China allows UBS to control local securities

UBS has been authorized 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 relaxed the rules in the financial industry in April 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 percent,” the regulator said in a statement.

“This is the first foreigncontrolled 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 owns about 25 percent 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 such as 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 independently operating in China and limited their growth.

But Beijing said it would liberalize 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 percent 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.

Trump has slapped punishing tariffs on more than $250 billion in Chinese imports so far this year and China responded with its own tariffs on $110 billion in US goods.

The US president has threatened to target the remaining $267 billion worth of Chinese imports as well, hitting Apple iPhones and laptops produced in China.

Trump is set to meet Chinese leader Xi Jinping during the G20 summit in Argentina.