HSBC Sets Up CCP Committee on Brokerage Branches in China

According to the report on Thursday, citing insider sources, HSBC has set up Chinese Communist Party (CCP) committee in its brokerage department in mainland China.

 Insiders informed the media that the committee would not have any management role like that in state-owned enterprises in Communist China.

 HSBC did not immediately respond to a request for comment.

 As reported, in light of Chinese company law, it requires installment of a CCP committee in each enterprise, but the law has not been widely implemented in foreign financial groups. The committee has a dual role as a union for workers and a means for party representatives to gain access to the company’s top ranks, sometimes serving as directors or management positions.

 HSBC’s decision comes after the London-based headquarter raised its stake in the Chinese brokerage joint venture to 90% from 51% in April.

 It is reported that the move would put pressure on other foreign banks in mainland China to follow suit. However, insider sources said only HSBC has installed a CCP branch so far.

 As quoted several senior figures at these institutions saying that some has been examining the necessity for this move after taking full ownership of their mainland securities and brokerage business in the past two years.