BEIJING - China's securities regulator has approved a brokerage joint venture (JV) between the mainland and Hong Kong investors, the first under the Closer Economic Partnership Arrangement (CEPA) between the mainland and Hong Kong.

With a registered capital of 3.5 billion yuan ($540 million), the JV will be set up in Shanghai pilot free trade zone and offer standard brokerage services, Deng Ge, spokesman for China Securities Regulatory Commission (CSRC), said at a press conference on Friday.

The JV will have six months to register with regulatory authorities before starting operation, according to a document posted on the CSRC website.

Three Hong Kong investors will have a combined stake of 34.85 percent in the new company while 11 mainland investors will take the remaining 65.15 percent, according to the document.

CEPA allows Hong Kong or Macao-funded financial institutions to set up one brokerage JV in each of Guangdong, Shanghai and Shenzhen with a maximum stake of 51 percent. They can also set up one brokerage JV in each of the mainland's reform pilot zones with a maximum shareholding of 49 percent.