J.P. Morgan and Standard Chartered have received regulatory approval to expand their operations in China as the country emerges from three years of strict Covid restrictions.
China Securities Regulatory Commission (CSRC) approved J.P. Morgan Asset Management (JPMAM) to take 100% ownership of China International Fund Management (CIFM), its mutual fund joint venture with Shanghai International Trust in which the US firm had a 51% stake.
JPMAM’s asset management wholly foreign-owned enterprise (AM WFOE) will be integrated into JPMAM China, reflecting the US firm’s consolidated onshore operations in the country.
The CSRC has also approved Standard Chartered to set up a fully owned securities brokerage unit in China, with a registered capital of 1.05 billion yuan (US$154.7 million).
Similar approvals were granted recently by CSRC to Schroders, Manulife Financial, Fidelity International, and Neuberger Berman.
The green light came almost three years after China announced the scrapping of foreign ownership limits on the country’s securities and fund management sectors.
According to JPMAM, all CIFM employees will eventually relocate to join J.P. Morgan at Shanghai Tower in the Pudong District’s Lujiazui Financial Zone. CIFM chief executive officer Eddy Wong will become CEO of JPMAM China, reporting to Dan Watkins, JPAM CEO for Asia-Pacific.
“Receiving regulatory approval to acquire full ownership of a Chinese fund manager is an incredibly exciting milestone that reflects our long-term mindset and the breadth of our commitment to China,” says JPAM chief executive officer Mary Callahan Erdoes. “Our scale and global capabilities will enable us to help Chinese investors strengthen their investment solutions and diversify internationally, as well as to bring foreign investment and capital to China.”
Established 18 years ago, CIFM oversees about 170 billion yuan (US$23.9 billion) in client assets as of September 30 2022.
Watkins adds: “We believe integrating the strengths of CIFM’s local operating expertise with the resources and global scale of J.P. Morgan creates powerful momentum. Our strategic goal is to significantly grow JPMAM China to become the leading foreign asset manager in China and contribute to JPMAM becoming the leading manager of China assets to global investors.”