In order to expand its securities business in mainland China and seize the initiative in establishing a cross-strait joint venture securities firm, China Development Financial Holding Corp. (2883) approved the signing of a joint venture memorandum between its subsidiary KGI Securities and Jin Jiang International (Group) Company Limited. Official signing will occur after submission to regulatory authorities for review according to the law.
China Development stated, certain provisions of this joint venture memorandum will take effect on the day of the signing while other provisions will take effect after ECFA related service-trade agreements become effective and the promulgation of “Regulations Governing Approval and Management of Securities and Futures Transactions and Investment Between the Taiwan Area and the Mainland Area” amended by the Financial Supervisory Commission (FSC) and laws and regulations related to the establishment of cross-strait joint venture securities firms amended by the China Securities Regulatory Commission.
KGI will establish a joint venture securities firm in Shanghai with Jin Jiang subsidiary Shanghai Jin Jiang International Investment Management Co., Ltd. with registered capital expected at RMB 800 million and KGI and Jin Jiang Investment holding a 51% and 49% stake, respectively.
Jin Jiang is one of China’s largest integrated tourism conglomerates with assets totaling RMB 38.2 billion as of the end of 2013. Its subsidiaries include four listed companies with operations focused on hotel management and investment, tourism, and related transportation services. KGI and Jin Jiang Investment’s newly established joint venture securities firm will combine the advantages and resource development innovation businesses of both parties. The new company will aggressively integrate China Development Financial’s niche of close industry interaction and powerful financial resources in the Greater China Region and focus on the needs of high-end customers and institutional clients to develop an operating model unlike existing Chinese securities firms. Its development will move towards niche and diversified financial products and a cross-border investment platform.
China Development Financial stated, KGI’s Greater China business strategy involves utilizing Hong Kong as an Asian Pacific trading platform and product center on the one hand and moving into China through a joint venture securities firm on the other to provide customers with comprehensive and innovative financial products and services. After the joint venture securities firm is established, the addition of the recently acquired futures company in Singapore will give KGI more complete innovative financial product advantages and a vast customer base throughout the China, Southeast Asia, Northeast Asia, and Islam markets.