-owned Chinese financial licensed institutions have become possible since then. At the "12th Lujiazui Forum", Chairman of the China Securities Regulatory Commission Yi Huiman said that he will continue to encourage and support foreign financial institutions to establish or control securities and fund futures institutions to create a fair and good market environment for foreign institutions.
In addition to the futures industry, foreign investment opening in securities companies and public offering industries is also accelerating. Currently, 7 brokers, including UBS Securities , Nomura Oriental International Securities, Morgan Datong Securities (China), Morgan Stanley Huaxin Securities , Goldman Sachs , Gaohua, HSBC Qianhai and Credit Suisse Founder, have been approved for foreign holdings, with foreign holdings of 51%. In terms of public offerings, overseas asset management giants , BlackRock and Lubomai have submitted public offering applications, and SPDB Morgan Fund and Morgan Stanley Huaxin are also seeking 100% control of foreign parties. The industry predicts that public offering licenses may be the next breakthrough to achieve sole proprietorship for foreign capital.
On April 3, 2020, Morgan Asset Management announced that it had reached a preliminary business consensus with Shanghai International Trust, a holding company under Pudong Development Bank, to acquire 100% of the equity of the joint venture Shanghai Investment Morgan Fund. Morgan Asset Management is expected to become the first foreign asset management company with absolute control over China's public offerings.
Foreign futures companies help internationalize the futures market
JPMorgan Chase Futures has become the first foreign-owned futures company, and the territory of China's futures industry will also usher in historic new changes. Industry insiders believe that foreign futures companies can play an important role in the "bringing in" overseas investors, which will have a positive impact on the internationalization of China's futures market.
According to a reporter from Securities China, JPMorgan Futures focuses on serving large institutions and does not intervene in retail business. In 2018, the launch of Shanghai crude oil futures marked the breaking of the internationalization of China's futures market, and since then, multiple international varieties have been implemented one after another. JPMorgan Chase's futures business has developed rapidly, and last year it achieved breakthrough development in its business scale.
According to incomplete statistics, there are currently three joint venture futures companies in China. In addition to JPMorgan Futures, the other two are Galaxy Futures and UBS Futures. Among them, Galaxy Futures' first Sino-foreign joint venture futures company in China, with Royal Bank of Scotland holding a shareholding ratio of 16.68%; UBS Futures is a wholly-owned subsidiary of UBS Securities, and UBS Securities is the first foreign-controlled brokerage firm in China. There was once a joint venture futures company in China, CITIC Xinji Futures, which was absorbed and merged by CITIC Futures in 2014 and withdrew from foreign capital.
In addition, Gaohua Securities also has a wholly-owned subsidiary Qiankun Futures. Goldman Sachs' application to increase its stake in Goldman Sachs Gaohua from 33% to 51% has been approved. Goldman Sachs previously stated that it will transfer and integrate all business and management departments operating in Gaohua Securities to Goldman Sachs Gaohua as soon as possible. After the migration is completed, Goldman Sachs will have a futures license under Gaohua Securities.
The Chinese futures market has developed rapidly in recent years, and the competitive differentiation of futures companies is also deepening. According to data from the China Futures Association, as of the end of December 2019, there were 149 futures companies nationwide, with a total operating income of 27.557 billion yuan in 2019, creating a net profit of 6.05 billion yuan, and a net profit decline of 4.92% year-on-year. Since the beginning of this year, the industry's scale has seen overall rapid growth, with the margin scale of the futures industry approaching 600 billion yuan, with an annual growth rate of more than 20%.
This article is from brokerage China
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