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UBS green lighted for Chinese brokerage business

UBS green lighted for Chinese brokerage business

(21 June 2006 – China) Chinese regulators have given UBS the go-ahead to establish a brokerage operation in China. UBS will tap into China’s financial services market through a 20 percent stake in local firm, Beijing Securities, becoming the first investment bank to invest in a Chinese brokerage.

The deal was announced in September 2005. At the time, UBS said it expected to pay US$212 million for the stake.

The Swiss investment bank said it confirmed that "China Securities Regulatory Commission has issued preparatory approval for the restructuring of Beijing Securities".

In all likelihood, UBS will be followed by other major investment banks, many of which are exploring ways of establishing a footprint in a fast growing and potentially lucrative market.

Foreign banks Merrill Lynch, JPMorgan Chase, HSBC, Morgan Stanley and Credit Suisse are all reportedly eyeing Chinese brokerages.

UBS is tipped to use its stake in Beijing Securities to develop a number of businesses such as equity underwriting and domestic debt.

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