·Domestic institutional demand for broker services is growing
·Prime brokerage will be a key business line for global firms in China
·Challenges for foreign firms remain but opportunities are emerging

Update: Recent regulatory enforcement actions affecting major domestic brokerages and the announcement of HSBC‘s majority foreign-owned joint venture (JV) securities company have shone a light on changes in the mainland brokerage industry. Whilst the industry remains markedly retail-focused compared to global markets, major pockets of demand are forming which certain foreign brokerages are well-placed to exploit. Brokerages’ main source of demand is shifting as more mainland institutional investors have begun to require a broader range of services. Global brokerages can capitalize on this structural change but will need to take into account changes in regulatory approach, as well as competition from domestic brokerages, which are also changing to meet the new demand.

Domestic Chinese brokerage firms are heavily focused on serving……

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