BlackRock, a US-based asset management firm, has received the nod of the China Securities Regulatory Commission (CSRC) to establish a mutual fund arm in China.
The approval enables the firm to set up a wholly-owned subsidiary in Shanghai.
The watchdog has given BlackRock six months to set up the new unit.
This April, BlackRock along with Neuberger Berman submitted applications to the CSRC to open mutual fund businesses in China.
At that time, BlackRock Asia Pacific chair Geraldine Buckingham said: “We firmly believe that China is one of the biggest opportunities for BlackRock over the long term.”
The development came after the CSRC eliminated foreign ownership restrictions in the fund management and securities businesses.
The aim is to increase competition in the market.
BlackRock’s China reach
The approval deepens BlackRock’s foothold in China.
The firm already has a mutual fund venture with Bank of China in the region.
BlackRock recently got the regulatory nod to set up its China wealth management JV with Temasek and China Construction Bank.
Other details on the JV were not revealed.
Besides, BlackRock has a private fund business in Shanghai.
China has opened up various parts of the financial sector, including its CNY17.7trn ($2.58trn) mutual fund industry.
Other firms’ China plans
This May, US asset manager Fidelity International applied to launch a mutual fund unit in China.
Meanwhile, Goldman Sachs is reportedly in talks with ICBC’s wealth management unit to launch a majority-owned China JV.
In June this year, JPMorgan received regulatory approval to assume full control of China futures business.
China recently also lifted quota limits for QFII and RQFII.