China-Singapore Jingwei client, June 28 (Wei Wei) yesterday (June 27) evening, a news broke the circle of friends of financial practitioners. According to Caixin reports, a few days ago, it was learned from authoritative sources that the SFC plans to issue brokerage licenses to commercial banks, or will select at least two pilot banks from several major commercial banks to set up brokerage businesses.
In this regard, on the evening of June 28, a spokesperson for the China Securities Regulatory Commission said that we have paid attention to media reports. The China Securities Regulatory Commission currently has no more information to inform the market. The development of high-quality investment banks is the need to implement the State Council’s decision on the capital market development and deployment, and is also an important means to promote and expand direct financing. With regard to how to advance, there are multiple path options, which are still under discussion. No matter what method is adopted, it will not have a big impact on the existing industry pattern.
The industry believes that the background of the brokerage license obtained by the bank this time is different from that of 2015. Promoting mixed financial management is not the main goal, and financial backing industry and direct financing development are the main lines of system reform.
Intended to develop direct financing
In fact, as early as 2015, rumors that the regulatory authorities will issue brokerage licenses to banks have spread. At that time, Zhang Xiaojun, a spokesman for the China Securities Regulatory Commission, responded that the China Securities Regulatory Commission is studying the relevant systems and supporting arrangements for commercial banks and other financial institutions to apply for securities and futures business licenses on the basis of risk isolation. The relevant work is in progress and necessary procedures must be performed.
The mixed operation of commercial banks has long reserved a certain space at the legal level. It is understood that Article 43 of the current "Commercial Banking Law" stipulates that commercial banks shall not engage in trust investment and securities business within the territory of the People's Republic of China, or invest in non-ownership real estate or non-bank financial institutions and enterprises, but the State Except as specified.
"The "Commercial Banking Law" already stipulates that banks are generally not allowed to directly engage in brokerage business. Of course, after certain approvals, there may be some exceptions." Dong Ximiao, a researcher specially appointed by the National Finance and Development Laboratory Said.
In fact, it is not uncommon for financial holding companies to hold bank and brokerage licenses, such as Ping An Group, China Everbright Group, CITIC Group, and Post Group. The eight banks of Bank of China, Industrial and Commercial Bank of China, Construction Bank, Agricultural Bank of China, China Merchants Bank, Bank of Communications, Industrial Bank, and Minsheng Bank also obtained brokerage licenses through the curve of subsidiary acquisition. The policy bank China Development Bank has already established a wholly-owned subsidiary of China Development Bank Securities in August 2010.
When is it necessary to renew the issuance of brokerage licenses to commercial banks every five years? Dong Ximiao's analysis of the Sino-Singapore Jingwei client said that in the past two years, the supervisory authorities have repeatedly emphasized "vigorously developing multi-level capital markets and increasing the proportion of direct financing", and commercial banks are the main part of China's financial system, and the entire banking industry accounts for With an asset ratio of over 92%, commercial banks have strong financial strength, many institutional outlets, and a large number of customers. If they obtain a brokerage license, it will help the development of the entire capital market and improve the direct financing ratio better and faster.
"China's financial system is dominated by indirect financing, direct financing is not well developed, and the leverage ratio of enterprises is high. Although we have also made some attempts, such as investment and loan linkage, etc., but for some innovative and technological enterprises Support is often not enough."
Guo Tianyong, director of the Banking Research Center of Central University of Finance and Economics, analyzed that commercial banks are relatively strong. China’s securities companies are relatively small in scale. The current development of direct financing, especially equity investment, is also very important, so if commercial banks can win brokers Licenses can promote future direct financing and capital market development.
Although this rumor has once again triggered the conjecture of mixed operation of the financial industry. However, Soochow Securities analyst Ma Xiangyun bluntly said in his research report that on the one hand, China's financial industry is currently close to mixed operation, on the other hand, from a regulatory perspective, promoting financial mixed operation is not the main goal. Financing is the main line of system reform, which is obviously different from the background of the bank’s pilot brokerage business proposed in 2015.
Or will test the water from the investment bank business
Analyst Tian Jie, an analyst of Analysys Financial, analyzed the Sino-Singapore Jingwei client. At present, brokerage licenses are mainly divided into four categories: one is the brokerage business license, which is mainly a stock trading channel, and the stockholders open accounts for stocks; the second is the investment bank business license, mainly It is to help companies go public for IPOs or to raise funds from groups; third, asset management licenses, which help others manage assets and issue investment and wealth management products; and fourth, self-operated business licenses, which can use their own money to speculate and manage stocks.
Tian Jie believes that large banks already have asset management licenses, and self-operated business licenses can also be excluded. Because bank assets are high, supervision does not allow bank funds to directly enter the stock market, so banks are generally borrowed from trusts or fund subsidiaries This window was later blocked by supervision, so supervision has always been strict with bank assets, so only brokerage and investment banking are left.
"If the opening of the brokerage business has a greater impact on the securities companies. Although the services of the securities companies are highly online, the overall sales department of the securities firm is still expanding. Because the essence of finance is trust, the securities companies have obvious geographical attributes. It requires the endorsement of the sales department, marketing, and customer account opening. One sales department directly radiates the surrounding people. The more sales departments, the stronger the local brand and strength. This trend has not changed at present." Tian Jie introduced.
He observed that no matter whether the location of the bank or the flow of people is much higher than the sales department of the securities company, the marketing personnel of the securities firm are all settled in the marketing of the bank's outlet to realize the mutual benefit of the bank's locking of third-party deposits and the broker's locking of account opening. Therefore, the short-term liberalization of the brokerage business has a greater impact on the securities industry, so the most likely liberalization is the investment banking business license.
Yang Delong, chief economist of Qianhai Open Source Fund, also believes that it is possible to start a pilot from the investment bank business, because the investment bank business is relatively easy to carry out, only the investment bank related staff is required, and the brokerage business and the Liangrong business need more Multiple sales departments and staffing.
Tian Jie explained that there are two main processes in the investment bank business. One is to help companies do the data flow, pricing and help the meeting in accordance with regulatory regulations. The second is to communicate with the channels below and sell all the shares issued.
"At present, the biggest difference between China's investment banking business and foreign investment banking business is not to worry about sales, as long as the meeting can be held, investors and investors will compete to buy, so the main work is to go through the process, meeting and pricing, from this perspective In general, the threshold for big banks is not particularly high, and you can do it as soon as the license is released." He analyzed that the reason for choosing to open the license of bank brokers now may be because of the future registration system and the increase in financing. How to open up the market is a test of the core competence of investment banks. From this perspective, banks have a greater advantage than brokers.
According to Analysys Qianfan data, the current monthly activity of bank APP reaches 400 million, while the monthly activity of securities APP is only 100 million, the monthly activity of brokerage APP is less, and the monthly activity of the industry's first APP is only 8 million. Every month, tens of millions of monthly activities are an order of magnitude worse, so the bank's user resources are more abundant.
Long-term good for the securities industry
After the news of issuing brokerage licenses to commercial banks came out, there were voices that it would bring some negative effects to brokerages. In this regard, many industry insiders believe that the impact on brokers is only in the short term, which will benefit the entire securities industry in the long run.
In Yang Delong's view, after the introduction of competition, the survival of the fittest and the head effect may be formed in the future. According to the current development of China's brokerage industry, there are three ways to activate and build the head brokerage. One is the merger of multiple large brokerages, or the merger of large and small brokerages to merge small and medium-sized brokerages. It is really bigger and stronger in the fierce market competition. It is the introduction of "catfish", such as the Morgan behind Huaxin shares or the introduction of foreign shareholding ratio. The third is the introduction of domestic first-class competitors, such as strong commercial banks, and the financial strength, customer resources and business development capabilities of commercial banks are absolutely It is top-notch.
Yang Delong analyzed that if some strong commercial banks also obtain securities brokerage licenses, the domestic brokerage industry is facing a huge "catfish effect", that is, the strong head brokers will become bigger through the injection of capital from major shareholders in the competition, mergers and acquisitions, etc. Strengthen and grow into a large international brokerage, and some weak small and medium-sized brokerages may be merged or eliminated, the industry's head effect will be more obvious.
From the perspective of funds entering the market, Yang Delong pointed out that the big move of residents' assets in China is the general trend. The supervisory layer intends to promote residents from saving, buying wealth management, and guiding funds to the market. Banks are an important channel to promote funds to enter the market. When it comes to brokerage licenses, it is good for banks and the stock market in the long run.
"All the signs indicate that the regulatory intention is to enlarge and strengthen the entire securities system, enhance the overall strength of the industry, expand financial openness, and introduce more participants to the market." Tian Jie, an analyst at Analysys Financial, believes that the overall securities Brokerage firms actually benefit from the system's revenue and profits. Now that China has opened up foreign brokerages to enter the market, it is not bad to have one more domestic bank.
Who will spend the two commercial banks in this pilot? Dong Ximiao believes that the possibility of ICBC and China Construction Bank is relatively high, because Bank of China has already controlled BOC International Securities through the wholly-owned BOC International, and it holds a brokerage license. Agricultural Bank of China is relatively innovative in terms of innovative business and talent reserve. Compared with ICBC and CCB, there is a certain gap.
In addition, Guo Tianyong talked about the previous discussions in the industry on separate operations and mixed operations, which were concerned that the mixed operation of banks and brokerages is prone to cross-risk transmission and internal benefit transfer. Therefore, to prevent risks, you can take some measures, such as the holding company and each subsidiary is independent of one of the modes that can be adopted.
Dong Ximiao also mentioned that banks need to pay attention to risk isolation. The bank’s main business is commercial banking and innovative business, such as securities brokerage and investment banking. Risk isolation is required, and banks generally need to maintain stability At present, it is the main body of the entire financial industry, and risk isolation can only achieve stability. (Sino-Singapore Jingwei APP)
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