June 26 (Bloomberg) -- HSBC Holdings Plc, Europe’s biggest bank, and Citigroup Inc. won approval from China’s securities regulator to sell domestic mutual funds, expanding their scope of financial services in the local market.
HSBC Bank (China) Co. received permission from the China Securities Regulatory Commission today and will introduce fund products “soon,” the lender said in an e-mailed statement. Citigroup will cooperate with seven fund management companies including China Asset Management Co., the third-biggest U.S. bank said. Bank of East Asia Ltd. said today it’s also among the first batch of foreign banks to win the permission.
The regulator in February allowed brokerages and insurers to sell mutual funds to the public as the government seeks to increase the role of institutional investors and attract more money into the country’s capital markets. The benchmark Shanghai Composite Index has tumbled 14 percent this year as the Chinese economy cooled, even as the number of securities funds jumped 12 percent to 1,317 as of May 1, according to CSRC data.
“This product offering not only supplements the existing range of wealth management products offered by foreign banks, but also broadens distribution channels for local funds,” Helen Wong, president and chief executive officer of HSBC China, said in the statement.
HSBC will initially offer local fund products managed by HSBC Jintrust Fund Management Co., its local joint venture, before partnering with other fund houses later this year, the bank said.
New York-based Citigroup in August became the first Western bank to issue credit cards in China without co-branding from a local financial institution as the government relaxes restrictions.
China has 81 fund companies managing assets worth 3.98 trillion yuan ($647 billion), with the 1,317 mutual funds accounting for 3 trillion yuan, HSBC said, citing data from the Asset Management Association of China.
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