New Rules on JV Securities Companies: A Limited Opening of China's Securities Industry

July 02, 2002 | BY

clpstaff &clp articles

The China Securities Regulatory Commission (the CSRC, China's securities regulatory body), issued the Establishment of Securities Companies with Foreign Equity Participation Rules (the Securities JV Rules or the Rules) on June 1 2002. The Rules set out the conditions and procedures for the establishment of Chinese-foreign securities joint venture companies and they represent a limited opening up of China's securities industry to foreign investors.

 By Bill Shouyun TongWyselead Law Firm,Shanghai

The qualification requirements

While the Securities JV Rules allow the establishment of securities joint venture companies between foreign securities firms and their Chinese counterparts, the Rules have set out various qualification requirements in respect of the shareholders. Apparently, the intent of the legislature is to encourage major international securities firms to set up joint ventures with Chinese securities companies or to acquire a stake in Chinese securities companies.

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