China Securities Regulatory Commission or CSRC gives J.P. Morgan Securities Company Limited the green light to start business operations in the country.
With the approval, J.P. Morgan Securities (China) can participate in China's financial sector which is estimated to be worth $3 trillion at present.
The company will provide financial products and services in China both for residents and international clients. Other services include securities brokerage, securities investment advisory, and securities underwriting sponsorship, according to an official statement from J.P. Morgan.
J.P. Morgan has its eyes set on China with several business plans targeted to win the market. In August, the investment bank won an auction to buy shares in a yet-to-be-named Chinese management joint venture. Once approval is given as well, J.P. Morgan will have a majority equity stake for the said venture.
J.P. Morgan is the latest player to be allowed access to China's financial sector. The country, which has the second-largest economy in the world, has started to be more open for foreign investors in the last couple of years.
In 2018, Swiss multinational bank, UBS Group, became the first foreign bank to hold the majority stake in its securities joint venture inside the country. UBS Group applied in May that year to the CSRC to raise its ownership by 51%. At the time, the UBS group only owned 24.99% of the UBS Securities Co joint venture with China.
In March 2019, Japan's Nomura Holdings was allowed to set up the joint venture Nomura Orient International Securities and launch operations thereafter.
Most recently in July, China announced more relaxed monetary policies for foreign investment firms. Aside from banks, the Asian country will also remove limits on foreign ownership among securities companies, insurance, and fund management. More relaxed regulations will be implemented by 2020, China's Financial Stability and Development Committee said at the time. Officials originally planned for new monetary policies to take effect by 2022.
With its overhauled regulations, China will allow investors to have their wealth management firms in the country. They can also set up currency brokerages and pension management companies, which were all limited before.
Even foreign-owned credit rating agencies will be allowed to see through bonds and debt types accordingly. The Chinese government also scrapped the minimum 30-year business operations for foreign insurance companies.
Previously, insurance companies need to be present in China for three decades before they could be allowed local operations. The government also canceled the 25% equity cap of foreign ownership of insurance asset management firms among other things.
