The Yunnan Province-based broker also proposes to bolster proprietary trading and research capacities of its stock investment department in Beijing, according to people familiar with the matter.

Pacific Securities said on Saturday that it would take over Shanghai-listed Unida Co, a Yunnan Province-headquartered technology firm, through a equity swap for a back-door listing.

The broker early this month restructured itself into a shareholding venture and boosted its registered capital to 1.5 billion yuan (US$194 million) from 733 million yuan through stock placements.

China's stock market watchdog is urging stronger brokerages to sell stocks publicly in a bid to shore up domestic securities players before fully opening the industry to overseas competition.

Nearly a dozen brokers this year said they would list shares either through back-door issues or initial public offerings to raise funds to expand geographically and win regulatory support to conduct new businesses.

"Pacific Securities wants funds and the back-door listing is supported and led by the Yunnan provincial government," said a brokerage source briefed on the matter.

"With net capital growing larger, the firm can apply to start innovative businesses such as managing assets for retail investors and trading financial derivatives."

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