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.