CITIC Securities [6030:HK] announced that its board of directors has approved the firm to spend RMB3bn setting up a wealth management affiliate, as reported by 163.com on February 22. Upon the completion of the business registration, the new company will take over CITIC Securities’ securities asset management business. According to people familiar with the matter, the establishment is still pending approval at the subsequent shareholders’ meeting. The new firm in the future may also consider applying for a mutual fund license.
According to industry experts, with independent management and legal identity, such new wealth management companies can better make decisions and operate flexibly in terms of strategic planning. In addition to CITIC Securities, other Chinese securities companies are also setting up affiliated wealth management subsidiaries, like Guohai Securities and Shenwan Hongyuan Securities [0218:HK]. If CITIC Securities’ application can obtain approval, the number of Chinese securities companies owning wealth management affiliates will increase to 21. The wealth management business is also becoming increasingly important for securities brokers. For example, by the end of September 2020, the total assets under management of such companies reached RMB9.50tr, accounting for 17% of the total in the market.