China allows UBS to control local business
BEIJING: UBS has been authorised by China’s securities regulator to take a controlling stake in a local business, making the Swiss giant the first foreign bank allowed to do so under new rules.
Beijing in April relaxed the rules in the financial industry in a move to open up the economy.
“The China Securities Regulatory Commission (CSRC) recently approved UBS AG to increase the shareholding ratio of UBS Securities Co Ltd to 51 per cent,” the regulator said in a statement late on Friday.
“This is the first foreign-controlled securities company approved by the China Securities Regulatory Commission after the implementation of the Measures for the Administration of Foreigninvested Securities Companies.” USB AG, which currently owns about 25 per cent of shares in the USB Securities Co Ltd joint venture, said in a statement that it would acquire stakes from China Guodian Capital Holdings and COFCO.
Other financial firms like Wall Street titan JP Morgan Chase and Japan’s Nomura Holdings are still awaiting approval. Laws limiting foreign ownership of local financial firms have long stopped global banks from independently operating in China and limited their growth.
But Beijing said it would liberalise shareholding limits in the financial services industry last year, soon after US President Donald Trump visited.
Officials moved to make good on the pledge in April, immediately allowing foreign investors to take 51 per cent stakes in securities firms and fund managers, with pledges set out to eventually allow full control.
Earlier this week, two European insurance giants Allianz and Axa received approval to expand their footprint in China — Allianz has been allowed to start a company fully funded by foreign capital while Axa would take full control of a joint venture.
Beijing has pledged to open up its economy as it looks to head off a possible trade tensions have increased with the United States, which accuses it of using unfair practices to get an advantage for its own firms and destroying American jobs.