Morgan Stanley to take control of fund management branch in China

Morgan Stanley to take control of fund management branch in China


Morgan Stanley to take control of fund management branch in China

The office building of Morgan Stanley in Beijing

The China Securities Regulatory Commission (CSRC) has given approval for Morgan Stanley to take a controlling stake in its fund management firm Morgan Stanley Huaxin Fund Management Co, read an announcement on Friday.

The move represents the latest effort in advancing the opening-up of China’s capital market, which has been progressing smoothly over the past two years.

The CSRC said that Morgan Stanley International Holdings Inc can invest 127.5 million yuan ($18.92 million) in the fund management firm, giving it a 51 percent stake.

The Shenzhen-headquartered fund management company was jointly set up by Morgan Stanley and its partner Huaxin Securities in 2008, according to the company’s official site.

Also on Friday, Standard Chartered Bank (Hong Kong) stated that it had obtained approval from China’s securities regulator for the establishment of Standard Chartered Securities Co, its securities branch.

The move will make Standard Chartered Securities the first wholly foreign-owned securities company to be set up since the removal of restrictions on foreign shareholding in securities companies in 2020, the company said.

With an initial capital injection of 1.05 billion yuan, the new firm will cover underwriting, asset management – restricted to asset-backed securities only – own-account trading and brokerage activities.

China scrapped foreign ownership limits in almost all areas of its $45 trillion financial sector from April 1, 2020. Eligible foreign investors have since then filed applications for the establishment or change of the actual controller of securities firms in accordance with related laws and regulations.

China will unswervingly expand the opening-up of its financial industry and cultivate a high-class environment for market entities, a Chinese official said at the 2022 Financial Street Forum in Beijing in November last year.

China has introduced more than 50 financial reform and opening-up policies since 2018, and more than 120 foreign banking and insurance institutions have opened in China during the period, Zhou Liang, vice chairman of China Banking and Insurance Regulatory Commission (CBIRC), said in a parallel session at the forum.

The official vowed to further promote the opening-up of the financial industry with a more proactive attitude, more diversified open market landscape, higher quality environment, and a safer system.