"New 11" unpacking: 4 related to the insurance industry,



As China accelerates the opening of the capital market at a high level, the financial industry will open its doors in more segments. As an increase, foreign capital will play an important role in China's financial reform. On July 20, the Office of the Financial Stability Development Committee of the State Council issued “11 Relevant Measures on Further Expanding the Opening of the Financial Industry” (hereinafter referred to as “New 11 Articles”). It will be scheduled to cancel the time limit for foreign stocks of securities companies, fund management companies and futures companies in 2021 to 2020. These include “encouraging foreign financial institutions to participate in the establishment, investment in commercial bank financial management subsidiaries”, “allowing overseas asset management institutions and Chinese banks or subsidiaries of insurance companies to jointly establish wealth management companies controlled by foreign parties”. At the same time, it further facilitates the investment of foreign institutional investors in the inter-bank bond market. The pace of foreign-invested institutions entering the wealth management market has once again accelerated, and the drawings of the opening of the financial market have been further rolled out.

Small and medium-sized banks can use the "foreign shareholders" to bend over the road

The financial industry is opening up to the "new 11 articles" for the first time, allowing overseas asset management institutions and Chinese banks or insurance companies The subsidiary company jointly establishes a wealth management company controlled by the foreign party.

This is also a new category of financial institutions. It is understood that at present, China's Chinese banks and insurance companies, including financial management subsidiaries, are less established and less experienced than international advanced asset management agencies. The business of Chinese-funded banks, insurance companies and foreign-invested advanced asset management institutions is mainly based on cooperation.

A state-owned big banker said in an interview with a Beijing Commercial Daily reporter that "the establishment of a foreign-funded wealth management company with a foreign-invested shareholder is a positive for the bank's research and development of the Bank's wealth management products. The introduction of foreign capital to wealth management products. Positioning and targeting are very helpful."

At the specific implementation level, the spokesperson of the China Insurance Regulatory Commission disclosed that “allowing overseas asset management institutions and Chinese banks or subsidiaries of insurance companies to jointly establish a wealth management company controlled by foreign parties, the pilot can be piloted in the early stage. In this way, priority is given to supporting mature and mature wealth management institutions recognized in foreign markets, which can raise all RMB funds as well as long-term funds in some foreign currencies.

Although the regulators explicitly encourage the establishment of foreign-controlled financial management companies, it is necessary to see the specific business scope, investment restrictions, and supervision of such financial institutions.The indicators have not yet been developed.

He Nanye, a special researcher at Suning Financial Research Institute, believes that for supervision, foreign shareholders who have the upper limit of foreign ownership, the requirements for registered capital, and the conditions for foreign shareholders can act as the initiator and foreign-controlled business. Whether the scope is completely consistent with the business of the Chinese holding company has to be clarified.

The spokesperson of the China Insurance Regulatory Commission said that the introduction of foreign financial institutions with expertise and international influence in wealth management, investment in the bank financing subsidiary, is conducive to the introduction of advanced and mature investment ideas in the international asset management industry. The business strategy, incentive mechanism and compliance risk control system will further enrich the supply of financial products, stimulate the vitality of market competition, and promote the healthy and orderly development of China's bank wealth management business.

In fact, the “Management Measures for Commercial Banking Financial Subsidiaries” promulgated in December 2018 has reserved space for overseas financial institutions to invest in financial management subsidiaries: “Bank financing subsidiaries can be wholly-owned by commercial banks. If it is established, it can also be jointly established with domestic and foreign financial institutions and domestic non-financial enterprises."

This financial industry has opened up the "new 11 articles" again, encouraging foreign financial institutions to participate in the establishment and investment of shares. Bank financing subsidiary.

“Introducing foreign shareholders requires a lot of preparations such as coordination and communication. The process is more complicated and the time is more uncertain. At present, all major banks are fully capable of operating a wholly-owned financial management. Subsidiaries, the demand for the introduction of foreign shareholders is not high." He Nanye said.

A city commercial bank's asset management department also told the Beijing Business Daily reporter: "First, foreign-funded companies and Chinese-funded companies face the problem of cultural differences between China and the West. Secondly, in product development and investment, The national conditions, national policies, and financial supervision systems faced by capital companies and foreign-funded companies are different. How foreign-funded companies develop R&D-appropriate net-type wealth management products with relatively few types of domestic wealth management products is quite difficult."

With the deepening of the process of opening up to the outside world, foreign financial institutions are constantly developing in China, and the transaction structure and business model of China's financial market will be more complicated. Compared with big banks, small and medium banks face no problem in setting up financial management subsidiaries. With less difficulty, can small and medium-sized banks that "dance with the elephants" borrow the power of shareholders to achieve overtaking?

ChineseDong Xiwei, vice president of Chongyang Financial Research Institute of Minsheng University, told the Beijing Business Daily that with the support of regulatory policies, the small and medium-sized bank financial management subsidiaries can cooperate with foreign financial institutions to introduce advanced management experience models and funds from foreign financial institutions. At the same time, it can also cooperate with domestic Internet companies, including private enterprises, with more options and greater cooperation space.

He Nanye believes that the extensive development of the financial industry has passed, and the future head effect will only become more and more obvious. He stressed that "for most small and medium-sized banks, because of their obvious gaps in credit, capital, talents, and shareholder backgrounds, even with the advantage of foreign shareholders, it is difficult to achieve cornering overtaking in the short term."

"At the same time, cooperating with foreign banks to handle financial subsidiaries, if Chinese-funded, the foreign bank shareholders may not be willing to invest resources in all directions; if foreign-controlled, this means the right of Chinese banks to speak And the income has dropped sharply, it is more difficult to talk about overtaking in the corner. The only possibility is to cooperate with the foreign shareholders to handle the financial subsidiary, which can realize the overtaking of a certain segment of the business and achieve a competitive advantage in a certain segment. And expand the market share of the business. It is very difficult to achieve a competitive advantage in all directions." He Nanye said. Beijing Commercial Daily reporter Meng Fanxia Song Yitong

The increase in the threshold for the increase of domestic insurance companies

Currently, among the existing 28 foreign life insurance companies, except AIA, Zhonghong Life Insurance, Zhongde An Due to historical reasons, the joint venture life insurance company's shareholding ratio did not exceed 50%. At the same time, foreign insurance companies that require supervision to apply for the establishment of an insurance company shall have six conditions for operating insurance business for more than 30 years and total assets of not less than US$5 billion at the end of the previous year. In addition, according to the regulations, domestic insurance companies shall not hold less than 75% of the shares of the insurance asset management company.

On July 20th, the above restrictions were loosened one by one. A few days ago, the Office of the Financial Stability Development Committee of the State Council announced that 11 of the 11 measures to further expand the financial opening up were related to the insurance industry.

Specifically, the transition period for the increase of personal insurance foreign capital stocks from 51% to 100% will be advanced from 2021 to 2020; cancel the domestic insurance companies to hold the shares of the insurance asset management company in total. No less than 75% of the regulations, allowing foreign investors to hold sharesMore than 25%; relax the entry conditions for foreign insurance companies, cancel the 30-year business life requirements; allow overseas asset management institutions to establish joint ventures with Chinese banks or insurance companies to establish wealth management companies controlled by foreign parties.

In fact, the insurance industry’s spree for foreign insurance institutions is not the first. Among the measures to expand the opening up of the financial industry released on April 11 last year, there are also four restrictions on the insurance industry, including the personal insurance company's foreign shareholding ratio is relaxed to 51%, no longer set limits after three years; allow qualified foreign countries Investors come to China to operate insurance agency business and insurance public valuation business; release the business scope of foreign insurance brokerage companies, consistent with Chinese-funded institutions; full cancellation of foreign-invested insurance companies requires the establishment of two-year representative office requirements.

From the current point of view, the results of the opening-up measures issued by the supervisors have successively landed, and the strong foreign capital has quickly rushed to the Chinese market. For example, on April 27th, Willis Insurance Brokerage Co., Ltd. became the first foreign-invested insurance brokerage institution in China to be allowed to expand its business scope. The company's shareholders are one of the world's three largest insurance brokerage groups, the Weilai Group of the United Kingdom; on May 2, the work Yin Ansheng Life Insurance was approved to build the Industrial Bank Ansheng Asset Management Co., Ltd.

In addition, on November 23, 2018, Allianz Insurance Group was approved to establish the first foreign insurance holding company in China. Founded in 1890, Allianz Insurance Group is 129 years old and is one of the largest insurance groups in the world.

The Beijing Business Daily reporter interviewed a number of Chinese-funded insurance companies. The other party said that due to the small proportion of foreign-invested insurance companies, it will not cause significant changes in the market in the short term.

Hao Yansu, director of the China Insurance Market Research Center of the Central University of Finance and Economics, said that since 2000, the share of foreign life insurance companies in the market has been around 5%, and there are also foreign-funded foreign life insurance companies out of the Chinese market. Domestic life insurance companies are familiar with national conditions, people's feelings and domestic markets, and are growing rapidly. Faced with the absolute advantage of China's life insurance market at home, even if the current ratio of foreign life insurance companies is removed, the proportion of foreign life insurance companies may increase, but because its business scope is mainly concentrated in the highly competitive central cities, take the high-end route. Business increments are still limited.

The threshold for foreign investment in the insurance market has been lowered, and it seems to further stimulate the vitality of the insurance market in terms of experts and supervision.

For the time limit for canceling the personal insurance foreign capital ratio limit ahead of 2020, Zhu Junsheng, deputy director of the Insurance Research Office of the Financial Research Institute of the Development Research Center of the State Council, said that with the liberalization of foreign-funded life insurance companies, foreign investment The life insurance industry will be more flexible in its organization and will greatly enhance the flexibility and freedom of foreign life insurance companies, which will help to increase their enthusiasm for expanding the Chinese insurance market.

Regarding the liberalization of the proportion of foreign ownership of insurance asset management companies, the Banking Regulatory Commission stated that it is conducive to absorbing the experience of foreign insurance institutions and stimulating the vitality of the domestic insurance asset management market and promoting the assets of insurance asset management companies. Management ability to better serve the preservation and appreciation of insurance assets.

In addition, the cancellation of the 30-year business life requirement for foreign insurance companies with operational characteristics and expertise but insufficient business years has created conditions for China. Wang Xiangnan, secretary general of the Research Center for Insurance and Economic Development of the Chinese Academy of Social Sciences, said that This initiative will enrich China's insurance products and services and benefit consumers.

From a business perspective, a business executive of a joint venture insurance company told the Beijing Business Daily that European and American insurance financial institutions have more experience in management, and the number of foreign insurance institutions entering the Chinese market is gradually increasing. The demand for practitioners in the market will be higher, and the resulting competitive pressure will be greater. However, from the perspective of the industry, it is a good thing to raise the threshold of insurance agents.

Li Yu, a senior insurance broker, said that in the short-term, foreign-invested insurance companies may create obvious advantages in products and services to gain market recognition, such as health care. , pension insurance and investment and wealth management products, etc., because of the experience and advantages of international operation management, may bring a small impact to domestic insurance companies. Beijing Commercial Daily reporter Meng Fanxia Li Yujie

foreign investment in securities companies has been recruited

On July 20, the Office of the Financial Stability Development Committee of the State Council announced a series of policy measures for further opening up of the financial industry, including the original It is scheduled to cancel the time limit for foreign stocks of securities companies, fund management companies and futures companies in 2021 to 2020.

The relevant person in charge of the CSRC said that in recent years, the CSRC has accelerated the opening of the capital market to a high level. 2In 018, China announced that it would relax the restrictions on foreign investment in joint venture securities, fund management and futures companies to 51%, and no longer set limits after three years. At present, the policy of relaxing foreign-invested shares to 51% has been implemented. The CSRC issued and implemented the Administrative Measures for Foreign-invested Securities Companies and the Measures for the Administration of Foreign-invested Futures Companies in 2018, and has successively approved the establishment of four Foreign-controlled securities companies and fund management companies.

It is understood that there are currently three foreign-controlled brokers in China, namely UBS Securities, JPMorgan Securities (China) and Nomura Oriental International Securities. In addition, in recent months, joint venture brokers have frequently reported new developments, and foreign-controlled brokers are expected to add new troops.

On July 10, the official website of the China Securities Regulatory Commission showed that the materials of Credit Suisse Founder Securities "the approval of the actual controller of the securities company to change the equity of more than 5%" was received by the Securities and Futures Commission, before the news on April 15th, Switzerland Credit intends to increase capital by 628 million yuan to Credit Suisse Founder Securities. After the capital increase is completed, Credit Suisse's shareholding in Credit Suisse Founder Securities will increase from 33.3% before the capital increase to 51%, which will become the controlling shareholder of the latter.

In June this year, Huaxin Securities made a new development in the public transfer of 2% equity of Morgan Stanley Huaxin Securities. The industry generally believes that Huaxin Securities took the initiative to give up the controlling stake, which is to pave the way for foreign shareholders, Morgan Stanley to obtain a controlling stake. If Morgan Stanley earns this 2% stake, its shareholding ratio will rise from 49% to 51%, achieving the holding of Morgan Stanley Huaxin Securities.

The work of foreign-invested securities companies to recruit and buy horses is in full swing. Since 2019, three brokers have intensively issued recruitment announcements. The main positions for recruitment include investment banking, wealth advisory, compliance, and information technology.

In the opinion of analysts, the acceleration of the distribution of domestic markets by foreign institutions will have little impact in the short term, but there may be a risk of talent flow in the long run. In addition, the entry of foreign-funded securities firms into China will lead to a large-scale squid effect, and adapting to foreign capital “new play” will be the new normal in the future financial industry competition.

Up to now, there are 13 brokerage firms with foreign ownership structure in China, including CICC, BOC International, Goldman Sachs Gaohua, UBS Securities, Credit Suisse Founder, Sino-German Securities, Morgan Stanley Huaxin , JP Morgan Chase Securities (China) and Nomura Oriental International Securities, HSBC Qianhai Securities,East Asia Qianhai Securities, Shenzhen Stock Exchange and Huajing Securities.

A non-bank analyst of a medium-sized brokerage in the north pointed out that the speed of foreign investment in China will further intensify competition in the domestic securities industry, especially in the high-end business and cross-border business. “Investment and FICC (Fixed Income Securities, Monetary and Commodity Futures) businesses may be the most competitive areas for foreign brokers, but they are also more affected by domestic regulatory policies.”

Northeast Securities Research Director Fu Lichun According to the Beijing Business Daily reporter, the speed of joint venture brokerage is not very fast. It is not realistic for foreign brokers to achieve full-scale competition and large-scale expansion with local brokers. Foreign brokers are still facing policies, capital, and local Restrictions on resources, business singularity, customer acquisition costs, foreign exchange controls, etc.

Beijing Commercial Daily reporter Meng Fanxia Ma Wei

The difficulty of rating agencies is difficult to be resolved

In the financial industry announced this time, "New 11 The first article is “When foreign-invested institutions are allowed to carry out credit rating business in China, they can rate all types of bonds in the inter-bank bond market and the exchange bond market”.

In fact, the credit rating industry has been steadily advancing to the outside world in recent years. In September 2018, the central bank and the China Securities Regulatory Commission jointly issued an announcement that a rating agency that has already carried out rating business in the inter-bank or exchange bond market will establish a green channel to achieve mutual recognition of rating business qualifications. In January 2019, S&P Credit Rating (China) Co., Ltd. was allowed to enter the Chinese inter-bank bond market to conduct all types of credit rating services including financial institution bonds and non-financial corporate debt financing instruments.

He Nanye, a special researcher at Suning Financial Research Institute, said that the credit rating business is fully open to the outside world, which will help promote the competition of China's rating business and allow the market to continue to survive the fittest. At the same time, the introduction of rich foreign rating experience to improve the accuracy of China's bond rating. In addition, it can also guide China's rating business rules, systems, methods, etc. to continuously integrate with the international advanced, so that China's bond rating market is more perfect.

It is understood that the operation mode of the foreign rating system is quite different from that in China. A senior bond researcher pointed out that the current domestic rating method is still very extensive, and the company’s right to speak is very large;This is not the case, the neutrality is stronger, and the rating dimension is more diversified. This approach may lead to differences in the charging model, due diligence method and domestic rating agencies.

At the same time, some analysts pointed out that the current ratings of Chinese domestic companies are generally concentrated in AA+ and AA, and the S&P, one of the three major rating agencies, is an example of BBB-above in its public rating system. Investment-grade standards, which are rare in domestic public ratings. This also means that the entry of foreign-rated rating agencies into the Chinese market faces the localization challenges of rating methods and systems. It is reported that S&P recently assessed ICBC Financial Leasing Co., Ltd. as the main credit rating of AAA, with a stable outlook. The company said it has set a set of rating standards for the Chinese domestic market.

Will the full opening of foreign-rated rating agencies cause a strong “squid effect”? He Nanye believes that China's current rating is mainly the issuer's payment model. Under this model, as Chinese-level rating companies tend to charge lower fees, issuers may prefer Chinese-rated companies if they consider cost reductions. Therefore, in the short term, the impact of foreign-rated rating agencies entering China on Chinese-language rating agencies is relatively weak. However, with the frequent occurrence of default bond events, investors need a more authoritative rating agency to rate bonds. At the same time, with the expansion of China's bond market investors, more and more foreign institutional investors will be introduced. These foreign investors will also agree with the rating opinions issued by foreign rating agencies. The issuers will be more willing to increase the ease of bond sales. Spending money to hire foreign-rated companies to rate, this will have a competitive impact on the rating business of Chinese institutions.