China

Daiwa establishes Joint Venture Securities Company Approved by CSRC

Daiwa Securities Group has announced that the China Securities Regulatory Commission (CSRC) had approved the application for establishing a joint venture securities company (JV) in China by Daiwa.

Daiwa will complete various formalities of establishment of the new company according to the provisions of relevant laws and regulations to accelerate various work of preparation for the JV starting business, the firm said in a press release.

Through the new joint venture, named as ‘Daiwa Securities (China)’ Co. Ltd., Daiwa will provide Chinese and global customers with services by its strong overseas network and international business experience, and will also contribute to the growth of the capital markets of China and Japan.

According to an article by Nikkei Asian Review, the new joint venture will be set up with USD146 million in capital, and will be co-owned by Daiwa, owning 51%, Capital Operation and Management Center, owning 33%, and Beijing Xicheng Capital Holdings, owning 16%.

The new subsidiary will reportedly be headquartered in Beijing, partially due to its long-standing partnership with the capital-based CSC Financial, a unit of Citic Securities, and partially due to the support Daiwa received from the Chinese government.

Traditionally, Daiwa has handled orders for Chinese stocks from Japanese retail investors via Hong Kong; following the announcement of the joint venture’s approval, Daiwa has not commented on what will become of its Hong Kong operation.

On the establishment of the joint venture, a Daiwa spokesperson said: “There are risks in doing business into China," referring to the country's bruising trade dispute with the US. "But China is a large market where we want to have a foothold.”