Citigroup Wins Approval to Establish Securities Firm in China, Moves Toward Licensing
Key Facts
China's securities regulator has approved the establishment of a wholly owned Citi entity to conduct securities activities in China, opening a path for the U.S. bank to expand its services in the local market. The approval covers brokerage, securities investment advisory, underwriting, sponsorship and proprietary trading, according to the regulator's decision. Citi said the new company would provide stock brokerage, underwriting, research and proprietary trading services to local and foreign clients. It added that the entity would complement its existing capabilities outside China and support its corporate and institutional client base in the local market. The approval does not mean the company has begun operating; it must complete its establishment and then obtain a separate license before providing services.
The regulator's decision sets out a broad range of permitted activities, from client-facing brokerage and advisory services to underwriting, sponsorship and proprietary trading. These areas would allow the entity to provide services across different stages of capital markets, according to the list of activities in the approval. Citi said its services would also include research, alongside stock brokerage, underwriting and proprietary trading. The new company, the bank said, would serve local and foreign clients. The expected license forms part of a broader strategy to provide local services to institutional and corporate clients seeking access to China's capital markets.
The start of operations is subject to specific deadlines set by the regulator. The entity must complete its commercial registration within 6 months of the decision, according to the regulatory approval. After the business license is issued, the company must apply for a securities and futures business license within 15 days. The decision bars it from starting operations before that license is issued. The approval is therefore an establishment step ahead of operational licensing and does not immediately grant the company the right to provide brokerage or other services.
The move comes as Citi says it continues to serve Chinese clients through its global presence. The bank said it had helped those clients raise more than 40 billion dollars in global capital markets from the start of 2026 until the approval was announced on October 23. It said the new company would support securities and trading activities in China for its large corporate and institutional client base. Citi's presence in China dates to 1902, according to the bank's announcement, and it said it serves 70% of Fortune 500 companies operating in the country. This established institutional base provides a backdrop to the bank's expansion from serving clients through global markets to offering securities services within China.
The company is entering a market that already includes securities units owned by rival U.S. banks. Goldman Sachs' wholly owned China unit earned 1.46 billion yuan in 2025, nearly three times its previous level, Reuters reported. JPMorgan's unit earned about 984 million yuan in the same year, nearly four times its previous level. These results highlight the scale of activity international rivals have built in the Chinese market. Sources cited by Reuters in September had said Citi planned to add several dozen employees to its unit over the following months, ahead of an expected final regulatory approval soon.
Coverage said the expansion plan targets technology, healthcare, consumer and financial sectors, as well as established Chinese companies and AI and chip startups. That focus aligns with the underwriting, research, brokerage and trading services Citi said it would offer to local and foreign clients. Against the broader market backdrop, China's exports rose 35.2% year over year in October, while imports increased 41.6%, according to data reported by AP. AP attributed the export increase to high-tech goods, including semiconductors and cars. It also linked part of the import growth to a recovery in crude oil shipments from the Gulf.