The board of directors of Taiwan-based CTBC Financial Holding Co. on Wednesday approved a plan to partner two mainland companies in a joint venture in the China (Fujian) Pilot Free Trade Zone (FTZ).
The three parties will invest a total of 800 million yuan (130 million U.S. dollars) in what is likely to be the first cross-strait brokerage for mainland A-shares, operating as dealers and offering investment services.
Fujian Province in southeast China is a popular investment destination among Taiwan business people. With the free trade zone opening in April, the province is a core area of the 21st Century Maritime Silk Road.
CTBC will hold a 49 percent stake by contributing 392 million yuan of capital in the new venture. Its president Daniel Wu said the potential of mainland's securities market is huge, especially in margin trading, stock collateral loans and derivatives.
According to a plan released by the State Council, China's cabinet, Taiwan brokerage firms are allowed to set up two joint-stock securities companies that are granted a full-service license registered in the Fujian FTZ, with a 49 percent stake cap.
