Interdealer broker Icap aims to be the first foreign company to enter the Chinese money broking sector, after Chinese regulators said they would relax rules previously banning the practice.Icap will set up a joint venture with an unnamed Chinese partner. Michael Spencer, Icap chief executive, said: "China represents a significant opportunity for Icap to take part in, together with a joint venture partner, in the rapid development and growth of the interbank financial markets. This is an exciting prospect for Icap."
The China Banking Regulatory Commission (CBRC) said on June 29 that pilot money-broking ventures would be allowed, but foreign companies would need to set up joint ventures with "eligible domestic financial institutions and internationally renowned brokers" in China to participate.
"The introduction of money brokers is instrumental in enhancing the Chinese market’s liquidity and transparency, as well as improving the efficiency of capital utilisation and allocation," the CBRC added. No timescale for the liberalisation has been announced.
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