JPMorgan Chase & Co and Nomura Holdings Inc have won Chinese regulatory approval to set up majority-owned brokerage joint ventures in China’s latest move to open its financial sector up to foreign firms.
The China Securities Regulatory Commission on Friday said that it would continue to approve foreign brokerage joint ventures “efficiently” after announcing its decision for the two banks.
Allowing foreign banks a controlling stake in securities joint ventures is a key part of China’s pledge to ease ownership curbs, especially in the financial sector.
Western banks, including Goldman Sachs Group Inc, Morgan Stanley and Credit Suisse Group AG, run joint ventures, the offerings of which include debt and equity underwriting, and financial advisory services, with varying degrees of operational control.
Beijing in November last year gave UBS AG approval to hold a majority stake in its securities joint venture, making it the first foreign bank to do so under rules announced in 2017.
HSBC Holdings PLC also holds 51 percent of its securities business in China, which was launched in 2017, but the Asia-focused bank does so under rules allowing Hong Kong-based companies special access.
JPMorgan and Nomura applied to set up majority-controlled joint ventures in China last year. However, unlike UBS, neither has a joint venture in mainland China and would need to start from scratch.
The majority-owned securities venture would allow JPMorgan to further strengthen its China business and offer “a complete set of services and solutions” to its clients, the Wall Street bank said in a statement.
“It’s a critical component of our growth plans globally as well as in Asia Pacific,” JP Morgan Asia Pacific chairman and chief executive officer Nicolas Aguzin, said.
Nomura said its China joint venture would initially focus on the wealth management business and expand its offerings “with the ultimate goal of growing the business into a full-fledged brokerage.”
“With an increased presence in China, we aim to support economic growth in both China and Japan and firmly establish ourselves as a global financial services group with deep roots in Asia,” Nomura chief executive officer Koji Nagai said.
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