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The
China Securities Regulatory Commission said on Friday it will
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 trillion-dollar financial sector.
A lack of control and limited contribution to revenue have long
been a source of frustration for western investment banks, and a
reason behind JP Morgan's 2016 decision to sell its 33 percent
ownership in its then Chinese joint venture.
Western banks including Goldman Sachs, Morgan Stanley and Credit
Suisse run joint ventures, whose offerings include debt and
equity underwriting and financial advisory, with varying degrees
of operational control.
Beijing gave UBS approval in November to hold a majority stake
in its securities joint venture, making it the first foreign
bank to do so under new rules announced in 2017.
COMPLETE SERVICES
JP Morgan and Nomura applied to set up majority-controlled joint
ventures in China last year. But unlike UBS, neither has a
mainland joint venture and would need to start from scratch.
The majority-owned securities venture will allow JP Morgan 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 Nicolas Aguzin, said.
Nomura said it's 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 Koji Nagai said.
The recent approvals for greater access to foreigners, from
insurance to asset management, comes amid a festering trade war
with the United States, with increased access to the financial
sector among a host of demands from Washington.
Premier Li Keqiang said on Thursday that Beijing will expand
market access for foreign banks and securities and insurance
companies, especially in financial services.
China has in recent years allowed many foreign financial firms
to either set up new businesses onshore or expand their presence
through majority ownership in joint ventures.
Besides UBS, HSBC 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.
(Reporting by Sumeet Chatterjee, Zhang Xiaochong and John
Ruwitch; Writing by Samuel Shen; Editing by Clarence Fernandez)
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