HONG KONG, May 9 (Xinhua) -- The Chinese central government will further ease authorization requirements for Hong Kong banks to expand their existing network in the neighboring mainland province of Guangdong, under an expanded economic and trade agreement signed Saturday.
Subsidiaries of a Hong Kong bank in Guangdong shall be able to expand its network not only in the city of registration, but also in other cities in the province without first establishing separate subsidiaries there, according to the Supplement VI to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).
"This will enable the banks to expand their business network, and improve the quality and efficiency of banking services provided to enterprises," said Donald Tsang, chief executive of the Hong Kong Special Administrative Region (HKSAR).
Securities firms in the mainland and Hong Kong shall also be allowed to set up joint venture securities investment advisory companies in Guangdong.
The Hong Kong securities firm can hold up to a third of the stakes in the joint venture companies, according to the supplement agreement, which was signed by John Tsang, financial secretary of the HKSAR government, and the central government's Vice Minister of Commerce Jiang Zengwei in Hong Kong on Saturday.
Qualified mainland securities firms, upon approval by regulatory authorities, can set up subsidiaries in Hong Kong. The introduction of open-end index-tracking exchange-traded fund based on Hong Kong stocks will also be explored in the mainland.
The supplement shall come into effect on Oct. 1 this year, three months ahead of the usual schedule for previous supplements, to help fight the ongoing economic downturn.