French bank BNP Paribas gets approval for 4th fully foreign-owned brokerage in China: report

French banking group BNP Parisbas recently established a wholly owned securities firm in Shanghai, becoming the fourth foreign financial institution to set up a wholly owned brokerage firm in the Chinese mainland, the Securities Daily reported on Tuesday.

Industry insiders said that steady moves by foreign financial institutions to open branches in the Chinese mainland attest to the appeal of the nation's capital market amid China's efforts to further open up its financial sector.

BNP Paribas' move followed similar actions by JPMorgan, Goldman Sachs and Standard Chartered. Japan's Mizuho Securities and US-based Citigroup are in the process of applying for regulatory approval from China, according to the report.

Observers noted that these developments highlight growing foreign interest in China's capital market and the country's efforts to further open up its domestic market.

A resolution adopted at the just-concluded third plenary session of the 20th Communist Party of China Central Committee stressed that China will promote high-standard opening-up of the financial sector, support qualified foreign capital institutions in participating in China's financial services trials, and move faster to build Shanghai into an international financial center.

Zhou Yunnan, a Beijing-based veteran investor, told the Global Times on Tuesday that the recent moves by foreign financial institutions signal that the internationalization of China's capital market has continued to advance.

"It shows the attractiveness of China's capital market is still high, and the development potential of China's capital market is vast. It not only provides a more convenient channel for global investors to participate in China's economic development, but also offers a more efficient opportunity for global companies to enter the Chinese market," Zhou said.

The BNP Paribas wholly owned securities firm is based in Shanghai, with registered capital of 1.1 billion yuan ($151 million). Its business scope includes securities brokerage, consultancy and management of securities assets.

Wu Qing, head of the China Securities Regulatory Commission (CSRC), said at the Lujiazui Forum in Shanghai in June that the CSRC will support Shanghai in building a world-class international financial center, promote the high-quality development of the stock and bond markets, and support more foreign financial institutions to operate in Shanghai and attract more medium- and long-term capital.

Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times on Tuesday that China's capital market is large and offers the prospect of decent profitability.

Despite some Western politicians' efforts to suppress China's development, China is willing to share its growth dividends with global companies based on cooperation and win-win outcomes, Dong said, noting the management expertise of foreign financial institutions is highly valued, and they are welcome to engage in competition in the Chinese market, provided they comply with domestic laws and regulations.