HSBC gets approval for China securities joint venture

HSBC has received approval from regulators to set up a majority-owned securities joint venture in China, the first for a foreign group in the country. Hong Kong-based Bank of East Asia was also granted approval by the China Securities Regulatory Commission to open a securities house in a special economic zone in southern China but it will take a 49 per cent stake. Foreign banks have had mixed luck with minority-owned joint venture securities companies in China since 2004, when they were first set up. JPMorgan exited its Chinese securities joint venture with First Capital Securities last year, the first global investment bank to sell off its onshore business. HSBC's joint venture was allowed under an agreement between Hong Kong and mainland China that states Hong Kong-funded financial institutions can set up one such business in several large Chinese cities.

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