The Shenzhen-based broker under China's Merchants Group has invited UBS Securities and Goldman Sachs Gaohua Securities to help arrange its initial public offering, it said in a statement over the weekend.

Swiss bank UBS AG owns 20 percent of UBS Securities, which was set up early this year via a revamp of former Beijing Securities. Goldman Sachs owns 33 percent of its mainland venture, which was established in 2004.

Merchants Securities didn't say when or where it planned to list or how much it proposed to collect through the stock sale. But it usually takes nearly half a year for underwriters to advise the company before its eventual listing.

Earlier media reports said the broker might choose to issue yuan shares in Shenzhen instead of Shanghai partly because it is based there.

China's stock regulator is encouraging stronger securities companies to tap public funding for expansion as it hopes to boost competitiveness and transparency of domestic firms before opening the sector further to foreigners.

Related readings:  Merchants Holdings profit up  Brokerage beefs up to ease IPO issue  Record number of firms to list overseas Find more in Markets Watch

A slew of mainland brokers, including industry giant Guotai Jun'an Securities Co and Everbright Securities Co, have said they were seeking IPOs as early as this year, striving to conduct the first IPO by a broker in four years.

China's stock exchanges now host only two public brokerage houses, Hong Yuan Securities Co and Citic Securities Co. Shanghai-based Haitong Securities early this month won regulatory approval to perform a back-door listing by buying a firm that's already trading.

"I expect broker shares will be hotly pursued by investors due to their scarcity and the companies' rosy growth potential," said Li Zhiming, an Orient Securities Co dealer.

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