China Securities Regulatory Commission (“CSRC”) will further remove the foreign ownership limit in securities companies commencing on April 1, 2020. The announcement was made on March 13, 2020 by CSRC in accordance with unified policies on opening up the financial sector by China to implement the Economic and Trade Agreement Between the Government of the People’s Republic of China and the Government of the United States of America (“China-US Phase One Agreement”). Qualified foreign investors may submit applications for establishing a new securities company or changing the actual controller of an existing securities company in accordance with applicable laws and regulations, relevant rules of CSRC, and relevant service guidelines. This is not only another important administrative measures for financial opening-up after the removal of foreign ownership limits in foreign-invested futures companies and fund management firms, but also the biggest leap in the gradual removal of foreign ownership limit in foreign-invested securities companies. This article comments on the removal of foreign ownership limit in securities companies based on a review of its policy history as well as our experience of establishing several foreign-invested joint venture (hereinafter “JV”) securities companies.
