The China Securities Regulatory Commission has approved a plan by Hang Seng Bank and a partner from the Chinese mainland to form the first fund management company that will be majority owned by an overseas entity in a special development zone in South China's Guangdong Province, according to a posting on the zone's website szqh.gov.cn.

The fund management company will be founded in Shenzhen's Qianhai special development zone, with Hang Seng Bank holding 70 percent ownership of the company and State-run Shenzhen Qianhai Financial Holdings Co owning the remaining stake, said the posting on Saturday.

The approval marks the latest step toward linking the financial hub of Hong Kong with rapid development in the mainland. China's central government approved the Qianhai zone in 2010 specifically to promote cross-border development of the service industry in partnership with Hong Kong.

The Qianhai zone offers companies more flexibility in cross-border lending than is normally allowed in the mainland, which tightly controls money flowing in and out of the country.

The joint firm will raise money, offer fund products and asset management services, the posting said.

Reuters - Global Times