JPMorgan seeks full ownership of Chinese JV amid financial opening up: report

By Yang Kunyi Source:Global Times Published: 2020/1/16 22:58:40

A view of JPMorgan Chase office on in New York City. Photo: VCG

JPMorgan Chase is seeking to take full ownership of China International Fund Management Co (CIFM), a joint venture (JV) between its asset management division and a Chinese company, against the backdrop of China's efforts to open up its financial market, according to a report by Bloomberg on Wednesday, citing people familiar with the matter. 

If confirmed, CIFM might be the first fund management company to be fully owned by a foreign company. Last year, it became China's first fund company with a foreign majority holding, as JPMorgan Asset Management boosted its 49 percent stake to 51 percent, and the rest was held by Shanghai International Trust Co.

A request for confirmation was not answered as of press time, but the deal will be technically plausible as China further opens up its capital market, Wu Jinduo, head of fixed income at the research institute of Great Wall Securities, told the Global Times on Thursday. 

China has been ramping up efforts to open its capital market to foreign investors. Foreign investment in security, fund and futures companies in China is currently subject to a 51 percent cap. However, the cap for foreign ownership in fund management companies would be scrapped nationwide as of April 1, 2020, and the limit on foreign ownership in securities companies would be removed as of December 1, 2020, according to the China Securities Regulatory Commission (CSRC) in October 2019. 

The moves "mean that from then on, foreign capital will be able to fully own a securities, fund or futures company in China, as long as both companies have agreed and that the foreign company is registered with the CSRC," Wu said. 

JPMorgan is not alone in seeking more opportunities with Chinese institutions amid the opening-up of the nation's financial sector. US-based multinational investment bank Goldman Sachs is reported to be at a "very initial stage" of negotiations with Industrial and Commercial Bank of China to establish new financial business, according to

Global investment companies BlackRock and Temasek are also reportedly seeking cooperation with ICBC.

Posted in: MARKETS

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