Citi cleared for wholly owned China securities unit

China’s securities regulator has approved Citigroup to establish a wholly foreign‑owned securities firm in mainland China, marking a significant expansion of the US bank’s presence in the country. The new entity, Citigroup Securities (China) Company, will operate as a wholly owned subsidiary, giving Citi direct onshore access to one of the world’s largest capital markets.

Citigroup Securities (China) will be headquartered in Shanghai and registered in the city with capital of 1.2 billion yuan. Before commencing operations, Citi must complete all remaining statutory and regulatory procedures required to set up the firm.

The new licence allows Citigroup Securities (China) to provide a wide range of capital markets services to both domestic and foreign clients. Permitted activities include underwriting capital markets deals, equities brokerage, trading onshore listed shares, bonds, funds and other financial instruments, as well as securities research and investment advisory.

The firm will also offer clients direct access to China’s stock exchanges and other financial products. Citi states that adding these onshore capabilities to its global platform will help clients raise capital, access investors and trade locally while linking them to opportunities around the world.

Citi has operated in China since 1902 and serves multinational corporations, major Chinese companies and public‑sector institutions, including 70 percent of Fortune 500 companies operating in the country. The new securities business is intended to complement services provided by Citi’s Corporate and Investment Bank and Commercial Bank, giving corporate and institutional clients another channel to engage with China’s capital markets.

The bank says the approval will strengthen its ability to connect Chinese issuers and investors with global capital. Citi reports that it has helped Chinese clients raise more than US$40 billion through global capital markets since the beginning of the year, and the new licence will allow it to add domestic underwriting to its existing offshore offering.

Citigroup has been seeking a licence to establish a wholly owned securities firm in China for several years, following regulatory changes that removed caps on foreign ownership of mainland‑based securities firms. With the new approval, Citi becomes the seventh foreign institution to own a wholly owned securities firm in mainland China.

Mainland China’s stock markets have a combined market capitalisation of US$15.6 trillion and around 240 million investors. The entry of another global bank with full control of an onshore securities platform further diversifies competition and expands the range of underwriting, brokerage and advisory options available to issuers and investors.