China lifted its ownership restriction in its mutual fund and securities sectors in April last year as part of a Sino-US trade deal. Credit: Christian Lue on Unsplash.

Fidelity International has reportedly secured a regulatory nod from the China Securities Regulatory Commission (CSRC) to set up a mutual fund unit in Shanghai.

The British investment manager, which is looking to tap China’s $3.5 trillion retail fund market, approached the Chinese financial authority to establish the business a year ago.

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Fidelity said that it will continue to make preparations and is looking forward to receiving CSRC’s approval for business operations, Reuters reported.

Fidelity said in an emailed statement to the news agency: “We hope to marshal our experience and knowledge accumulated all over the world to provide domestic investors with the best investment solutions to meet their needs.”

China lifted its ownership restriction in its mutual fund and securities sectors in April 2020 as part of a Sino-US trade deal.

The move has caught the interest of several global asset managers who see potential to capitalise on the country’s evolving financial market.

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Neuberger Berman, Schroders and VanEck are amongst the other companies who are seeking to set up wholly owned mutual fund businesses in China.

In June this year, BlackRock secured the regulatory nod to start operating a wholly-owned onshore mutual fund business in China, becoming the first foreign asset manager in the country approved to do so.

China moves by other firms

Earlier this month, Reuters reported that Citigroup has secured regulatory approval for fund custody business in China.

Last month, a Bloomberg report suggested that Canadian insurer Manulife Financial is in negotiations to acquire a 51% stake it does not already own in its mutual fund joint venture in China.

The same month, JP Morgan Chase & Co reportedly applied to take 100% ownership in its China securities venture as part of its expansion strategy in the country.