First Chinese Securities Firm in Korea
Zhaoshang Securities of China laid the foundation for making a foray into the Korean market for the first time among mainland Chinese securities firms. Zhaoshang Securities is an affiliate of the Zhaoshang Group, a large government-run financial group and ranks within the top eight in China.
The Securities and Futures Commission of the Financial Supervisory Commission announced on August 25 that it resolved to give Zhaoshang Securities a preliminary business permit.
The Chinese securities company opened its Korean office in Yeoido, Seoul in 2011. Since then, they had conducted research work. In the middle of February of this year, Zhaoshang Securities applied for a preliminary business permit to the the Financial Services Commission of Korea. The preliminary business permit should receive a resolution by the commission. The company will be able to begin its securities business when they prepare human resources and facilities and the Securities and Futures Commission approves their main application for the business permit.
Zhaoshang Securities is planning to broker overseas stocks including Chinese stocks and engage in the overseas exchange-traded derivatives business among others in Korea. Zhaoshang Securities is expected to expand its business into investment banking such as an IPO by making use of the financial power of Zhaoshang Bank, the mother company of Zhaoshang Securities.
“Yuanta Securities Korea doing business Korea after taking over now-defunct Tong Yang Securities is a Taiwan-based securities firm. Accordingly, Zhaoshang Securities became the first company from mainland China that made a foray into the Korean market,” said an official at the Financial Supervisory Commission.
As the Chinese government recently decided to implement the Shenzhen-Hong Kong Stock Connect within this year following the Shanghai-Hong Kong Stock Connect, Korean investors’ interest in Chinese stocks are on the rise. Therefore, it is forecast that Zhaoshang Securities will trigger more mainland Chinese securities companies’ entries into the Korean market.
The owner’s equity of the head office of Zhaoshang Securities stood at 8.3 trillion won at the end of last year. It is known that Zhaoshang Securities runs about 90 branches all over China. On the other hand, the Securities and Futures Commission resolved the main business permit for the Seoul Branch of ING Securities, a Dutch securities firm. The main permit was resolved in eight months since the resolution of a preliminary permit in December of last year. Accordingly, ING Securities will be able to begin their business in Korea in eight years since they sold off their Seoul branch and withdrew from Korea in wake of the global financial crisis in 2008.