The world's second largest inter-dealer broker Compagnie Financiere Tradition (CFT) and Ping An Trust launched China's third largest money brokerage yesterday.

 

"The new joint venture over time will be a healthy contributor to the ongoing development of the domestic financial markets in China," CFT Chairman Patrick Combes said in a statement.

 

Ping An Trust, a subsidiary of China's second largest insurer Ping An, holds 67 percent of the new venture. CFT takes the rest. With registered capital of 50 million yuan, the company is based in Shenzhen and will start operation in six months.

 

The joint venture, Ping An Tradition International Money Broking Co Ltd, will provide all money broking services for the interbank lending, bond and foreign exchange derivative markets, both locally and overseas.

 

The deal is an important step for Ping An Group's financial business as it tries to become a leading group worldwide, said Hoi Tung, CEO and chairman of Ping An Trust.

 

With a presence in 24 countries, Switzerland-based CFT is the world's third largest interdealer broker and covers fixed-income securities and derivatives, interest rate derivatives, treasury products, equities and energy.

 

China approved inter-dealer brokers to operate in its foreign exchange and money markets in 2005. But as few local financial institutions are experienced in these areas, foreign players are encouraged to share expertise with local partners to develop sophisticated markets.

 

The China Banking Regulatory Commission stipulated a money-broking joint venture should have minimum registered capital of 20 million yuan. Only top international money brokers with 20 years' professional experience and a two-year presence in China are qualified to set up joint venture money brokerages in the nation.

 

Tullett Prebon, the world's second largest inter-dealer broker, set up China's first money broker in December 2005 with Shanghai International Trust and Investment Corp, a government-owned investment firm.

 

The world's biggest inter-dealer broker ICAP and an arm of the central bank launched China's second money brokerage last September.

 

(China Daily January 30, 2008)