Huatai Securities given access to the QDII camp

Yesterday Huatai Securities Co got the regulatory approval to undertake overseas securities investment business, according to reliable sources. Up to now, 5 domestic brokers have obtained the QDII license and several others in the sector are expected to get their applications approved soon.

Huatai Securities is reported to have obtained the QDII qualifications at the end of the last year and currently working on preparation and design of its QDII product. It still takes some time to design, apply for, and get approval on QDII products after the landing QDII license, said industry insiders. Before Huatai, China International Capital Corp, China Merchants Securities, Citic Securities and Guotai Jun’an Securities had successively acquired the approval to deal in QDII business.

Under the regulations on the QDII qualification, before allowed to invest in overseas securities, securities firms must meet such strict standards as a net capital of no less than 800 million yuan, net capital-asset ratio of no lower than 70%, minimum one-year experience in assembled asset management, and no less than 2 billion yuan of managed assets or equivalent foreign exchange assets at the end of the latest fiscal quarter. So far about 10 securities companies have satisfied the requirements.

Analysts believe the QDII license holds great strategic importance to brokers as it can help them widen business channels, improve their product lines and comprehensive service quality, and grab larger market shares. In addition, carrying out QDII business can also prompt domestic brokers to cultivate and train talents under a global context, enhance their business operation, risk control and product innovation, and head toward internationalized expansion.

A Sinolink Securities analyst compared brokers with fund managers and pointed out the former have more advantage and mature experience, as many domestic securities firms have subsidiaries in HK which deal in international business and own their unique characteristics. He also thought the launch of QDII products lies in the timing, which had better come just before the start of the "through-train to HK stocks" program.