Goldman Sachs has beefed up its China market-access derivatives business by jump starting onshore trading with joint-venture Gao Hua Securities, according to market insiders. Through a partnership it initiated at the end of last year, a first-of-a-kind in China, Goldman has essentially gained control over the onshore entity and is ensuring that international standards are met. "This ensures greater confidentiality and compliance as well as better execution," said a market official familiar with the arrangement.
Market officials said the JV may give Goldman an advantage over international competitors for the growing access product market because rivals have to deal with stand-alone independent onshore brokers when hedging derivative positions onshore. The U.S. firm could benefit through improved pricing and execution, as well as ensuring compliance issues are handled properly in the developing market which could increase the comfort level for clients, said the official.
