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China relaxes rules for securities firms

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[May 15, 2014]  BEIJING (Reuters) China is relaxing rules for securities companies to allow them to expand their business and offer new products, another step in deepening reforms in its fledging capital market.

Securities firms would be encouraged to develop new businesses tied to the booming online financial services market, and would be expected to help create an industry-wide payment system, the China Securities Regulatory Commission said in a statement on its website, without further details.

Firms would be allowed to broaden their financing channels by raising capital through bond or share sales. Mergers and acquisitions would be encouraged and they can also tap new financing instruments.

Chinese securities firms should also participate more in a pilot plan for cross-border stock investment between Hong Kong and Shanghai and offer a bigger range of financial services to assist two-way investment, the regulator said.

New products that firms can offer include private equity funds, real estate investment trusts and products linked to foreign exchange and commodities.

On its part, the regulator said it would simplify and streamline approval procedures, and lower barriers to entry into the industry for both private and foreign investors.

The measures follow last week's announcement from the government that China would push ahead on a broad range of capital market reforms to better allocate capital, increase foreign investment and improve market transparency.

(Reporting by Aileen Wang; Editing by Robert Birsel)

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