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September 23, 2016

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Shanghai woos investment banks

SHANGHAI will open up its financial market further to foreign investment banks.

To leverage the financial liberalization policies of free trade zone, Shanghai will allow foreign financial institutions to establish joint-venture securities companies with domestic firms beyond brokerage firms, Shi Haining, director of Financial Services Bureau of the Pudong New Area said yesterday, without providing a timeframe.

Currently, foreign investment banks are allowed to partner with more than 100 local brokerage companies.

The business scope of newly established foreign-funded securities firms will also be expanded to brokerage, proprietary trading and wealth management. Previously, securities joint ventures in China were only allowed to engage in investment banking at the beginning of establishment. They had to apply for licenses for other businesses after certain years of operation.

“It will give foreign investors more options for local partners and improve the zone’s attractiveness to investment banks such as Goldman Sachs, JPMorgan and Credit Suisse,” Shi said.

China’s financial regulator is also considering easing restrictions on foreign ownership in joint-venture securities and futures firms, which now is capped at 49 percent, he said.

Shi said the FTZ is also considering opening up the wealth-management sector to foreign investors. Top fund management companies such as Blackstone Group, TPG Capital and Bridgewater Associates are already present in FTZ. Other fund managers like MFS Investment Management, State Street Corp and Fidelity Investments are expected to set up operations in the zone soon.


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