Nomura seeks nod for securities joint venture

Nomura Holdings Inc, Japan's biggest brokerage and investment bank, has applied to set up a securities joint venture with a majority stake in China, becoming the latest foreign firm to take advantage of China's pledge to further open its financial sector.

The China Securities Regulatory Commission said on Tuesday night that it has received the application from Nomura and it will start the approval process in accordance with the laws and regulations.

Nomura sent out a press statement confirming the application. "We have applied to set up a securities joint venture in China. We are currently discussing the details with the relevant parties and are unable to comment further at this stage," it said.

The move by the Japanese firm underscored the rising interest of global financial institutions of expanding their presence in China.

Swiss bank UBS Group AG became the first global bank to submit an application for acquiring a majority stake in its Chinese JV. Other banks such as Goldman Sachs Group Inc and Morgan Stanley have also expressed interest in having majority stakes in their local incorporations. Credit Suisse Group AG is also reportedly interested in boosting its stockholding in its Chinese JV.

Nomura has appointed Lu Ting as its new chief China economist to lead its research team in China that forecasts the country's economic trajectory and drives thought leadership on macroeconomic themes shaping the country.

Prior to joining Nomura, Lu was the global head of research and chief economist at Chinese brokerage Huatai Securities Co Ltd for two years. Before that, Lu worked at Bank of America Merrill Lynch as head of China economics.

"China is an important market for Nomura, and Lu Ting's appointment is further evidence of our commitment to building up our China expertise," said Toshiyasu Iiyama, Nomura's executive chairman, Asia ex-Japan, and head of China Committee in a statement.

On April 28, China's securities regulator issued detailed guidelines on the qualifications for foreign shareholders to set up securities joint ventures and conduct securities business in China.

The new rules allow foreign firms to have a majority stake in their Chinese JVs and it also expands their business scope in China.

Liu Li, an analyst at Shanxi Securities Co Ltd, said the move is an important step of further opening China's securities sector to foreign players and it will bring healthy competition and help introduce mature experiences and expertise from overseas institutions to the domestic industry.