Citi has received approval from the China Securities Regulatory Commission (CSRC) to establish a wholly-owned securities company in China, named Citigroup Securities (China) Company Limited (CSCCL). The company will be headquartered in Shanghai.
The new firm will have a registered capital of 1.2 billion yuan ($180 million), according to Chinese regulators. It will offer equities brokerage, securities underwriting, research and principal trading to domestic and foreign clients, complementing Citi's existing global capabilities.
ONSHORE SERVICES FOR CORPORATE AND INSTITUTIONAL CLIENTS
CSCCL will support the onshore securities and trading activities of Citi's corporate and institutional clients looking to access the Chinese capital markets. Citi said the Shanghai-headquartered company represents its latest commitment to deepening its onshore presence in China.
Group CEO Jane Fraser said in a statement: "By adding onshore capabilities to our global platform, we will be able to do more for clients in China's domestic capital markets, including helping them raise capital, access investors and trade locally, while connecting them to opportunities around the world." Wenjie Zhang of Citi said: "The securities company will be an important part of Citi's strategy in China."
CITI'S FRANCHISE AND RECORD IN CHINA
Citi was among the first international banks to establish a local entity in China, dating back to 1902. It serves 70% of Fortune 500 companies operating in the country and works with several hundred large local corporate and public sector clients.
Citi has helped Chinese clients raise more than US$40 billion year-to-date in global capital markets. The bank does business in more than 180 countries and jurisdictions.
A NEARLY FIVE-YEAR ROUTE TO APPROVAL
Citi applied for a wholly owned mainland Chinese brokerage unit licence in late 2021, as part of its push to ramp up its China onshore operations. The approval ends a nearly five-year journey that was marked by regulatory friction in both Washington and Beijing.
The bank's path to a standalone presence in China has been fraught with delays. The approval, confirmed by the lender and announced by China's regulator, came just weeks after Xi Jinping and Donald Trump met in Washington.
SETTING UP AND BUILDING THE TEAM
Citi will complete all statutory and regulatory procedures required to establish the securities company and prepare for the commencement of operations. It has been hiring for the business over the last couple of years, and a person with knowledge of the matter told Reuters in September that it aims to roughly double the headcount to around 100 people by the end of this year.
Related: ECB's Cipollone says banks have important role in tokenised markets, citing three risks