China is opening up its financial services sector to more outside competition by scrapping restrictions on foreign ownership limits.

The foreign ownership caps would be removed by next year, a year before the scheduled date.

The rule would cover securities, fund management, and futures companies as well as life insurers.

Foreign investors will be encouraged to establish wealth management subsidiaries, currency brokerages, and pension fund managers in Mainland China.

The country will also eliminate the 25% limit on foreign ownership of Chinese insurance asset management firms.

China will also now allow foreign-owned credit rating agencies to rate all bonds traded on inter-bank and exchange market.

China has already loosened joint venture (JV) ownership caps for foreign entities, enabling them to take a 51% stake in Chinese JVs.

Last year, UBS became the first foreign bank to take a controlling stake in a China business.

Earlier this year, Credit Suisse too struck an agreement to take a majority stake in its China securities JV.

Morgan Stanley also said that it is eyeing a majority stake in its Chinese JV.

French insurer AXA announced plans to take full ownership of its China JV in November 2018.

The same month, German insurer Allianz secured regulatory approval to set up a fully foreign-owned insurance company in China.