China Guotai J&A looks set to be the first mainland brokerage to receive approval to issue financial bonds as part of a campaign to beef up the securities industry.
Sources said the country's biggest brokerage would sell medium-term debt papers worth three billion yuan (about HK$2.79 billion) to banks to fund its business activities.
Details of the issue were not available.
'Barring unforeseen circumstances, the brokerage will receive the green light for its fund-raising plans shortly,' a source familiar with the proposed issue said.
Beijing previously allowed a few brokerages to issue bonds on a one-off basis, but will change the policy to allow houses to sell debt papers as and when they meet official requirements.
Guotai J&A will be the first to issue the bond under the policy change announced yesterday by the Monetary Policy Committee of the People's Bank of China, the country's central bank.
The committee, which decides the country's monetary policies, also said brokerages could use shares as collateral for bank borrowing, and more would be allowed to borrow from the interbank market.
