Boosted by positive news, Chinese brokerage stocks surged in Hong Kong. HTSC rose 7%; GTHT rose 6%; CITIC SRC and CSC rose 5%; GF SEC, CMSC, and CGS rose 4%.
On December 6, Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), proposed new breakthroughs in the differentiated and specialized development of investment banks at the 8th General Assembly of the China Securities Association. Regulatory policies will "support the good and limit the bad," with appropriate "relaxation" for quality institutions. Wu emphasized that a leading investment bank is not exclusive to top institutions; small and medium-sized institutions should leverage their advantages, develop in niche fields, unique client segments, and key regions, concentrating resources and deepening efforts to create "small and beautiful" boutique investment banks and specialized service providers.
Wu Qing stated that the CSRC will strengthen categorized regulation and "support the good and limit the bad." For quality institutions, the CSRC will relax some restrictions, further optimize risk control indicators, moderately open up capital space and leverage limits, and enhance capital utilization efficiency.
According to Founder Securities, Chairman Wu Qing mentioned that regulatory support includes "appropriate relaxation for quality institutions, further optimization of risk control indicators, moderate opening up of capital space and leverage limits... and exploring differentiated regulation for small and medium-sized brokers and foreign brokers in terms of classification evaluation and business access." This indicates that, following the revision of the "Securities Company Risk Control Indicator Calculation Standards" by the CSRC in September 2024, the regulatory authorities once again explicitly aim to optimize risk control indicators and open up leverage limits. It is expected that subsequent policy implementation will raise the ceiling on ROE for quality brokers.
