Credit Suisse wins approval for broking in China economic zone

Credit Suisse Group AG's joint venture in China won approval to offer securities brokerage services for the first time, in the economic zone of Qianhai in the southern city of Shenzhen. 

PHOTO: BLOOMBERG

NOV 26, 20152:32 PM

[QIANHAI] Credit Suisse Group AG's joint venture in China won approval to offer securities brokerage services for the first time, in the economic zone of Qianhai in the southern city of Shenzhen.

The venture may start offering the services early next year after the approval by the China Securities Regulatory Commission, Credit Suisse said in a statement Thursday. Set up in 2008 and controlled by local partner Founder Securities Co, the business was previously restricted to capital market services such as underwriting stock and bond offerings.

The boost to Credit Suisse Founder Securities Ltd comes after the earlier setback of the venture's former Chairman Lei Jie- also the former chairman of Founder Securities - going missing in January. He was later released from police custody, a person familiar with the matter said this week. Mr Jie said on Tuesday that he was no longer involved with the joint venture and wouldn't comment further.

Goldman Sachs Group Inc and UBS Group AG, the foreign firms with the longest-established securities joint ventures in China, already offer brokerage services across the country through their local partners. Those firms got their licences before a moratorium on new joint ventures was imposed in 2006.

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Credit Suisse was the first global brokerage to win a license after the nation re-opened the securities industry to foreign participation in 2008. Bank of America Corp. is the only major Wall Street firm without a license.

HSBC Holdings Plc said this month that it would form a majority-controlled securities venture in Qianhai, benefiting from an economic partnership agreement between Hong Kong and the mainland that allows Hong Kong-funded institutions to set up joint venture firms in Shanghai, Guangdong province and Shenzhen. The venture has not received approval yet.

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China regulator orders brokerages to halt OTC swap lending: sources

The China Securities Regulatory Commission (CSRC) has issued window guidance to domestic brokerages requiring them to cease financing clients' stocks purchases using swaps and other over-the-counter derivatives, two sources with direct knowledge told Reuters. 

PHOTO: REUTERS

NOV 26, 20154:48 PM

[SHANGHAI] The China Securities Regulatory Commission (CSRC) has issued window guidance to domestic brokerages requiring them to cease financing clients' stocks purchases using swaps and other over-the-counter derivatives, two sources with direct knowledge told Reuters.

The CSRC did not respond to calls requesting comment.

The move comes after CITIC Securities was discovered to have inflated its swap trading by US$166 billion, which it blamed on an IT upgrade.

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China and Europe test bilateral currency swap operations: PBOC

China's central bank has tested bilateral currency swap operations with the European Central Bank, according to a notice posted on the People's Bank of China (PBOC) website on Thursday. 

PHOTO: BLOOMBERG

NOV 26, 20155:24 PM

[BEIJING] China's central bank has tested bilateral currency swap operations with the European Central Bank, according to a notice posted on the People's Bank of China (PBOC) website on Thursday.

The currency swap deal, signed in October 2013, totalled 350 billion yuan (S$77.14 billion), or 45 billion euros, the bank said. Two currency swap tests were conducted in April and November this year.

Both operations were completed successfully and are a step towards facilitating better trade and investment between China and Europe, the notice said.

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Barclays fined for failings on US$2.9b 'elephant deal'

Barclays was fined 72.1 million pounds (S$153 million) by UK regulators for failing to fully probe a group of "politically exposed" ultra-high-net-worth clients tied to a transaction of 1.9 billion pounds. 

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NOV 26, 20156:36 PM

[LONDON] Barclays was fined 72.1 million pounds (S$153 million) by UK regulators for failing to fully probe a group of "politically exposed" ultra-high-net-worth clients tied to a transaction of 1.9 billion pounds.

The lender executed the so-called elephant deal in 2011 and 2012 for a number of clients, the Financial Conduct Authority said in a statement on Thursday. While the individuals should have been "subject to enhanced levels of due diligence and monitoring", Barclays didn't follow standard procedures, "preferring instead to take on the clients as quickly as possible" and generating 52.3 million pounds in revenue, the FCA said, without disclosing the customers' identity.

The latest fine tied to past misconduct comes as a blow to chairman John McFarlane who's made a "high performance ethic" one of his three priorities as Barclays seeks to restore investor confidence and bolster earnings growth. The London-based bank said on Oct 29 that it doesn't expect costs tied to past misconduct to drop anytime soon, when cutting a profitability target for 2016, partly because of higher redress charges.

"Barclays ignored its own process designed to safeguard against the risk of financial crime and overlooked obvious red flags to win new business and generate significant revenue," Mark Steward, the FCA's director of enforcement, said in the statement. "This is wholly unacceptable." The fine is the largest that has ever been imposed by the FCA and its predecessor for failings tied to financial crime, according to the statement.

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The transaction involved investments in notes backed by underlying warrants and third-party bonds, according to the statement. It was the largest of its kind that Barclays had executed for individuals, the FCA said.

The bank's officials didn't properly scrutinize the source of the clients' funds despite the higher risk of financial crime, the FCA said. Managers failed to understand the crime risks involved and were concerned about how long approval of the deal would take, with one executive saying he wished to "race this through." Barclays' approach was to request information only if it was absolutely necessary and did not want to "irritate" the clients, the FCA said. The managers working on the deal agreed to keep details of the transaction and the identities of the clients confidential, even from colleagues,according to the regulator. If the executives revealed who the wealthy individuals were, they'd have to pay them 37.7 million pounds in compensation, it said.

"The FCA made no finding that Barclays facilitated any financial crime in relation to the transaction or the clients on whose behalf it was executed," the lender said in a statement on Thursday. "Barclays has cooperated fully with the FCA throughout and continues to apply significant resources and training to ensure compliance with all legal and regulatory requirements." Barclays shares rose 1.1 per cent to 223.95 pence at 10:20 am in London. They have dropped about 8 per cent this year.

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China to probe largest brokerage for alleged violation of rules

China to probe largest brokerage for alleged violation of rule 

China's securities regulator will probe Citic Securities Co for alleged rule violations in the latest move against the country's largest brokerage, where some top executives have already been placed under investigation. 

PHOTO: BLOOMBERG

NOV 26, 20157:50 PM

[BEIJING] China's securities regulator will probe Citic Securities Co for alleged rule violations in the latest move against the country's largest brokerage, where some top executives have already been placed under investigation.

The firm received a notice from the China Securities Regulatory Commission on Thursday saying it will be investigated because it allegedly violated regulations on the supervision and administration of securities firms, Citic said in a Shanghai stock exchange statement. The brokerage said it will fully cooperate with the probe and that all of its operations are normal.

President Cheng Boming is among seven Citic Securities executives named by Xinhua News Agency as being under investigation, part of a financial-industry crackdown as the government seeks to assign blame for the nation's summer stock-market rout. Chinese authorities have been discussing the need to punish Citic Securities for its role in the selloff, a person familiar with the matter said last week.

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Lloyds to cut 945 jobs as part of three-year restructuring strategy

Taxpayer-backed Lloyds Banking Group said on Thursday it was cutting around 945 jobs in a restructuring plan first outlined a year ago with the aim of reducing the bank's workforce by 9,000. 

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NOV 26, 201510:44 PM

[LONDON] Taxpayer-backed Lloyds Banking Group said on Thursday it was cutting around 945 jobs in a restructuring plan first outlined a year ago with the aim of reducing the bank's workforce by 9,000.

The staff affected are currently employed within the bank's retail, commercial banking and consumer finance teams, and in several back office divisions, the bank said. "The group's policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group," the bank said in a statement. "Where it is necessary for employees to leave the company, it will look to achieve this by offering voluntary redundancy. Compulsory redundancies will always be a last resort."

It said recognised unions Accord and Unite were consulted prior to the announcement and will continue to be consulted.

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