China Pledges to Allow More Foreign Ownership of BrokeragesBloomberg News
China says it will raise 49% cap but gives no timetable
Regulator said in 2015 that it would study more opening
China said it’s committed to letting overseas banks own bigger stakes in securities and fund-management joint ventures in the nation, in a statement that was released after financial and economic talks this week with the U.K.
A 49 percent ownership limit will gradually be raised, the Ministry of Finance said in a statement Friday, without saying when or by how much. Foreign investors’ participation can boost the industry’s competitiveness and global influence, it said.
China also pledged to help companies increase investment in the U.K and support London as an offshore yuan center.
China was considering sweeping changes to its securities industry to let foreign banks control joint ventures and broaden their offerings, people with knowledge of the matter told Bloomberg in March last year. Regulators planned to give foreign-owned joint ventures permission to expand into areas beyond stock and bond underwriting, the people said at the time.
In response to the Bloomberg article, the China Securities Regulatory Commission said that it would study further opening the securities and futures industry, after already letting Hong Kong and Macau companies take control of their ventures under economic partnership agreements.
Loosening restrictions will let foreign banks more effectively compete with incumbents such as Citic Securities Co. in Asia’s largest equities market. Greater foreign participation could also help China develop its securities industry, more than a decade after Goldman Sachs Group Inc. set up a joint venture in Beijing.
— With assistance by Jun Luo, and Cathy Chan