China's securities regulator has approved a brokerage joint venture (JV) between the mainland and Hong Kong investors, the first under the Closer Economic Partnership Arrangement (CEPA) between the mainland and Hong Kong.
With a registered capital of 3.5 billion yuan (540 million U.S. dollars), the JV will be set up in Shanghai pilot free trade zone and offer standard brokerage services, Deng Ge, spokesman for China Securities Regulatory Commission (CSRC), said at a press conference on Friday.
The JV will have six months to register with regulatory authorities before starting operation, according to a document posted on the CSRC website.
Three Hong Kong investors will have a combined stake of 34.85 percent in the new company while 11 mainland investors will take the remaining 65.15 percent, according to the document.
CEPA allows Hong Kong or Macao-funded financial institutions to set up one brokerage JV in each of Guangdong, Shanghai and Shenzhen with a maximum stake of 51 percent. They can also set up one brokerage JV in each of the mainland's reform pilot zones with a maximum shareholding of 49 percent.
