OVERSEAS shareholders of futures brokerages must be reputable institutions with outstanding performance, the securities regulator said Friday, as it prepares to open up the sector to majority foreign ownership.

Senior managers of foreign-invested futures brokerages must also be based in China, while at least one-third should be Chinese nationals, the China Securities Regulatory Commission (CSRC) told a news conference in Beijing, citing newly published draft rules.

The rules, which are circulated for public consultation, come after China last April said it would further deregulate its financial industry, raising the foreign ownership ceiling to 51 percent in securities firms, mutual fund houses, life insurers as well as futures brokerages. All ownership restrictions will be scrapped in three years’ time.

Currently, several foreign banks, including Royal Bank of Scotland Group and JPMorgan Chase & Co., own minority stakes in Chinese futures brokerage ventures.

CSRC on Friday also published draft rules to better regulate overseas expansion by Chinese brokerages and asset managers.

Some companies are expanding their businesses blindly, while others have complicated structures that make internal management difficult, CSRC said, urging them to streamline their overseas businesses.

(SD-Agencies)