Fund News, Policy, Venture Capital

JP Morgan To Take Majority Stake In Chinese Joint Venture

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JPMorgan Chase & Co. has announced that it will assume a majority stake of its Chinese mutual-fund management joint venture by raising its holding to 51% from 49% currently after Beijing recently relaxed its rules for foreign ownership of financial firms.

The U.S. bank appointed Mark Leung, a veteran who has worked with the firm for more than two decades, to be its new China chief executive who will manage onshore and offshore activities in the country.

The Corporate & Investment Bank (CIB), JPMorgan’s brokerage unit, submitted an application to Chinese regulators— China Securities Regulatory Commission (CSRC) to acquire a 51% stake in a new securities joint venture. Currently, JPMorgan has a 49% stake in its Chinese fund management venture and oversees about RMB190 billion in assets.

The bank’s Asset & Wealth Management business is also aiming to increase its current joint venture stake in China International Fund Management Co. Ltd to a majority interest, subject to agreement with its joint venture partner and the relevant authorities, the company said.

China’s securities regulator in April this year released guidelines permitting foreign companies to control 51% of local securities, asset-management and insurance joint ventures, part of its years long efforts to open up the country’s financial sector.

China’s 113 fund management firms, including 45 Sino-foreign JVs, oversaw a total of RMB11.6 trillion (US$1.8 trillion) by the end of December, according to the Asset Management Association of China.

“Our investment in China is a commitment to bring the full force of JPMorgan Chase and our resources to the country,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase.“These developments are important for China, the U.S. and global commerce, and an encouraging sign for the world’s two largest economies.”

JPMorgan was recently appointed by the People’s Bank of China as an RMB clearing house in the U.S., the first non-Chinese bank given the designation.

The firm also recently announced the signing of a memorandum of understanding with Industrial and Commercial Bank of China Limited, under which both banks aim to expand cooperation to better support Chinese companies going global and multinational companies coming into China, they said.


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