Huafu Securities was approved to set up an asset management subsidiary, and securities firms rushed to enter the asset management business

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Brokerages continue to make efforts to deploy asset management subsidiaries.

Blue Whale Finance paid attention to the fact that recently, Huafu Securities was approved to set up an asset management subsidiary, which is also the fifth brokerage asset management institution to land this year. Up to now, the number of asset management subsidiaries of securities companies has increased to 30.

In May last year, the China Securities Regulatory Commission (CSRC) implemented the policy of "one participation, one control and one license", and in order to grasp business opportunities, accelerate the development and transformation of asset management business, and gather active management, securities firms actively deployed asset management subsidiaries. However, under the strong control of supervision, it is not easy to successfully enter the market, and at present, CICC, China Securities Construction Investment, Huachuang Securities, Dongxing Securities, Guohai Securities, Cinda Securities and other securities companies are still in the queue.

Huafu Securities carried out internal structure reform during the year

From the point of view, the layout of Huafu Securities lasted 9 months from the application for establishment to the approval. In April this year, Huafu Securities formally submitted an application to the China Securities Regulatory Commission for the establishment of an asset management subsidiary; in July, the China Securities Regulatory Commission issued feedback; in December, the China Securities Regulatory Commission approved the establishment of an asset management subsidiary of Huafu Securities to engage in securities asset management business.

According to the approval documents of the China Securities Regulatory Commission, the asset management subsidiary of Huafu Securities is registered in Fuzhou City, Fujian Province, with a registered capital of 200 million yuan, which is a wholly-owned subsidiary of Huafu Securities, and its business scope is securities asset management business.

Huafu Securities is a financial state-owned enterprise in Fujian Province, established in August 1988, and is one of the first securities companies established in mainland China. It should be noted that in the first half of the year, Huafu Securities ushered in a "change of leadership" and a major adjustment of the internal structure to complete the company's top-level design reform.

In January this year, Huang Jinlin applied for resignation as chairman of Huafu Securities, and President Huang Deliang performed the chairman's duties on his behalf. In March, Huafu Securities ushered in the new chairman Su Junliang. Su Junliang has successively served as Secretary of the Party Committee and President of Nanning Branch, Fuzhou Branch and Hangzhou Branch of Industrial Bank, and is currently a member of the Party Committee and Deputy General Manager of Fujian Financial Investment and Secretary of the Party Committee of Huafu Securities, with more than 30 years of experience in the industry, and is an out-and-out "financial veteran".

In terms of internal structure reform, Huafu Securities has set up three first-level departments in the wealth business department: customer group development department, product management department and digital platform department, among which the customer group development department is a new first-level department to make up for the company's lack of specialized wealth customer group management department at the headquarters level, and with the product management department and the digital platform department as the "two wings", it provides diversified products and a new generation of digital intelligence services around customer group management, and is committed to meeting the differentiated needs of different types of customers.

Regarding the adjustment of wealth management business, Huang Deliang, president of Huafu Securities, said in a media interview in October this year, "Wealth management business is the basic market of brokers. Wealth management business is the ballast stone of Huafu Securities' business, and this round of adjustment is to expand and strengthen the wealth management business and build a moat for Huafu Securities' wealth management business. ”

Huang Deliang explained that the reform of the internal structure is not only the need to respond to changes in the external environment, but also the inevitable requirement for the implementation of the company's development strategy. The company's wealth management business will carry out strategic changes in three directions: first, from sell-side sales to buy-side investment advisory, from the three levels of concept, business and team, second, from branch-led to headquarters-driven, and strengthen the headquarters capabilities at the customer, product, and digital intelligence levels, and third, from staking to intensive farming, implementing business focus, network rectification and personnel optimization, and improving the average yield of the network.

The establishment of asset management subsidiaries by securities firms is conducive to the current layout and development on both the policy side and the business side. "The establishment of asset management subsidiaries by securities companies is in line with regulatory policies and industry development trends, which is conducive to improving business operation efficiency, accelerating business transformation, focusing on active management, improving customer wealth management service capabilities, and enhancing market competitiveness. Cinda Securities said.

Some industry insiders also pointed out that the business model of the asset management industry is clear and intellectually intensive, which is suitable for flatter organizations, and the overall structure is close to the public offering, which is more conducive to improving operational efficiency. The establishment of an asset management subsidiary by a brokerage firm also means that it can issue its own products and keep customers in its own system.

Brokerage companies "grabbed" public offering business

At present, 30 asset management subsidiaries of securities companies have been approved for establishment. Since the beginning of this year, five asset management subsidiaries of Great Wall Asset Management, Huaan Asset Management, Guolian Asset Management, Guosen Asset Management and Huafu Asset Management have been approved for establishment, and a number of securities companies are also "running" into the market.

Recently, the China Securities Regulatory Commission (CSRC) accepted an application from Capital Securities to set up an asset management subsidiary. Including Capital Securities, there are 7 securities firms that are queuing up to apply for the establishment of asset management subsidiaries, as well as CICC, China Securities Construction Investment, Huachuang Securities, Dongxing Securities, Guohai Securities, Cinda Securities, etc.

In May 2022, the China Securities Regulatory Commission (CSRC) issued the Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Managers, which clarified that securities firms can develop public offering business by applying for the establishment of asset management subsidiaries, public fund companies, and participating in the holding of public fund companies. Under the policy incentive, the asset management subsidiaries of securities companies have been accelerating on the road of public offering transformation.

The establishment of an asset management subsidiary is an important node in the transformation of the asset management business of a securities company, but it is not easy to obtain a license under the assessment of a number of regulatory indicators. It is understood that business closure plans, intra-industry competition, asset management business violations, and senior management settings are the main issues that regulators are concerned about. Some brokerages have been queuing for more than 2 years and have not yet been approved.

From the perspective of the industry, the acquisition of public offering "licenses" is an important starting point for securities companies to accelerate the layout of wealth management business. At present, securities firms can obtain public offering licenses in three ways: one is to directly apply for the establishment of a fund company, the other is to obtain a minority stake or controlling stake in a fund company through equity transfer, and the third is to obtain a public offering license through its asset management company, or directly apply for public offering business qualifications.

According to data from the Asset Management Association of China, the stock of private asset management products of securities companies and their asset management subsidiaries has gradually decreased from about 7.69 trillion yuan at the end of 2021 to 5.51 trillion yuan at the end of September 2023. With the continuous decline in the scale of private asset management, public offering business has become a key factor in the business transformation of securities asset management institutions.

Most securities firms are applying for the establishment of asset management subsidiaries to lay out public offering business. At present, there are only 14 securities firms and securities asset management companies that have obtained public offering qualifications. In July this year, China Merchants Asset Management, a wholly-owned subsidiary of China Merchants Securities, was approved for the public fund management business, followed by China Industrial Securities Asset Management. According to the official website of the China Securities Regulatory Commission, there are currently four securities companies including GF Asset Management, CES Asset Management, Anxin Asset Management, and Guojin Asset Management queuing up to apply for public offering licenses.

Dongxing Securities Research Report pointed out that under the requirements of the new regulations on asset management, all kinds of asset management institutions in the market have achieved competition on the same stage, which requires securities companies to improve their active management capabilities. It is necessary to respond to business transformation by following the regulatory trend to promote the public offering transformation of large collection products, deeply participating in the public offering market, and actively applying for public offering licenses.