JPMorgan Grabs Approval for China’s First Fully Foreign-owned Futures Firm

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Storied Wall Street bank JPMorgan is set to become the first foreign bank to fully own a futures business in China after securing approval from the China Securities Regulatory Commission (CSRC).

In an announcement posted its official website on 18 June CSRC said that the move would “further expand the external opening of the futures market,” with JPMorgan Futures (摩根大通期货) set to become China’s first fully foreign-owned futures business.

In January sources said to Shang­hai Se­cu­ri­ties News that JP­Mor­gan Chase had ap­plied with CSRC for a ma­jor­ity stake in Guang­dong-based fu­tures joint-ven­ture JP­Mor­gan Fu­tures.  

JP­Mor­gan cur­rently holds a 49% stake in JP­Mor­gan Fu­tures via J.P. Morgan Broking (Hong Kong) Limited, while Zhuhai Mai­lande Eq­uity In­vest­ment Man­age­ment Co., Ltd. (珠海市迈兰德基金管理有限公司) holds a 50% stake, and Jiangsu Van Ven­ture Cap­i­tal Co., Ltd. (江苏威望创业投资有限公司) a 1% stake. 

The latest approval from CSRC comes amidst broader efforts by JPMorgan and other international banks to expand their clout and footprint in China, following the touting of greater financial opening by Beijing.

In December 2019 JPMorgan obtained approval from the China Banking and Insurance Regulatory Commission (CBIRC) for the launch of a ma­jor­ity-owned joint-ven­ture (JV) to pro­vide se­cu­ri­ties bro­ker­age, in­vest­ment ad­vi­sory, un­der­writ­ing and spon­sor­ship ser­vices. 

Chinese regulators allowed HSBC to obtain a majority stake in a securities JV in 2017, while UBS increased its stake in its Chinese securities JV to 51% in 2018.

The as­set man­age­ment arm of JP­Mor­gan also an­nounced in April 2020 that it had en­tered an agree­ment to pur­chase the 49% stake in mutual fund manager China In­ter­na­tional Fund Man­age­ment (CIFM) held by Shang­hai In­ter­na­tional Trust. 

Ac­cord­ing to JP­Mor­gan the buy-out would make it the first for­eign fi­nan­cial in­sti­tu­tion to ac­quire full own­er­ship of a do­mes­tic Chi­nese fund man­ager should it se­cure ap­proval from CSRC.

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