Deals
Hong Kong's Thriving Broker Bazaar Hit After Regulators Step In
- Chinese acquirers have bought about 20% of H.K.’s brokers
- SFC has tightened scrutiny of the practice amid concerns
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Chinese firms splashed out on purchases of Hong Kong brokerages in recent years to get a foothold in the former British colony. That wave is ebbing after regulators tightened scrutiny of the practice.
Buying Hong Kong-licensed asset managers, brokers or corporate advisers made sense for ambitious Chinese companies seeking a bridgehead outside of the mainland’s capital controls and helped them burnish their credentials among domestic clients. Around 20 percent of the city’s smaller brokers have been sold to Chinese buyers, who dominate a secondhand market for licensed firms that barely existed five years ago, according to industry veterans.