Hong Kong could benefit from a plan by Beijing to lower thresholds for the mainland's securities firms to establish overseas units in an effort to ease competition in the domestic industry.
The China Securities Regulatory Commission (CSRC) is also contemplating a trial to allow Hong Kong, Macau and Taiwanese financial institutions to hold a stake of as much as 51 per cent in mainland securities firms in Shanghai, Shenzhen and other designated cities.
"China is considering easing requirements to encourage more mainland securities companies to set up offshore units in Hong Kong," the Shanghai Securities News quoted CSRC official Ouyang Changqiong as saying. "Relevant easing policies have been amended after consultation, such as a drop in net asset requirement for Chinese financial companies."
He said the regulator would soon make an announcement.
Meanwhile, industry participants have been lobbying the watchdog for favourable terms when they venture overseas because the domestic capital market is crowded with competitors.
Yim Fung, the vice-chairman and chief executive of Guotai Junan International, a Hong Kong-listed mainland financial institution, said: "The discussion with the CSRC has been ongoing for some time. Facing tough operating conditions at home, market participants hope to expand in Southeast Asia."
The top seven investment banks on the mainland accounted for 80 per cent of gross listing revenue last year, when 150 firms raised a combined 93 billion yuan (HK$116 billion) through public offerings in Shanghai and Shenzhen, down more than half from the previous year.
Turnover in Shanghai also dropped sharply as the benchmark index was underwater most of the time.
Yim said mainland financial firms planned to offer investment banking, asset management and broking services in Singapore, India and Indonesia.
He said Beijing was speeding up development of the domestic capital markets by allowing Hong Kong, Macau and Taiwanese businessmen to hold bigger stakes in securities houses.