CITIC East China Corp., and Calyon Financial Hong Kong are to form a new futures brokerage entity established under the Closer Economic Partnership Arrangement (referred as CEPA).
If all approvals are obtained as per schedule, the joint venture may become the first futures brokerage in Shanghai and second futures brokerage in China that is jointly owned by a Chinese firm and a Hong Kong brokerage firm. CITIC East China will be the majority shareholder.
CITIC Futures is part of China’s top State-Owned Enterprise, namely CITIC Group. CITIC Futures currently has memberships on the Shanghai Futures Exchange, Dalian Commodity Exchange and Zhengzhou Commodity Exchange.
Calyon Financial Hong Kong is a part of the Calyon Financial Group, which is wholly owned by Calyon Credit Agricole CIB and part of the Credit Agricole Group in France.
After signing the agreement, the joint venture will seek regulatory approval from the China Securities Regulatory Commission (CSRC) and relevant required regulatory bodies. The overall approval process is anticipated to conclude within three to six months.
“We’re enthusiastic about the opportunities for the new joint venture,” says CAI, Xiliang, the General Manager of the CITIC East China (Group) Corp., the majority shareholder of CITIC Futures. “The company will be well-positioned to participate in China’s rapidly developing financial and commodity futures industry.”
The China Securities Regulatory Commission has announced plans to open the Chinese futures markets to foreign investors. Currently, fully or majority-owned Chinese futures firms are the only participants on the Chinese markets. The joint venture will seek qualification as a majority-owned Chinese firm.
“We have the highest respect for the CITIC Group and for CITIC Futures,” adds Richard Ferina, Calyon Financial’s Chairman and Chief Executive Officer. “We’re pleased to have formed this partnership and look forward to working with CITIC Futures to continue developing China’s futures markets.”