The China Securities Regulatory Commission (CSRC), the country's securities regulator, began soliciting public opinions on draft regulations Friday that could eventually loosen curbs on new branch openings by local brokerages, a move that experts say may intensify competition among securities firms.
The draft rules are primarily aimed at lifting restrictions on the number and geographic distribution of new branches that securities firms can open, the CSRC said in a statement posted on its website Friday, which indicates that these businesses may soon be able to decide for themselves how many branches they want to operate and where they should be located based on the scope of their business, as well as their development plans and management abilities.
Moreover, the commission may also axe the current approval process that new securities branches - including branch companies and securities outlets - have to go through before they can offer new products and services to their clients, according to the draft rules.
Restrictions on the expansion of the brokerage sector were put into place by the CSRC five years ago in order to prevent securities companies from mindlessly opening new branches and inflating competition in the still-immature industry. At present, securities companies are not allowed to open new branches in regions where the number of brokerages has reached a saturation point as determined by authorities.
Although the CSRC cited the reduced costs associated with opening new branches as well as the growing demand for financial services in second- and third-tier cities as the primary motivators behind its recent draft, experts tend to attribute this development to the country's push for further opening of its capital market.
China's weekly story (2013.01.27-01.31)
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