UBS Securities, a newly formed joint venture created from the restructuring of Beijing Securities, plans to kick off the business as early as March, after relocating its office to a new building in downtown Beijing, the sources said.

Global investment banks are keen to tap China's domestic capital markets, particularly as the government has been encouraging China's largest companies to issue shares in Shanghai or Shenzhen, rather than Hong Kong or New York.

The government has put a freeze on approving new joint ventures, but there is no lack of interest from players like Citigroup, Credit Suisse and JPMorgan, which have expressed interest in setting up their own ventures.

Late last year, UBS won initial approval to invest US$200 million in State-owned Beijing Securities in return for a 20 percent stake and de facto management control of its day-to-day business and operations.

"With the completion of the business registration process, UBS Securities Co Limited is officially established and able to proceed with the requisite license applications for the establishment of its various business lines," said a UBS spokesman in Hong Kong, declining to go into further detail.

One Beijing source close to UBS said the bank was finalizing the last of its business license process.

Asked what type of licenses UBS is still working on, the source replied: "For example, the new company is still awaiting final approval for its underwriting qualifications."

Within its business scope, Beijing-based UBS Securities was already allowed to offer domestic share underwriting services to local clients, a rare opportunity that only about five foreign banks can tap in highly regulated capital markets in China.

But UBS still needs to seek professional underwriting qualifications from the China Securities Regulatory Commission for its top managers who will lead potential domestic fund-raising deals in the near future, the Beijing source said.

"It should be no any problem to get these professional licenses ... It's just a thing of going into procedures," said the source.

Currently, only local brokerages and joint ventures can underwrite local currency A-share listings, which still lag Hong Kong dollar-denominated listings in Hong Kong.

Foreign early birds to the market include Wall Street banks Morgan Stanley and Goldman Sachs.

Morgan Stanley has long had a leg up on most of its global rivals in the Chinese market. In 1995, it bought 34.3 percent stake of the country's first investment bank joint venture China International Capital Corp. (CICC).

Goldman Sachs owns 33 percent of the Beijing-based joint venture Goldman Sachs Gaohua Securities Co, which was established in 2004.

"UBS will become a neighbor of Goldman," said another banking source in Beijing. Goldman is working on at least two big-sized Shanghai initial public offerings for Ping An Insurance and Bank of Communications separately these days.

UBS Securities is inheriting control of about 26 branches from Beijing Securities, which no longer exists.

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