DBS gets licence for its majority-owned securities JV in China; operations to start

DBS Securities (China) will operate brokerage, securities investment consulting, securities underwriting and sponsorships, as well as proprietary trading. PHOTO: REUTERS

SINGAPORE (THE BUSINESS TIMES) - DBS on Monday (June 7) received the official green light for its majority-owned securities joint venture (JV) in China, with the attainment of its securities business licence from the China Securities Regulatory Commission (CSRC).

With business operations officially commencing on Monday, DBS Securities (China) will operate brokerage, securities investment consulting, securities underwriting and sponsorships, as well as proprietary trading.

The establishment of the JV where DBS will have a controlling stake of 51 per cent was announced back in September 2020, amid China's push to open up its financial sector.

On Monday, Singapore's largest bank said in a press statement that this is a "significant milestone that further cements DBS Group's commitment to China", with the JV "committed to providing best-in-class onshore products and services for both domestic and international customers".

China has remained committed to opening up its US$45 trillion (S$59.5 trillion) financial markets even in the midst of a global health crisis, with steps taken since last year in giving foreign financial firms more access to the world's second-largest economy.

For instance, foreign ownership caps on joint ventures were lifted and certain laws were reformed to simplify foreign participation.

With the securities JV, DBS joins the ranks of global banks such as Goldman Sachs, HSBC, UBS Group, Nomura Holdings and JPMorgan keen to capture a slice of the pie.

Mr Piyush Gupta, chief executive of DBS Group, noted that the bank's history in China goes back decades, with DBS the first Singapore bank to set up a representative office in China back in 1993 and one of the first foreign banks to be locally incorporated in 2007.

"Today, DBS Securities is honoured to become the first Sino-Singapore securities joint venture," he said.

"With the establishment of DBS Securities, we will leverage Singapore's experience as an international financial centre while making available the best of DBS' capabilities and offerings to support our customers in both onshore and offshore capital markets."

Mr Gupta added that he hopes to continue to facilitate China's economic growth and looks forward to contributing to its "dual circulation" strategy.

This "dual circulation" strategy, first mentioned in a meeting of China's highest echelons in May 2020, refers to an increased focus on the domestic market, or internal circulation, to cope with a more volatile outside environment. This is meant to complement China's export-oriented growth strategy, or external circulation.

The registered capital of DBS Securities is 1.5 billion yuan (S$310.2 million), with DBS the largest shareholder at 51 per cent.

Other Chinese shareholders include Donghao Lansheng Investment Management Co (24.67 per cent), Shanghai Huangpu Investment Holding (Group) Co (13.33 per cent), Shanghai Huiyang Asset Management Co (6.5 per cent) and Shanghai Huangpu Guidance Fund Equity Investment Co (4.5 per cent).

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