JPMorgan, Standard Chartered win approval to expand in China
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[January 20, 2023] SHANGHAI
(Reuters) - JPMorgan and Standard Chartered won Chinese regulatory
approval on Thursday to expand operations in China as it encourages
expansion by foreign companies after lifting its restrictive COVID-19
policies.
China is speeding up the process of granting permission to foreign
institutions to boost the confidence of overseas investors as part of
efforts to revive its economy battered by the COVID measures, which were
scrapped last month.
JPMorgan's asset management arm will be allowed to take full ownership
of China International Fund Management Co. (CIFM), in which it holds a
49% stake, the China Securities Regulatory Commission (CSRC) said.
The approval came more than two years after the U.S. bank had applied to
buy out CIFM, in 2020.
JPMorgan Asset Management (JPMAM) said that CIFM, which overseas client
assets of roughly 170 billion yuan ($25.10 billion), would be integrated
into its global operating model.
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"Our strategic goal is to significantly grow JPMAM China to become the
leading foreign asset manager in China and contribute to JPMAM becoming
the leading manager of China assets to global investors," Dan Watkins,
its Asia Pacific chief executive officer, said in a statement.
"Symbolically it's very important, given both the size of the deal, and
also the fact that China is meant to be one of JPMorgan's primary growth
engines moving forward," said Peter Alexander, managing director of fund
consultancy Z-Ben Advisors, which estimates the deal to be worth about
$1 billion.
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The Standard Chartered bank logo is seen
at their headquarters in London, Britain, July 26, 2022.
REUTERS/Peter Nicholls
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STANDARD CHARTERED
Also on Thursday, British bank Standard Chartered won an approval to
set up a new securities brokerage unit in China, the CSRC said.
Chinese regulators and government officials were preoccupied with
the zero-COVID policy in 2022, and preparation for October's 20th
Communist Party Congress, but approvals granted to foreign
institutions have recently picked up pace, Z-Ben's Alexander said.
The CSRC gave a green light to Schroders on Jan. 13, allowing the
British asset manager to expand its footprint in China by setting up
a mutual fund unit.
Canada's Manulife Financial Corp in November received regulatory
approval to take full control of its Chinese mutual fund venture.
The same month, U.S. asset manager Neuberger Berman won approval to
set up a fund unit in China.
JPMorgan said that CIFM would be operating under the JPMAM brand and
its China private fund unit would also be integrated into JPMAM
China as it consolidates onshore operations.
Watkins said that integrating CIFM's domestic expertise with
JPMorgan's resources and global scale "creates powerful momentum".
($1 = 6.7738 Chinese yuan renminbi)
(Reporting by Shanghai and Beijing newsroom; editing by Jan Harvey,
Jason Neely and Jane Merriman)
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