The pilot cross-border business of Galaxy Securities is approved for securities dealers to go to sea for comprehensive supervision
Time Weekly reporter Sheng Xiaolan from Shanghai
On the evening of October 12, Galaxy Securities announced that the pilot qualification of cross-border business was approved by the CSRC. This is the sixth broker approved for this business this year. Before this year, cross-border business was approved slowly, with only leading brokers citic securities and Haitong Securities , which was approved in 2014 and 2015 respectively.
Since this year, the approval speed of cross-border business of securities firms has been significantly accelerated, highlighting the determination of the regulators to actively promote the development of overseas business of securities firms this year. At present, there are 8 listed securities companies approved for cross-border business.
At the same time, the supervision of overseas subsidiaries of securities firms has entered a new stage. On September 28, Gao Li, the spokesman of the CSRC, said at the press conference that in order to promote the securities fund operating institutions to go global in an orderly manner according to law and effectively strengthen the management of securities fund operating institutions on overseas institutions, the CSRC officially issued the Administrative Measures for Securities Companies and Securities Investment Fund Management Companies to Establish, Acquire and Share in Overseas Operating Institutions (hereinafter referred to as the Measures).
The Measures pointed out that the net assets of the newly established overseas subsidiaries should not be less than 6 billion yuan; At the same time, we should improve the compliance management system covering overseas institutions. For existing overseas institutions with complex organizational structure, the regulatory authorities will give a 36 month transition period for rectification. In the future, under the environment of strong supervision and risk control, the overseas business of securities companies will be orderly promoted.
Galaxy Securities pilot cross-border business approved
Galaxy Securities announced that it had recently received the Reply on Matters Related to the Pilot Cross border Business of Galaxy Securities from the CSRC.
This is the sixth broker approved to carry out cross-border business pilot this year. Shanxi Securities Analyst Liu Li believes that the approval of cross-border business is a powerful attempt for securities companies to integrate into the global financial system and connect with the international capital market.
At the beginning of this year, Galaxy Securities began to accelerate its overseas business layout. On January 18, Galaxy Securities passed its wholly-owned subsidiary Galaxy China International and CIMB Malaysia completed the transaction and delivery of 50% equity of CIMB Securities International (CSI). Lianchang Securities International is a securities company operated by Lianchang Group other than Malaysia. Its registered place and operation management headquarters are located in Singapore. After the pilot qualification is approved, the cross-border business of Galaxy Securities may enter a period of accelerated development.
In fact, since this year, the cross-border business of securities firms, which has stagnated for two years, has finally broken the ice and the approval speed has been accelerated. In January this year, Guotai Jun'an and Huatai Securities Won the pilot qualification for cross-border business; In May this year, gf securities , CICC and China Merchants Securities It has also been approved successively. In addition to CITIC Securities and Haitong Securities, which were approved in 2014 and 2015, there are now 8 listed securities companies approved for cross-border business. 2018 is the year of "cross-border" expansion of the securities industry.
Insiders believe that the intensive release of cross-border business of securities dealers is the beginning of the gradual integration of the securities industry into the international capital market; On the one hand, this measure can improve the internationalization degree and anti risk ability of securities companies, on the other hand, it can also provide customers with more abundant product lines and improve asset allocation ability.
Judging from the approval announcements of securities companies that have been approved or expanded cross-border business since this year, the regulatory authorities not only allow companies to carry out overseas proprietary business, but also approve them to carry out cross-border agency business. With the increasing demand of high net worth customers for overseas asset allocation and the high demand for cross-border investment and risk hedging, the new cross-border agency business scope of the above securities companies will have a significant positive effect on the deepening of their wealth management layout.
Wu Pingping, an analyst with Galaxy Securities, believes that the development of cross-border business will help securities firms improve their income structure, increase their profitability and enhance their core competitiveness. With strong capital strength and strong comprehensive strength, large securities companies have advantages in business scale and qualification approval. It is expected that the industry concentration will further increase in the future.
Increase in the proportion of overseas business revenue
There are far more than the above 8 brokers in overseas business. According to the data released by the CSRC at the end of 2017, there are 31 securities companies in China, and the number of institutions acquired overseas does not exceed 30. At the same time, these securities companies have set up more than 100 subsidiaries and subsidiaries overseas, which is a huge scale.
In the current sluggish environment, most securities companies regard overseas business as a new force to expand their business. Securities companies are paying more and more attention to cross-border business, and overseas business is becoming more and more important in revenue composition.
An investment banker from a medium-sized securities firm in Beijing told the Times that many securities firms have focused on overseas business, "In recent years, the market environment and regulatory environment are constantly changing, and the four traditional businesses of securities companies are also constantly under pressure, so finding new driving points for diversified development has become the choice of most securities companies, and overseas business layout has become the focus of the development of securities companies."
According to the latest statistical data of the China Securities Association, in 2017, the securities business income of overseas subsidiaries of securities companies accounted for more than 20% of the operating income, and there were two overseas subsidiaries of securities companies, Haitong Securities and CICC, accounting for 25.58% and 20.67% respectively. CITIC Securities ranked third, accounting for 12.24%. Among the other first tier securities companies, there are several securities companies whose business revenue accounts for more than 5%, and they are Guotai Jun'an, Huatai Securities, China Merchants Securities and Guangfa Securities, accounting for 9.23%, 8.05%, 6.69% and 5.41% respectively.
Among them, Haitong Securities, as the earliest securities firm to develop overseas business, is also the leading securities firm with the most strength and historical precipitation in the business development. At present, Haitong International Securities and Haitong Bank are the main operating entities of overseas business, of which Haitong International Securities has always maintained its leading position among Chinese funded securities institutions in Hong Kong.
Data shows that in the first half of 2018, in terms of corporate financing business, the number of IPO projects of Haitong International Securities ranked third among all investment banks in Hong Kong, and the number of equity financiers ranked fourth among all investment banks in Hong Kong. In the first half of this year, Haitong International Securities completed its first IPO project in the US market. In addition to maintaining strong market competitiveness in its main businesses, Haitong International Securities also completed the acquisition and integration of Haitong Bank's UK and US subsidiaries, further optimizing its overseas strategic layout.
It is worth mentioning that the regulatory authorities also give relevant policy support to the securities companies going to sea. According to the Regulations on the Classification and Supervision of Securities Companies (2017 Revision), if the securities business income of overseas subsidiaries of securities companies accounted for 40%, 30% and 20% of the operating income in the previous year, and the operating income was above the industry median, 4 points, 3 points and 2 points will be added respectively. In comparison with the above data, Haitong and CICC both gained extra points in this year's big examination of securities dealers by virtue of overseas business.
Net asset threshold is no less than 6 billion
Since this year, the proportion of overseas business income of the first echelon of securities companies is still rising. Data shows that in the first half of this year, overseas business income of Haitong Securities and CITIC Securities accounted for 18.9% and 13.46% respectively, both of which were higher than that of last year. In addition, Huatai Securities' overseas business also grew rapidly. In the first half of this year, the company's overseas business income reached 1.01 billion yuan, accounting for 12.3%, while the figure for the whole year last year was only 7.7%.
However, in the process of active overseas layout of securities companies, some problems have gradually emerged. For example, the development orientation is unclear, and the domestic parent company's management and control is weak; The main business is not prominent, and blind expansion of business; The organizational structure is complicated, the corporate governance is imperfect, and the internal control is more difficult; Active compliance awareness is not strong, and risk management ability needs to be improved.
In response to the above problems, the CSRC has formulated the Measures issued this time. This method is applicable to the establishment, acquisition of subsidiaries or equity participation of future securities fund operating institutions overseas.
There are altogether 38 articles in the Measures, which mainly include four aspects: maintaining an appropriate threshold and supporting institutions to "go global"; Standardize the business scope and improve the organizational structure; Urge the parent company to strengthen control and improve the management of overseas institutions; Strengthen continuous supervision and improve cross-border supervision cooperation.
According to Article 8 of the Measures, securities firms need to cross a certain threshold of business scale if they want to set up or acquire subsidiaries or joint-stock operating institutions overseas. "The net assets of securities companies should not be less than 6 billion yuan, and the net assets of securities investment fund management companies should not be less than 600 million yuan.".
According to Wind statistics, as of the end of the first half of this year, there were 62 securities companies with net assets of no less than 6 billion yuan. According to the data from the Securities Industry Association, there are 131 securities companies of all kinds in the mainland at present, which means that more than half of the small and medium-sized securities companies will not be able to set up, acquire subsidiaries or participate in operating institutions overseas due to insufficient net assets.
An analyst from a large securities firm in Shanghai told the Times that "the attitude of the regulators is very clear. On the one hand, they support securities firms and other financial institutions to go global, on the other hand, they must strictly control risks and develop steadily."
Editor in charge: Li Feng
