The China Securities Regulatory Commission (CSRC) has recently issued an approval document authorizing CITIC SEC to modify its business scope. The approval responds to the company's application regarding changes to its securities and futures business operations.
According to the regulator's reply, the application and supporting documents submitted by CITIC SEC have been reviewed. Based on relevant securities laws and regulations, the CSRC has granted approval for the company to adjust its business scope. Specifically, the "securities margin financing" business will now be restricted to operations outside specific regions, including Guangdong Province (excluding Shenzhen), Guangxi Zhuang Autonomous Region, Hainan Province, Yunnan Province, Guizhou Province, Shandong Province, Henan Province, Tiantai County in Zhejiang Province, and Cangnan County in Zhejiang Province.
CITIC SEC is required to manage the subsequent transition smoothly, ensuring the protection of clients' legal rights, proper handling of employee arrangements, and maintaining social stability. The company must complete the industrial and commercial registration changes within six months from the date of the approval. Within 15 days of obtaining the updated business license, CITIC SEC must apply to the CSRC for a renewed securities business license. The company is also obliged to amend its articles of association accordingly and file the revised clauses with the local securities regulatory bureau.
Simultaneously, the Shenzhen Securities Regulatory Bureau issued a separate approval for CITIC SEC's business scope adjustment. This approval addresses changes to several business lines, including securities brokerage, public offering securities investment fund sales, financial product distribution, proprietary securities trading, and securities investment consultancy. The revised scope restricts these activities to regions outside the specified areas mentioned above, with additional clarifications on proprietary trading and investment advisory services.
CITIC SEC must properly handle the winding down of reduced business activities, safeguard client interests, arrange employee placements appropriately, and ensure social stability. The company is required to complete the industrial and commercial registration procedures according to law and, within 15 working days after registration changes, apply for a renewed business license using the necessary documentation. Within 10 working days of obtaining the new license, the company must submit copies of the approval, business license, and business license副本 to the bureau for filing.
This business scope adjustment is part of the follow-up procedures related to CITIC SEC's acquisition of Guangzhou Securities. Previously, with regulatory approval, CITIC SEC acquired stakes in Wantong Securities and Jintong Securities in 2004 and 2006, respectively. In accordance with rules prohibiting affiliated securities firms from engaging in competing businesses, CITIC SEC has delineated business operations between the parent company and its subsidiaries to avoid conflicts. Following the acquisition of Guangzhou Securities, CITIC SEC plans to adjust the business positioning and scope of CITIC SEC South China within a permitted transition period to resolve potential conflicts.
According to the integration plan, CITIC SEC South China will operate as a subsidiary focusing on specific businesses within designated regions, including Guangdong (excluding Shenzhen), Guangxi, Hainan, Yunnan, and Guizhou. Consequently, CITIC SEC will correspondingly modify its business scope and implement effective measures to avoid同业竞争 as required by regulators. The specific arrangements for these changes are subject to the CSRC's final approval.
Guangzhou Securities, established in 1988, was integrated into CITIC SEC in January 2020 and renamed CITIC SEC South China. In 2024, the subsidiary reported operating revenue of 1.113 billion yuan, a 33.95% increase, and operating profit of 431 million yuan, up 17.76%.