Daiwa Securities SMBC Co. said Wednesday it has been given the green light by the China Securities Regulatory Commission to establish a joint securities house in Shanghai with local brokerage Shanghai Securities Co.

Daiwa Securities SMBC is the first Japanese securities company to establish a brokerage house in China.

It is hoped that the joint company, Daiwa SMBC-SSC Securities Co., will begin operating by the end of this year, said the wholesale brokerage unit of Daiwa Securities Group Inc.

The joint company will be capitalized at about 500 million yuan (around 6.5 billion yen), two-thirds of which will be owned by Shanghai Securities and the remainder by Daiwa Securities SMBC. It will have an initial workforce of around 50.

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