UBS buys majority stake in Pumin Futures

Foreign invested securities firm UBS Securities Co Ltd announced on Monday that it would acquire a majority shareholding in Shanghai Pumin Futures Brokerage Co Ltd, which has a registered capital of 30 million yuan ($4.94 million).

After a capital injection of 90 million yuan, UBS Securities will hold 95.42 percent of Pumin Futures. The application for the equity transfer and capital increase has been approved by the Chinese regulator.

David Li, chairman of UBS Securities, expressed the company's willingness to expand into the Chinese futures brokerage market, which promises strong growth.

He said that, according to the Third Plenary Session of the 18th Central Committee of the Communist Party of China, the Chinese government is encouraging financial innovation and aims to build a multi-layered financial market with more products.

UBS Securities expects new futures products to be introduced into the market soon.

Xia Yang, head of equities at UBS Securities, said that in order to offer the most comprehensive range of services in the secondary market, UBS Securities hopes to make a financial futures brokerage service available to its clients. The service will complement their current offerings, including domestic equity advisory, QFII and RQFII brokerage, electronic trading strategy and execution, as well as OTC derivative, said Xia.

UBS Securities is the first foreign invested securities firm in China with full licenses to conduct businesses, including securities brokerage, securities investment consultancy, financial advisory related to securities trading and securities investment activities. It is also licensed for securities underwriting and sponsoring, securities proprietary trading, securities asset management and distributing financial products.

The company was officially registered in December 2006 with a registered capital of 1.49 billion yuan.

It was established through the restructuring of Beijing Securities. Its six shareholders include UBS AG, Beijing Guoxiang AMC, Guangdong Provincial Communication Group Co Ltd, COFCO, China Guodian Capital Holding and IFC.

China's first financial futures product, The Hushen 300 Index, was launched in April 2010, with a registered trading volume for the year surging to over 41 trillion yuan, representing 26.5 percent of the volume of all futures products.

In 2013, the trading volume including the newly introduced treasury futures, reached 141 trillion yuan, taking up 52.72 percent of the total futures products trading volume.