JPMorgan’s majority-owned Chinese securities business to start operations, as Beijing makes good on liberalisation promise
JPMorgan is the second international lender to get approval in a month after Nomura received its go-ahead in late November. International names will redraw the landscape of China’s securities industry, Shanghai financial services firm says
Beijing has given US bank JPMorgan Chase the go-ahead to start operating its majority-owned joint-venture in mainland China.
Following the approval by top watchdog China Securities Regulatory Commission (CSRC) on Wednesday, the bank can formally offer international and mainland clients a set of services ranging from brokerage and securities underwriting to investment advisory.
JPMorgan is the second international lender to get approval in a month after Japanese financial services company Nomura received its go-ahead in late November.
“We will continue to invest in and fully support our business in the country, which has become a critical market for many of our domestic and global clients,” Jamie Dimon, JPMorgan’s chairman and chief executive, said in a statement.
Beijing, under pressure to deregulate its financial sector amid the ongoing US-China trade war, has since last year quickened the opening up of the sector. In April 2018, it pledged to lift investment caps to allow foreign brokerages majority control of their mainland joint ventures, as it responded to demands by the US to open its onshore financial services market.
Before the policy relaxation, holdings by foreign investors were capped at 49 per cent. In December 2018, UBS became the first foreign bank to receive approval for its majority-owned joint venture. Three months later, it was joined by JPMorgan and Nomura, who got the nod from regulators to start the process of setting up their majority-owned securities ventures.
“International big names will eventually redraw the landscape of China’s securities industry,” said Wang Feng, chairman of Shanghai-based financial services firm Ye Lang Capital. “A further opening up of the mainland stock market is attracting more international investors, who will prefer brokerage, asset management and advisory services by established foreign institutions.”
Beijing has been widening foreign investors’ access to A shares by introducing stock connect schemes, and further relaxing rules under its qualified foreign institutional investor programme.
After the market close on November 26, global indices compiler MSCI lifted the weighting of A shares in its benchmark gauges for a third time in 2019, which is estimated to have attracted fresh inflows of US$7 billion into mainland equities from global investors.
JPMorgan’s majority-owned securities venture, in which the US bank holds a 51 per cent share, is headquartered in Shanghai. Its offices are located in Shanghai Tower, in the Lujiazui finance and trade zone. Its Chinese partners include Shanghai Waigaoqiao Free Trade Zone Group and four other local investment firms, which have a combined 49 per cent stake.
Nomura said in November that its ultimate goal was to develop its mainland Chinese securities business into a full-fledged brokerage that will form a core part of its strategy in Asia.
Following the approval by top watchdog China Securities Regulatory Commission (CSRC) on Wednesday, the bank can formally offer international and mainland clients a set of services ranging from brokerage and securities underwriting to investment advisory.
JPMorgan is the second international lender to get approval in a month after Japanese financial services company Nomura received its go-ahead in late November.
“We will continue to invest in and fully support our business in the country, which has become a critical market for many of our domestic and global clients,” Jamie Dimon, JPMorgan’s chairman and chief executive, said in a statement.
Beijing, under pressure to deregulate its financial sector amid the ongoing US-China trade war, has since last year quickened the opening up of the sector. In April 2018, it pledged to lift investment caps to allow foreign brokerages majority control of their mainland joint ventures, as it responded to demands by the US to open its onshore financial services market.
Before the policy relaxation, holdings by foreign investors were capped at 49 per cent. In December 2018, UBS became the first foreign bank to receive approval for its majority-owned joint venture. Three months later, it was joined by JPMorgan and Nomura, who got the nod from regulators to start the process of setting up their majority-owned securities ventures.
“International big names will eventually redraw the landscape of China’s securities industry,” said Wang Feng, chairman of Shanghai-based financial services firm Ye Lang Capital. “A further opening up of the mainland stock market is attracting more international investors, who will prefer brokerage, asset management and advisory services by established foreign institutions.”
Beijing has been widening foreign investors’ access to A shares by introducing stock connect schemes, and further relaxing rules under its qualified foreign institutional investor programme.
After the market close on November 26, global indices compiler MSCI lifted the weighting of A shares in its benchmark gauges for a third time in 2019, which is estimated to have attracted fresh inflows of US$7 billion into mainland equities from global investors.
JPMorgan’s majority-owned securities venture, in which the US bank holds a 51 per cent share, is headquartered in Shanghai. Its offices are located in Shanghai Tower, in the Lujiazui finance and trade zone. Its Chinese partners include Shanghai Waigaoqiao Free Trade Zone Group and four other local investment firms, which have a combined 49 per cent stake.
Nomura said in November that its ultimate goal was to develop its mainland Chinese securities business into a full-fledged brokerage that will form a core part of its strategy in Asia.
